Telstra 2005 Annual Report Download - page 42

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remuneration report continued
40
Year ending Year ending Year ending Year ending Year ending
30 June 2005 30 June 2004 30 June 2003 30 June 2002 30 June 2001
$m $m $m $m $m
Sales revenue 22,161 20,737 20,495 20,196 18,679
Net profit available to Telstra Corporation Limited
shareholders 4,447 4,118 3,429 3,661 4,058
EBITDA 10,771 10,175 9,170 9,483 9,834
Earnings
Our company’s earnings over the five years to 30 June 2005 are summarised below.
Figure 9: Our 5-year earnings
Relationship to executive remuneration
As specified in our remuneration policy, a significant proportion of the
CEO and senior executives’total remuneration is dependent on the
achievement of specific short and long-term measures.
Short term incentive
Financial measures represent 80% of the CEO and 41.7% of the senior
executive short-term incentive plan for fiscal 2005 and therefore our
financial performance directly impacts on the rewards received through
the plan. The financial measures:
• provide a strong correlation with our ability to increase shareholder’s
returns;
• have a direct impact on our bottom line; and
• are measures over which the executives can exercise control.
The average STI received as a percentage of the maximum achievable
payment for the CEO and senior executives for achievement of those short
term measures is reflected in the table below.
Year ended Year ended Year ended Year ended Year ended
30 June 2005 30 June 2004 30 June 2003 30 June 2002 30 June 2001
Share Price ($) 5.06 5.03 4.40 4.66 5.38
Total dividends paid per share (¢) 33.0 25.0 26.0 22.0 18.0
Earnings Per Share (¢) 35.5 32.4 26.6 28.5 31.5
Date Number of ordinary Cost Buy-back Franked dividend Capital
shares bought back Purchase Transaction price per share component component
consideration costs per share per share
$m $m $ $ $
24 Nov 2003 238,241,174 1,001 8 4.20 2.70 1.50
15 Nov 2004 185,284,669 750 6 4.05 2.55 1.50
Figure 7: Share price at year end and dividends paid per share for the last 5 years
As part of our commitment to improve returns for shareholders, in fiscal
2004 we announced a capital management strategy whereby we will
declare ordinary dividends of around 80% of normal profits after tax and
return $1.5 billion per annum to shareholders through special dividends
and/or share buy-backs each year through to fiscal 2007.
During the five years to 30 June 2005 we undertook two off-market share
buy-backs as part of our capital management strategy, and all ordinary
shares bought back were subsequently cancelled.
Figure 8: Share buy-backs
Figure 10: Average STI payment as a % of maximum payment
Year ending Year ending Year ending Year ending Year ending
30 June 2005 30 June 2004 30 June 2003 30 June 2002 30 June 2001
STI received 54.6%(1) 31.4% 41.1% 57.6% 31.7%
(1) This includes both the cash and equity components. While the total equity component is included in determining the above percentage, the value of the rights to Telstra shares granted
for the year ended 30 June 2005 will be reflected in remuneration over the next three years as the shares vest over their performance period.