Telstra 2016 Annual Report Download - page 65

Telstra Corporation Limited and controlled entities | 63
Remuneration Report | Telstra Annual Report 2016
4.0 Non-executive Director remuneration
4.1 Remuneration structure
The Telstra Board and Committee fee structure (inclusive of
superannuation) during FY16 was:
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
The Chairman of the Board does not receive Committee fees
if he is a member of a Board Committee.
There has been no change to non-executive Director or
Committee fees during FY16.
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 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 FY16
remained within the approved fee pool.
(a) Changes to the Board and Committee composition
Catherine Livingstone AO retired from the Telstra Board and
as Chairman of Directors on 27 April 2016. She was succeeded
by John Mullen as Chairman of Directors, and as Chairman
of the Nomination Committee with effect from 27 April 2016.
During the year, Geoffrey Cousins and John Zeglis both
retired from the Board on 13 October 2015 and Trae Vassallo
and Craig Dunn were appointed to the Board effective
13 October 2015 and 12 April 2016, respectively.
In addition, with effect from 11 April 2016, Peter Hearl was
appointed as Chairman of the Remuneration Committee
succeeding John Mullen (who ceased as a member at that
time), Russell Higgins AO was appointed as a member of the
Remuneration Committee and Chin Hu Lim was appointed as
a member of the Nomination Committee. Also, with effect from
12 April 2016, Craig Dunn was appointed as a member of the
Audit & Risk Committee.
4.2 Remuneration policy and strategy
Telstra’s non-executive Directors are remunerated with
set fees and do not receive any performance based pay.
This enables non-executive Directors to maintain independence
and impartiality when making decisions affecting the future
direction of the company.
To align the non-executive Directors’ interests with the
interests of our shareholders, the Board has established a
policy which encourages non-executive Directors to hold Telstra
shares equivalent to at least 50 per cent of the annual non-
executive Director base fee. Such shares should be acquired
by a non-executive Director by the end of the  ve year period
from his or her date of appointment.
Progress is monitored on an ongoing basis. Directors’
shareholdings as at 11 August 2016 are set out in the Directors’
Report on page 49 of this Annual Report.
4.3 Remuneration components
Superannuation contributions are included within each non-
executive Director’s Total Remuneration, in accordance with the
ASX Listing Rules and Telstra policy. Non-executive Directors
may choose to increase the proportion of their remuneration
taken as superannuation, subject to legislative requirements.
Telstra does not provide retirement bene ts for non-executive
Directors other than the superannuation contributions noted above.
Table 5.5 provides full details of non-executive Director
remuneration for FY16.
Section 2.2(d) of this report provides details of the Telstra
securities trading restrictions that apply to all KMP, including
non-executive Directors.