Telstra 2009 Annual Report Download - page 85

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Telstra Corporation Limited and controlled entities
Remuneration Report
percent requirement voluntary from 1 July 2009. The Board has
however decided to establish guidelines to encourage non-
executive Directors to hold Telstra shares equivalent to at least
50 per cent of their annual fees. Such shares are to be acquired
over a five year period from 1 July 2009 to align the
remuneration structure with the interests of our shareholders.
All Board and Committee fees, including superannuation, paid
to Directors in fiscal 2009 remain within the approved fee pool.
Section 3.8 of this Report provides details on Restrictions and
Governance as they apply to non-executive Directors.
Board and Committee fees are set out in the table below.
Additional Committee fees do not apply to the position of
Chairman.
In fiscal 2009, selected non-executive Directors provided
services to the Telstra NBN (National Broadband Network)
Committee that were over and above their regular committee
obligations. Fees for services rendered in relation to the NBN
Committee are paid for out of the funds of the company and
not the Directors Fee Pool as detailed in the table below. Table
9.2 provides full details of non-executive Director
remuneration for fiscal 2009.
7.3 Components of the Total Remuneration Package (TRP)
Each year non-executive Directors allocate their total
remuneration between the three components below.
The Trustee retains a discretion to determine whether to
accept the Director's offer for the relevant percentage to be
received as Directshares.
7.4 Equity Compensation - Directshare
The Directshare Plan (voluntary from 1 July 2009) aims to
encourage a longer-term perspective and to align the Directors
interests with those of Telstra's shareholders. The shares are
purchased on-market and allocated to the participating non-
executive Director at market price. There are no performance
hurdles in respect of this Plan to preserve non-executive
Director independence and impartiality.
7.5 Retirement Benefits
Superannuation contributions, in accordance with legislation
and Telstra policy, are included as part of each Director's total
remuneration. Directors may choose to increase the
proportion of their remuneration taken as superannuation,
subject to legislative requirements.
Telstra does not provide retirement benefits for Directors, other
than superannuation contributions.
Table 9.2 provides full details of Director remuneration for
fiscal 2009 and 2008.
8. Linking Remuneration and Company
Performance
The table below in section 8.1 provides a summary of the key
financial achievements for Telstra over the previous five
financial years. The below tables in sections 8.2 to 8.4 provide
a summary of how those results have impacted the
remuneration outcomes for Senior Executives.
8.1 Financial Performance
Details of the Group's performance, share price, dividends and
other Group highlights over the past five years are summarised
in the table below:
(1) Comparatives for fiscal 2006 have been adjusted to reflect the impact of the transition to
AASB Interpretation 4 "Determining Whether an Arrangement Contains a Lease".
(2) This includes special dividends of six cents per share in fiscal 2006 paid to shareholders as
part of Telstra's Capital Management Plan.
(3) This includes special dividends of 12 cents per share in fiscal 2005 paid to shareholders as
part of Telstra's Capital Management Plan.
(4) The share price displayed is as at 30 June for the respective fiscal year. The closing share
price as at 30 June 2004 (fiscal 2004) was $5.03.
Board Fees Chairman Director
Board (fiscal 2009) $660,000 $220,000
Committee Fees
Committee
Chair
Audit Committee $70,000 $35,000
Remuneration Committee $40,000 $20,000
Nomination Committee - $7,000
Technology Committee $7,000 $7,000
Cash Directshare Superannuation
Minimum 30 per cent of
TRP as cash.
From 1 July 2009
nominating a per
cent of TRP as
Telstra shares
through the
Directshare plan is
optional.
Minimum
superannuation
guarantee applies.
Performance
Measure
Fiscal
2009
$m
Fiscal
2008
$m
Fiscal
2007
$m
Fiscal
2006 (1)
$m
Fiscal
2005
$m
Earnings
Sales revenue 25,371 24,657 23,673 22,712 22,161
EBITDA 10,948 10,416 9,861 9,575 10,464
Net profit available
to Telstra
4,073 3,692 3,253 3,183 4,309
Shareholder value
Share price ($) (4) 3.39 4.24 4.59 3.68 5.06
Total dividends
paid/declared per
share (c )
28.0 28.0 28.0 34.0(2) 40.0 (3)