Annual Report 2011 - T-Hrvatski Telekom

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the achievement of two share value based performance
targets. Upon expiry of the term of the plan, the
Supervisory Board of the Company shall determine
whether each of the targets has been achieved.
Based on the findings of the Supervisory Board, the
Management Board shall determine and announce the
level of target achievement.
All MTIPs have two targets which are equally
weighted and cannot be changed during the MTIP
duration. The first target is based on the increase
of the share price by a certain percentage; the
second target is related to the share price movement
compared to the complex return index.
The incentives themselves consist of 20 percent or 30
percent of the participants’ individual annual salary as
contracted on the beginning of each MTIP depending on
the management level of the participant and according to
the Supervisory Board decision. Participants’ individual
annual salary is defined as the annual amount of total
fixed salary and the amount of variable salary in case of a
100 percent target achievement.
Based on decision of the Supervisory Board it was
established that one MTIP 2008 target out of two has
been achieved. The rewards for participants of MTIP
2008 were paid out in March 2011. In accordance with
targets achievements, payment of 50% of the total
amount was made.
LTIP — Variable II 2011 is new cash-based plan with four
equally weighted performance parameters and cannot be
changed during plan duration. Two targets are financial
KPIs, Earnings Per Share (EPS) and adjusted operating
Return On Capital Employed (ROCE), third and forth
targets are customer and employee satisfaction.
According to LTIP — Variable II 2011, the amounts
awarded for International Business Leaders (BLT’s)
is fixed sum specified in the individual employment
contract and for other participant is 30% or 20% of
the participants’ individual annual salary as contracted
on the beginning of the plan depending on the
management level of the participant and according to
the Supervisory Board decision. Participants’ individual
annual salary is defined as the annual amount of total
fixed salary and the amount of variable salary in case of
a 100 percent target achievement.
In contrast to the former MTIP structure, Variable II
offers the option of exceeding the amounts earmarked
for award, limited to 150% of the award volume per
parameter. The parameters are independent of each
other, hence each parameter is assessed separately. Both
potential excesses and shortfalls in relation to targets are
accounted for on a graded basis per target parameter
(departure from the principle of “all or nothing”).
All gains and expenses resulting from changes of the
related provisions for all MTIP plans recognized for
employee services received during the year are shown in
the following table:
Consolidated financial statements
Expenses for providing for cash-settled share-based and non
share-based payment transactions
Gains arising from cancellation of provision for cash-settled
share-based and non-share based payment transactions
2011
HRK millions
3
-
2010
HRK millions
4
1
33 Auditor’s fees
The statutory auditors of the Group’s financial statements
have rendered services of HRK 6 million in 2011 (2010:
HRK 7 million). Services rendered in 2011 and 2010 relate
to the audits and reviews of the financial statements, audit
of financial statements prepared for regulatory purposes
and audit of SAP transformation project.
34 Events after reporting period
No other events or transactions have occurred since
31 December 2011 or are pending that would have
a material effect on the financial statements at that
date or for the period then ended, or that are of
such significance in relation to the Group’s affairs to
require disclosure in the financial statements.