C9. Remuneration Outcomes
Performance Snapshot
The overall level of executive reward takes into account the performance of the Company over a number of years, with greater emphasis given to the current
and immediately preceding year. Over the past five years, the Company’s profit from ordinary activities after income tax (NPAT) has increased by a compound
rate of 7.3 per cent per annum. During the same period, average executive key management personnel remuneration has increased by a compound rate of
6.3 per cent per annum. Short term incentive bonus and long term incentives /share based payments as a percentage of total annual reward for key
management personnel are presented in the following table for each year.
Table 13 – Five- year Company performance
2006 20071 2008 20092 20103
NPAT $’000 55,590 110,447 82.376 (54,490) 73,556
ROE 9.7% 11.5% 12.1% (7.6%) 9.3%
Dividends per share paid 22.00c 26.00c 36.00c 22.75c 12.25c
STI as % of Senior Executive Total Annual Remuneration 19.6% 25.8% 15.3% 18.3% 17.9%
LTI as % of Senior Executive Total Annual Remuneration 9.6% 19.7% 28.0% 1.3% 5.8%
1. The 2007 results included one-off profit after tax of $34,744,000 relating to the disposal of the infrastructure assets to Transfield Services Infrastructure Limited
2. Includes an impairment loss $148,443, 000 post tax
3. Includes $22,900,000 equity accounted share of losses associated with TSI Fund capital structure review
Incentives aligned to shareholder value
The Company’s incentive remuneration arrangements operate as intended in that they directly reflect the Company performance. Chart 1 illustrates the STI
per cent of target paid has tracked below EBITA from 2008 to 2010. Chart 2 illustrates the close alignment of the percentage of LTI performance rights
vested, earnings per share and share price. Both STI and LTI are tied directly to the results delivered by the Company.
Chart 1
Chart 2
200
180
160
140
120
100
80
60
40
20
0
EBITA A$mil
Key management personnel short term incentive outcomes % of
Target relative to EBITA*
STI % of Target Paid
% of Target TSE EBITA (normalised)
2006 2007 2008 2009 2010
Year
100
90
80
70
60
50
40
30
20
10
-
12
10
8
6
4
2
0
-2
-4
Share price as at 30 June.
Long-term incentive vesting outcomes relative to Earnings Per Share
and Share Price
120
100
80
60
40
20
0
-20
-40
% of LTI Awards Vested and EPS