Telstra 2012 Annual Report Download - page 83

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Telstra Corporation Limited and controlled entities
Remuneration Report
1. Remuneration Snapshot
1.1 Key Points
1.2 Changes during FY 2012
The overall structure and philosophy of Telstra’s approach to
remuneration has remained consistent through FY 2012.
Some minor changes have however been made to improve the
operation of Telstra’s remuneration policies:
• The Executive Share Ownership Policy requiring
Senior Executives to hold Telstra shares to the value of
100 per cent of their fixed remuneration has been
amended. Section 2.3.4 explains the Policy in further
detail.
• Under the STI Deferral Plan, retirement no longer
results in the forfeiture of deferred shares but the
shares remain subject to the original deferral period.
This change takes effect for the portion of the FY 2012
STI payment to be deferred as shares in September
2012. Section 2.2.2 provides further information on the
STI deferral plan.
Proposed changes to Telstra’s remuneration policy for FY 2013
are set out in section 1.5.
1.3 Key Management Personnel (KMP)
KMP comprise the Directors of the Company and Senior
Executives. The term “Senior Executives” refers to the CEO and
those executives with authority and responsibility for planning,
directing and controlling the activities of the Company and the
Group, directly or indirectly.
Key changes to the Senior Executive structure this year
included the introduction of the Chief Customer Officer role
(Gordon Ballantyne) and a new position of GMD Telstra Media
(Rick Ellis).
The Senior Executives disclosed in this Report are:
Total Shareholder Return of
37.4%
Over FY 2012, Telstra’s share price increased and the company paid a 28c dividend for a total shareholder
return of 37.4%
Chief Executive Officer (CEO)
Remuneration
The Total Fixed Remuneration (TFR) increase of 6% was effective 1 October 2011 bringing the TFR to
$2,438,000. The increase brought the TFR closer to the median for ASX 20 CEO positions and reflected the
performance of Mr Thodey.
Total Remuneration increased from $5.1m to $7.6m primarily due to higher STI and LTI results based on
stronger performance on the plan measures.
Short Term Incentive
Outcomes
STI payout for Senior Executives was an average of 65.6% of the maximum opportunity due to the
achievement of financial, customer and individual performance measures, which reflects Telstra’s strong
results in line with market guidance and increased customer satisfaction.
Long Term Incentive
Outcomes
22.1% of the FY 2009 LTI plan vested in the form of options with a $4.36 exercise price. 66% of the FY
2010 LTI Plan vested in the form of Restricted Shares subject to a further one year restriction period. This
reflects the total shareholder return increase during the year and the achievement of the 17.1% Free
Cashflow Return On Investment target over the three year plan period.
Non-Executive Director
Remuneration
Board and Committee fees did not change during FY 2012.
Name Most Recent KMP Position Title
David Thodey Chief Executive Officer
Gordon Ballantyne Chief Customer Officer
Rick Ellis GMD Telstra Media
Stuart Lee GMD Telstra Wholesale
Kate McKenzie GMD Telstra Innovation, Products and
Marketing
Andrew Penn Chief Financial Officer and GMD Finance and
Strategy
Brendon Riley Chief Operations Officer
Former Senior Executives:
Bruce Akhurst Former GMD Sensis
John Stanhope Former Chief Financial Officer and GMD
Finance