Telstra 2015 Annual Report Download - page 58

Remuneration Report
56 Telstra Corporation Limited and controlled entities
a) FY13 LTI Plan testing as at 30 June 2015
The vesting table for the FY13 LTI plan is detailed below, reflecting
performance up to 30 June 2015 against the two performance
measures of RTSR and FCF ROI.
Upon vesting, each participant was allocated Restricted Shares
which are subject to a Restriction Period that ends on 17 August
2016.
b) Historical LTI plan performance relative to Telstra share price
The following chart compares Telstra's LTI plan vesting results for
the past five LTI plans, (as a percentage of plan maximum
opportunity), to the share price history during the same
performance period:
In FY12 Telstra had two LTI plans with a final performance test as
the FY09 LTI was the last LTI plan where performance testing was
done in years 2, 3 and 4. This was different from the current
structure where there is a 3 year performance period plus 1 year
Restriction Period.
3.4 Senior Executive contract details
The key terms and conditions of the ongoing service contracts for
current Senior Executives are summarised in the table below.
Upon notice being given, Telstra can require a Senior Executive to
work through the notice period, or may terminate employment
immediately by providing payment in lieu of notice, or a
combination of both. Any payment in lieu of notice is calculated
based on the Senior Executive's Fixed Remuneration as at the
date of termination.
There is no payment if termination is a result of serious
misconduct or redundancy (in which case Telstra's redundancy
policy overrides the termination provisions of a Senior Executive's
service contract).
As detailed in Table 1.1, Mr Thodey ceased to be a Senior Executive
after 30 April 2015, therefore, he is not included in the table above.
The termination payment provisions in each executive contract
reflect the company’s policy at the time the contract was entered
into. Telstra’s current policy is to provide for a 6 month termination
payment in executive contracts.
4. NON-EXECUTIVE DIRECTOR REMUNERATION
4.1 Remuneration structure
The Telstra Board and Committee fee structure (inclusive of
superannuation) during FY15 was:
The Chairman of the Board does not receive Committee fees in
respect of her role as a Chair or a member of any Board Committee.
In FY15, Telstra reviewed its non-executive Director fees relative
to other major companies in the ASX20. Following the review, the
Board, (other than the Chairman), decided to increase the
Chairman's fee by 9.9 per cent to $775,000, effective 1 October
2014, to position it more appropriately against other companies in
the ASX20. No other changes were made to any of the Committee
or non-executive Director fees.
Telstra's non-executive Directors are remunerated in accordance
with Telstra's Constitution, which provides for an aggregate fee
pool that is set, and varied, only by approval of a resolution of
shareholders at the Annual General Meeting (AGM). The current
annual fee pool of $3.5 million was approved by shareholders at
Telstra's 2012 AGM.
The total of Board and Committee fees, including superannuation,
paid to non-executive Directors in FY15 remained within the
approved fee pool.
Test date Performance measure % of total plan
vested
30 June 2015 RTSR (91% vesting) 45.5
FCF ROI (80% vesting) 40.0
Total: 85.5
100.0%
78.15%
85.50%
$7.0
$6.5
Telstra Share Price
$6.0
$5.5
$5.0
$4.5
$4.0
$3.5
$3.0
$2.5
30/06/2012
LTI plan: FY09
30/06/2013
LTI plan: FY11
30/06/2014
LTI plan: FY12
30/06/2015
LTI plan: FY13
LTI plan: FY10
66.0%
22.10%
Name
Fixed
Remuneration
at the end of
FY15
Notice
period
Termination
payment
Andrew Penn 2,325,000 6 months 6 months
Gordon Ballantyne 1,350,000 6 months 6 months
Warwick Bray 1,100,000 6 months 6 months
Stuart Lee 1,040,000 6 months 12 months
Kate McKenzie 1,200,000 6 months 6 months
Robert Nason 1,080,000 6 months 6 months
Brendon Riley 1,350,000 6 months 12 months
Board fees Chairman Non-executive
Director
Board 775,000 235,000
Committee fees Committee
Chair
Committee
member
Audit & Risk Committee 70,000 35,000
Remuneration Committee 50,000 25,000
Nomination Committee - 7,000