Telstra 2015 Annual Report Download - page 54

Remuneration Report
52 Telstra Corporation Limited and controlled entities
c) Executive Share Ownership Policy
The intent of Telstra's Executive Share Ownership Policy is to align
a significant portion of executive remuneration to the creation of
longer term shareholder value. Under the policy, Senior Executives
are required to hold Telstra shares to the value of 100 per cent of
their Fixed Remuneration by the later of 30 June 2015, or within
five years of first appointment to Senior Executive level.
Any Restricted Shares held by Senior Executives are included in
calculating their shareholding for the purposes of this policy.
Senior Executives must obtain Board or, in certain circumstances,
CEO or Chairman approval before they sell shares if they have not
yet met their share ownership requirements under the policy.
Progress is monitored by the Board on an ongoing basis. All Senior
Executives met the policy's shareholding requirement as at 30
June 2015.
d) Restrictions and governance
All KMP must comply with Telstra's Securities Trading Policy,
which includes a requirement that Telstra securities can only be
traded during specified trading windows and with prior written
approval. KMP must also consider how any proposed dealing in
Telstra securities could be perceived by the market and must not
deal if the proposed dealing could be perceived as taking
advantage of their position in an inappropriate way.
They are also prohibited from speculative dealing in Telstra
securities for short term gain, using Telstra securities as collateral
in any financial transactions, (including margin loan
arrangements), or engaging in stock lending arrangements.
KMP are prohibited from entering into any hedging arrangement
that limits the economic risk of holding Telstra securities under
Telstra equity plans. This helps align executives' and
shareholders' interests.
KMP are required to confirm on an annual basis that they comply
with our Securities Trading Policy, which thereby enables Telstra
to monitor and enforce our policy.
2.3 Remuneration components
a) Remuneration mix of senior executives
The graph below shows the FY15 remuneration mix for Senior
Executives. The variable components of STI (including any
potential Restricted Shares) and LTI are expressed at target
(which is 50 per cent of the maximum opportunity as explained in
2.1).
Our remuneration structure is designed to support our
remuneration strategy and is consistent for our Senior Executives.
The remuneration mix for the Senior Executives reflects the nature
of, and the appropriate market benchmark for, their roles. The GE
Telstra Wholesale has different STI and LTI plans to comply with
Telstra’s Structural Separation Undertaking (SSU).
33.3%25.0%33.3% 8.4%
35.7% 26.8% 8.9% 28.6%
46.5% 26.2% 8.7% 18.6%
27.3% EQUITY
37.5% EQUITY
41.7% EQUITY
CEO
Other
Senior
Executives
GE Telstra
Wholesale
FR STI Deferred STI LTI
ATTRACT, MOTIVATE
AND RETAIN
HIGHLY SKILLED PEOPLE
REINFORCE VALUES AND
CULTURAL PRIORITIES
REWARD ACHIEVEMENT
OF FINANCIAL AND
STRATEGIC OBJECTIVES
ALIGN TO LONG TERM
SHAREHOLDER
VALUE CREATION
Base reward
market competitive
Encourages sustainable performance in the medium
to longer term and provides a retention element
• Base salary plus
superannuation
Set based on market
and internal relativities,
performance, qualications
and experience
•
• 75% of STI outcome paid
in September after the
nancial year end
STI outcome based
on Telstra’s nancial,
customer and individual
performance

•
• 25% of the STI outcome is
deferred as Restricted Shares
Half of the shares are
restricted for 1 year and
the other half for 2 years
Subject to clawback and
forfeiture in circumstances
outlined below
•
•
• Performance Rights subject
to performance conditions
50% subject to RTSR and
50% subject to FCF ROI
Performance is measured
over 3 years with an additional
1 year Restriction Period
Subject to clawback and
forfeiture in circumstances
outlined below
•
•
•
Short Term Incentive
(at risk)
Long Term Incentive
(at risk)
Fixed
Remuneration
CASH EQUITY
Remuneration structure