Telstra 2010 Annual Report Download - page 77

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Telstra Corporation Limited and controlled entities
Remuneration Report
1. Introduction
The Directors of Telstra Corporation Limited (the
Company) present the Remuneration Report (the
Report) prepared in accordance with section 300A of the
Corporations Act 2001 for the Telstra Group for the year
ended 30 June 2010 (fiscal 2010).
The information provided in this Report has been
audited as required by section 308(3C) of the
Corporations Act 2001. This Report forms part of the
Directors’ Report.
2. Key Management Personnel (KMP)
KMP comprise the Directors of the Company and Senior
Executives. The term "Senior Executives" refers to:
• The Chief Executive Officer; and
• All other executives who fall within the definition
of Key Management Personnel of the Group
(being those persons with authority and
responsibility for planning, directing and
controlling the activities of the Company and the
Group, directly or indirectly).
The Senior Executives disclosed in this Report are as
follows:
The Senior Executives in the above table include the five
highest paid Company and Group executives. Even
though he does not meet the definition of a KMP, Geoff
Booth, Group Managing Director NBN, is included in the
remuneration tables as he is one of the five highest paid
Company and Group executives for the 2010 fiscal year.
Tables 7.1 (Senior Executives) and 7.2 (Non-executive
Directors) provide details of the period during which an
individual has held a particular KMP position (or more
than one position) during fiscal 2010.
3. Principles and Structure of Senior Executive
Remuneration
3.1 Key Principles
The key principles of our remuneration philosophy are
to:
• Provide market competitive remuneration to
attract, motivate, and retain highly skilled
Senior Executives;
• Implement best practice programs to help drive
the achievement of our business and financial
objectives and reinforce our values and culture;
and
• Link a significant component of remuneration
that is at-risk to annual performance results and
the creation of long term shareholder value.
Total Remuneration comprises fixed remuneration,
short term incentives and long term incentives. The
aggregate value of these components creates the
overall structure by which Telstra measures the
competitiveness of our executive remuneration position
versus the market.
3.2 Fixed Remuneration
Fixed remuneration is made up of base salary (including
salary sacrifice benefits and applicable fringe benefits
tax) and superannuation.
The level of fixed remuneration is set based on the
Senior Executive’s responsibilities, performance,
qualifications and experience. Telstra benchmarks its
Senior Executives’ fixed remuneration against
organisations within the ASX 20 and also international
telecommunications firms. Market data is provided by
Ernst and Young, an independent external remuneration
consultant, and obtained through publicly disclosed
remuneration information.
3.3 Short Term Incentive Plan (STI)
The STI is an annual “at-risk” component of
remuneration for the Senior Executives and is delivered
in cash. Senior Executives are paid an annual STI only
when they have met threshold targets linked to Telstra’s
financial performance and individual key performance
indicators. For fiscal 2010, the financial performance
measures were set in accordance with Telstra’s financial
plan and strategy.
For all Senior Executives (other than for Sensis and
Telstra Wholesale) the fiscal 2010 performance
measures of the STI Plan were Free Cashflow, EBITDA,
Total Income, Broadband Retail Revenue, PSTN (Public
Switched Telephone Network) Revenue and Individual
Accountabilities.
For the GMD - Sensis, the above Company measures
comprise 20 per cent of the STI Plan with the remainder
covering Sensis Revenue, Sensis EBITDA, and
Individual Accountabilities. For the GMD - Telstra
Wholesale, the PSTN and Broadband Retail Revenue
measures are substituted by Telstra Wholesale EBIT
Contribution and Contestable Revenue.
These performance measures were selected for the STI
Plan as they are seen as a critical link between achieving
outcomes of the business strategy and increasing
shareholder value. The graph below demonstrates the
Name Most Recent KMP Position Title
David Thodey Chief Executive Officer
Bruce Akhurst Group Managing Director (GMD) - Sensis
Nerida Caesar GMD - Telstra Enterprise and Government
Paul Geason GMD - Telstra Wholesale
Glenice Maclellan GMD - Telstra Consumer (Acting)
Kate McKenzie Chief Marketing Officer
Justin Milne GMD - Telstra Media
David Moffatt GMD - Telstra Consumer
Michael Rocca Chief Operations Officer – Telstra
Operations
Deena Shiff GMD - Telstra Business
John Stanhope CFO and GMD - Finance and
Administration
Geoff Booth GMD - National Broadband Network