Remuneration levels for Australia Post’s non-executive directors are determined by the Commonwealth Remuneration Tribunal. For 2005/06 these were as follows:

• Chairman
  $135,330
• Deputy Chairman
  $75,478
• Directors
  $67,670
• Audit Committee Chairman
  $15,620
• Audit Committee Member
  $7,808

Details of individual amounts received in 2005/06 by each non-executive director are provided in Note 27 to the financial statements.

Remuneration levels for Holders of Part-Time Public Offices (including Australia Post non-executive directors) have been increased by the Remuneration Tribunal by 4.4 per cent, with effect from 1 July 2006.

The Human Resources Committee is responsible for reviewing and recommending to the board the remuneration arrangements for the managing director. These arrangements are then implemented in accordance with remuneration policy and procedural arrangements approved by the Remuneration Tribunal.

In undertaking this role the committee has adopted a set of principles approved by the Remuneration Tribunal which are designed to link the level of remuneration with the financial and operational performance of the corporation.

Remuneration arrangements for other senior executives are reviewed and determined by the managing director. On a periodic basis advice is sought from independent specialised remuneration consultants on:

• the structure of remuneration packages
• 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 other 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
• 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 upon annual base salary. Remuneration details for the managing director and the other key executives with the greatest authority for the management of Australia Post are provided in Note 27 to the financial statements.