Qantas 2007 Annual Report Download - page 71

69Qantas |Annual Report 2007
Directors’ Report
for the year ended 30 June 2007
Summary of Key Contract Terms
Non-Executive Directors
In addition to FAR and the associated superannuation contributions, all Non-Executive Directors and eligible beneficiaries receive travel entitlements.
The Chairman is entitled to four international trips and 12 domestic trips per calendar year and all other Non-Executive Directors are entitled to two
international trips and six domestic trips each calendar year. These flights are not cumulative and will lapse if they are not used during the calendar year in
which the entitlement relates. Post employment, the Chairman is entitled to two international trips and six domestic trips per year of service and all other
Non-Executive Directors are entitled to one international trip and three domestic trips per year of service.
Executive Directors
The key contract and other terms of the Executive Directors are set out below:
Contract details Geoff Dixon Peter Gregg
Length of existing contract Ongoing Ongoing
Fixed Annual Remuneration $2,310,000 (1 Jul 2006 – 31 Dec 2006)
$2,430,000 (from 1 Jan 2007)
$1,375,000 (1 Jul 2006 – 31 Dec 2006)
$1,450,000 (from 1 Jan 2007)
FAR can be taken as cash or non-cash components such as motor vehicles and superannuation contributions.
End of service payments As disclosed in the 2006 Remuneration Report, end
of service payments under Mr Dixon’s previous
employment contract were cancelled and the
preserved entitlements of 37.2 months FAR plus
$500,000 under that contract were not paid.
As disclosed in the 2006 Remuneration Report, end of
service payments under Mr Gregg’s previous employment
contract were cancelled and the entitlements of 36
months FAR plus $395,000 under that contract were
not paid.
Payment on signing new contract As announced at the time, on signing his current
contract of employment on 8 August 2006, Mr Dixon
received a benefit totalling $7,660,000 paid as a
superannuation contribution. Mr Dixon’s new
employment contract does not contain any retirement
entitlements other than the notice provisions of six
months by Mr Dixon and 12 months by Qantas.
As announced at the time, on signing his current contract
of employment on 8 August 2006, Mr Gregg received
a cash payment of $4,520,000. Mr Gregg’s new
employment contract does not contain any retirement
entitlements other than the notice provisions of six
months by Mr Gregg and 12 months by Qantas.
Termination of employment Termination without notice: employment can be terminated immediately without notice (or payment in lieu of
notice) if, in the opinion of the CEO (or the Board in the case of the CEO), the Executive is or has been engaged in
serious misconduct, becomes bankrupt or makes an arrangement or composition with creditors or wilfully and
persistently breaches their employment contract.
Termination with notice: employment can be terminated during the contract period with 12 months written notice.
Voluntary termination: voluntary termination requires written notice of six months.
Equity Awards Equity awards are issued on the same basis as awards to other Qantas Executives, and are governed by the Terms and
Conditions of the Deferred Share Plan and the Rules approved for each grant. Generally, any Rights which have not
vested lapse on cessation of employment.
Mr Dixon’s employment agreement provides that, at termination, unvested Rights awarded under the PRP will
remain in force (as if the CEO was remaining in employment), subject to both of the following conditions:
if termination is initiated by Qantas, there will be a pro rata continuation of awards at termination for the parts of
the performance period served under each award; and
any awards where less than 18 months of the performance period relating to that award has been served will lapse.
This approach reflects practice for Chief Executive Officers in certain S&P/ASX 50 companies. No vesting is allowed
on long-term equity awards where less than 18 months of the performance period has been served.
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Travel entitlements Available to the Executive and eligible beneficiaries:
Each calendar year whilst employed and post employment:
four international trips
12 domestic trips
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four international trips
12 domestic trips
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Performance Cash Plan Target of 60% of FAR Target of 50% of FAR
Actual PCP may be greater than or less than the target amount as determined by the Board to reflect achievement
of personal key performance indicators.
Following reward benchmarking, for the 2007/08 performance year, the Board has approved an increase to the
target cash incentive for Mr Dixon to 75 per cent of FAR and for Mr Gregg to 65 per cent of FAR.
Remuneration Report (Audited) continued
Director and Executive Remuneration Disclosures continued