Australia Post Annual Report 2008–09

27 Key management personnel remuneration and retirement benefits (continued)
(b) Compensation policies for key management personnel (continued)
Executive compensation
Executive officers are those who are concerned with, or take part in, the management of entities in the consolidated group (excluding the managing
director). Compensation arrangements for senior executives are reviewed and determined by the managing director, within parameters set by the
Human Resources Committee. Advice is sought from independent specialised compensation consultants to ensure that payments to executives are
in line with market practice and are competitively placed to attract and retain necessary talent for the work required by these roles.
The board is responsible for the remuneration arrangements for the managing director. In doing so it has adopted a set of principles approved by
the Remuneration Tribunal designed to link the level of remuneration with the financial and operational performance of the corporation.
On a periodic basis advice is sought from independent specialised remuneration consultants on the structure of remuneration packages and the
quantum of increases that apply in other comparable Australian corporations. On the basis of this advice, the managing director ensures that
payments to other senior executives are in line with market practice and are competitively placed to attract and retain the necessary talent for the
work required by these roles. Incentive rewards for the managing director and other senior executives for meeting or exceeding specific key annual
business objectives are linked to the annual business plan at a corporate and individual level.
Measures and targeted achievement levels are reviewed each year to reflect changes in the business priorities for the forthcoming year. The
measures include financial, customer satisfaction, employee engagement and other individual measures that support the key business objectives.
Before a reward is payable, a threshold must be reached, according to predefined measures. Both the managing director and other senior executives
are employed under individual contracts of employment that are not limited to a specific duration. Continuation of employment is subject to ongoing
satisfactory performance.
Where Australia Post terminates the managing director’s or another senior executive’s employment for reasons other than performance or
misconduct, they are entitled to: in the case of the managing director, 60 days’ payment in lieu of notice and a termination payment of 1.5 times
annual base salary; and for other senior executives, 90 days’ payment in lieu of notice and a termination payment calculated on four weeks for each
of the first five years of employment and three weeks for every year thereafter to a maximum of 84 weeks, including the payment in lieu of notice.
All of the above payments are based on annual base salary.
(c) Other transactions and balances with key management personnel
There were no significant transactions between the corporation and key management personnel. Any transactions were of a trivial nature.
(d) Compensation of key management personnel by category
Short-term benefits
Post-employment benefits
Other long-term benefits
Termination benefits
2009
$
7,670,058
1,091,362
199,051
–
Consolidated Corporation
2008
$
7,936,377
1,048,301
290,846
–
2009
$
7,670,058
1,091,362
199,051
–
2008
$
7,936,377
1,048,301
290,846
–
Total compensation 8,960,471 9,275,524 8,960,471 9,275,524
Australia Post Annual Report 2008–09 | Financial and statutory reports 95