Qantas 2016 Annual Report Download - page 45

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Directors’ Report continued
For the year ended 30 June 2016
Additional Descriptions of STIP Scorecard Measures
Growth and Strategic
Initiatives
To support the strategic initiatives of growing diversified earnings, STIP targets were set to grow Qantas
Loyalty EBIT. Earnings targets were also set for each of Jetstar Asia and Jetstar Japan to support delivering
on Jetstar investments in Asia.
To support the successful delivery of the Qantas Revenue Management System project, targets were set
around project milestones and realising project benefits.
Summary of Key Contract Terms as at 30 June 2016
Contract Details Alan Joyce Tino La Spina Andrew David Gareth Evans Lesley Grant Jayne Hrdlicka
Base Pay $2,125,000 $850,000 $850,000 $1,000,000 $850,000 $1,000,000
STIP ‘At Target’
opportunity expressed
as a % of Base Pay 120% 80% 80% 80% 80% 80%
LTIP ‘At Target’
opportunity
expressed
as a
%ofBase Pay
Fair Value 80% 50% 50% 50% 50% 50%
Face Value1141% 88% 88% 88% 88% 88%
Travel Entitlements An annual benefit of trips for these Executives and eligible beneficiaries during employment2, at no cost to the
individual, as follows:
4 Long Haul 2 Long Haul 2 Long Haul 2 Long Haul 2 Long Haul 2 Long Haul
12 Short Haul 6 Short Haul 6 Short Haul 6 Short Haul 6 Short Haul 6 Short Haul
The same benefit is provided for use post-employment, based on the period of service in a senior Executive
role within the Qantas Group.
Notice Employment may be terminated by either the Executive or Qantas by providing six months’ written notice3.
Each Executive’s contract includes a provision that limits any termination payment to the statutory limit
prescribed under the Corporations Act 2001.
Severance A severance payment of six months’ Base Pay applies where termination is initiated by Qantas3.
1 Executives are awarded Rights on a fair value basis. The face value equivalent for the 2015 grant is also provided.
2 These flights are not cumulative and will lapse if they are not used during the calendar year in which the entitlement arises.
3 Other than for misconduct or unsatisfactory performance.
Risk Management and Clawback Policy
The STIP and the LTIP have design elements that protect against the risk of unintended and unjustified pay outcomes, that is:
–Diversity in their performance measures, which as a suite of measures cannot be directly and imprudently influenced by one
individual employee
–Clear maximum values specified for scorecard outcomes under the STIP and a challenging vesting scale under the LTIP
–Diversity of the timeframes within which performance is measured, with performance under the STIP being measured over one
year and performance under the LTIP being measured over three years
–Deferral of a portion of awards under the STIP with a restriction period of two years providing an alignment with shareholder
interests
–While formal Management shareholding requirements are not imposed, the CEO has a material holding in Qantas shares which at
30 June 2016 was valued at four times Base Pay. The potential equity awards under the STIP and the LTIP will assist Executives in
maintaining shareholdings in Qantas
The following Clawback Policy applies in the event of serious misconduct or a material misstatement in Qantas’ Financial
Statements. The Board may:
–Determine that an Executive forgo some or all awards otherwise due under the STIP
–Deem some or all STIP shares which are subject to the restriction period to be forfeited
–Cause some or all LTIP Rights which have not yet vested to lapse, and/or
–In the case of serious misconduct, cancel any post-employment benefits for the relevant employee(s) where possible
Employee Share Trading Policy
The Qantas Code of Conduct and Ethics contains Qantas’ Employee Share Trading Policy (Policy).
The Policy prohibits employees from dealing in Qantas securities (or securities of other listed entities) while in possession of material
non-public information relevant to the entity.
In addition, nominated employees (including KMP) are:
–Prohibited from dealing in Qantas securities (or the securities of any Qantas Group listed entity) during defined closed periods
REMUNERATION REPORT (AUDITED) CONTINUED
43
QANTAS ANNUAL REPORT 2016