Linking strategy, performance and remuneration
How we assessed the Enterprise Scorecard in FY19
Enterprise Scorecard
The Enterprise Scorecard contains a range of key performance indicators (KPIs) that are aligned to the strategic priorities of the enterprise. The FY19 Enterprise Scorecard KPIs and performance against those are detailed in the table below:
|
Measure |
KPI |
Link to strategy |
Performance |
Outcome |
|
Enterprise Financials 50% |
Profit Before Tax (PBT) (25%) |
Australia Post maintains both a community and a commercial regulatory purpose. We are required, where possible, to make a commercial return on our assets. |
2019 full year Group PBT of $41.1 million exceeded expectations and is $16.1 million or 64.3 per cent ahead of budget driven by the strong performance in Parcels, Financial Services, coupled with significant efficiency gains. |
Exceeded Target |
|
Group Revenue (25%) |
Australia Post needs to protect our revenue base in letters, grow in parcels, and seek additional new revenue streams to grow the business. |
2019 full year revenue of $6,924.0 million is up $61.2 million or 0.9 per cent on budget, with a strong contribution from our business customers in Domestic and International Parcels, Financial Services in our post offices and the consolidation of APG post the buyback of the 60 per cent stake. |
Met Target |
|
|
Business Unit Financials 10% |
Enterprise Business Efficiency (5%) |
Continually challenging ourselves to execute on efficiencies across the business enables Australia Post to be able to invest more in longer-term growth. |
The program has delivered $259.3 million of sustainable efficiencies for 2019 full year. This is almost $60 million favourable to budget driven predominately by efficiencies created in the network. |
Exceeded Target |
|
New Revenue (5%) |
New revenue streams are a critical component of growing our total revenue base, and maintaining a profitable business. |
The 2019 full year outcome of $235.4 million exceeded Budget by $120.4 million due in part to the successful acquisition of APG, the new Bank@Post agreements and growth from new customers. |
Exceeded Target |
|
|
Strategic KPIs 20% |
Enterprise NPS (5%) |
Customer advocacy and loyalty is critical in order to win in all our businesses, particularly in a fiercely competitive eCommerce market. |
FY19 full year NPS of +20.5, favourable +1.4 to Target (+19.1) and up on last year +3.4 (FY18 Result +17.1) following an improvement in regional / rural areas, and letter deliveries, plus an investment in customer services and further roll out of locker solutions. |
Met Target |
|
International Parcel Revenue (5%) |
We will become a global, cross-border eCommerce logistics provider. |
International parcel revenue of $586.1 million exceeded target supported by the buy-back of our international commercial arm (APG) which underpinned stronger inbound and outbound parcels. |
Exceeded Target |
|
|
Transformation of AP brand to red & white |
We will return the Australia Post brand to its iconic status. |
Australia Post continues our transformation to one lead brand. Customers are managed as one. Uniforms, packaging and branding of vehicles were all relaunched. |
Met Target |
|
|
Rejuvenate role of Post Office network |
Our Post Office network will be a leading edge market place that connects Australians with the world. |
New Bank@Post agreements with 74 financial services companies underpinned not only growth but has enabled critical IT investment to support new and additional services. |
Met Target |
|
|
Best in Class Core products |
We will create a range of products that customers value and trust. |
Continued to develop core parcel products including expanding Express Post, faster delivery times and rolling out 3 hour service. Trialled new letter products and secured new identity agreements with Government partners. |
Met Target |
|
|
New Network Capacity |
We will always provide great service and value by investing in network capability and capacity to be best in class. |
Although we have faced extremely challenging weather conditions, the business delivered through Peak. Built Redbank, which will be operational for Peak FY20 and be the largest facility in the Southern Hemisphere. |
Met Target |
|
|
Manage Enterprise Risk |
Manage Enterprise risk within Board tolerance. |
We require more work on cyber security and our safety culture. Positively we have continued to de-risk the balance sheet with the disposal of the 10.1 per cent stake in Aramex and securing control back of our International commercial arm and driving cash growth. |
Target Not Met |
|
|
Identify significant opportunities to grow Bus to 10Bn |
We need to realise significant growth opportunities to generate a sustainable enterprise profit. |
Secured the buyback of the 60 per cent stake in our international commercial arm which will both protect international volumes and act as a platform for growth. Shortlisted for Visa Bid and built a strategy to support the government on services and secured agreement from 74 financial services businesses. |
Met Target |
|
|
Leadership & Safety Management 20% |
Group TRIFR (5%) |
The health, safety and wellbeing of our people is our most important cultural priority. |
A full year outcome of 56.4 (reported as at 30 June 2019), is +15.5 unfavourable to target aspirations of 40.9. Total Recordable Injuries were 3,291, +302 higher than last year. During July 2019, 119 additional TRIs were lodged for the previous period. On a positive note, there has been an 11 per cent reduction in vehicle incidents and 9 per cent fewer motorcycle accidents compared to the same time last year. |
Target Not Met |
|
Group People Engagement (5%) |
We strongly believe that ensuring our people are engaged is critical to delivering our future growth aspirations. |
2019 saw record responses with 28,575 employees (81%) participating in our say2action employee engagement survey. Areas of particularly strong performance include understanding our strategy (87 per cent), safety (84 per cent & 81 per cent), community purpose (85 per cent) and customer delight (82 per cent). New survey providers, We Are Unity and Qualtrics, set a new baseline of 68 per cent for use going forward, which is 1 per cent higher than Australian benchmarks. A year-on-year comparison using the previous methodology shows that the overall engagement score held steady at 60 per cent but did not reach our 63 per cent target. |
Target Not Met |
|
|
Leadership role on Safety |
Safety is a one of our four values, and the safety and wellbeing of our people is our highest priority. |
Injury Claims responded in 24 hours improved significantly to 95 per cent and the number of approved Doctors increased over 60 per cent. Completed the SRCC process and ensured compliance requests met. Led a significant safety audit over 64 facilities. Partnered with unions to develop an employee plan to address safety. |
Met Target |
|
|
Support Execs in delivering their Strategic Priorities |
Our leaders are unified around all strategic priorities. |
Significant examples of cross collaboration, including engagement of LPO’s, securing Bank@Post agreements, Sale of Aramex 10.1 per cent stake and buyback of 60 per cent stake in APG in addition to leading efficiency targets. |
Met Target |
|
|
Build leadership engagement with Board |
Board engagement and support for our strategic direction is critical to our strategy be realised. |
Improved Board reporting coupled with broader exposure to the Board of key executives. All business cases to the Board matched to strategic framework. |
Met Target |
|
|
Develop leadership talent and succession |
The quality of our leaders will be a key determinant in our future success. |
Delivered a talent assessment program for top 75 leaders and have built a succession plan for key ET leadership roles. |
Met Target |
FY19 Business unit scorecards
Senior executives’ business unit (BU) scorecards contain Enterprise and BU level financial, strategic, leadership and safety KPIs that are relevant to the senior executives’ business area and the individual’s role and responsibilities.
The Scorecards vary by hierarchy.
Based on the performance against the enterprise scorecard and the achievements delivered by the GCEO&MD in FY19, the Board determined that the GCEO&MD should receive a STI award of 75 per cent of maximum STI. In accordance with the plan deferral rules 25 per cent of the GCEO&MD STI award will be deferred until September 2020 and will remain “at risk”, contingent on the sustained performance of the business at the absolute discretion of the Board.
Senior executives were awarded an average of 72 per cent of the maximum STI. Participants who have a FAR of $400,000 or more as at 30 June of the performance cycle will have 25 per cent of their total target and stretch incentive deferred for 12 months. The deferred amount is subject to review and Clawback by the Board at its absolute discretion. An average STI award of 54 per cent of FAR will be paid to senior executives in September 2019 and an average of 18 per cent will be deferred until September 2020.
Individual FY19 STI awards for the GCEO&MD and Senior Executives are provided in the table below.
|
Name |
Role |
STI Award Non-Deferred |
STI Award Deferred |
STI Award Total |
|||
|
% of FAR |
$ |
% of FAR |
$ |
% of FAR |
$ |
||
|
Christine Holgate |
GCEO & MD |
56.25% |
$831,375 |
18.75% |
$277,125 |
75.00% |
$1,108,500 |
|
Robert Black |
Group Chief Operating Officer |
55.13% |
$531,956 |
18.38% |
$177,319 |
73.50% |
$709,275 |
|
Ingo Bohlken |
EGM Product & Innovation |
55.13% |
$418,950 |
18.38% |
$139,650 |
73.50% |
$558,600 |
|
Rodney Boys1 |
Group Chief Financial Officer |
0.00% |
$0 |
0.00% |
$0 |
0.00% |
$0 |
|
Annette Carey |
EGM International Services |
52.13% |
$390,938 |
17. 38% |
$130,313 |
69.50% |
$521,250 |
|
Susan Davies |
EGM People & Culture |
55.13% |
$413,438 |
18.38% |
$137,813 |
73.50% |
$551,250 |
|
Nicole Sheffield |
EGM Community & Consumer |
53.38% |
$400,313 |
17.79% |
$133,438 |
71.17% |
$533,750 |
|
Gary Starr |
EGM Business & Government |
55.13% |
$413,438 |
18.38% |
$137,813 |
73.50% |
$551,250 |
- APCIP participants must be employed by 31 March 2019 to be eligible for an FY19 STI payment.
Long-term incentives
As highlighted in the FY17 Remuneration Report, from FY18 the Long Term Incentives (LTI) Plan will no longer be offered to any senior executive (including the GCEO&MD).
The second tranche payment of the 2015 to 2017 LTI award (representing one third of the total LTI award) was paid on 1 November 2018 to eligible participants. Participants must be employed by Australia Post on the day of payment or they forfeit the payment.
|
Name |
Role |
2015 to 2017 LTI Award Second Tranche Payments1 (Paid November 2018) |
|
Christine Holgate |
GCEO&MD |
Not Eligible to Participate |
|
Robert Black |
Group Chief Operating Officer |
$330,000 |
|
Ingo Bohlken |
EGM Product & Innovation |
Not Eligible to Participate |
|
Rodney Boys |
Group Chief Financial Officer |
Not Eligible to Participate |
|
Annette Carey |
EGM International Services |
Not Eligible to Participate |
|
Susan Davies |
EGM People & Culture |
Not Eligible to Participate |
|
Nicole Sheffield |
EGM Community & Consumer |
Not Eligible to Participate |
|
Gary Starr |
EGM Business & Government |
Not Eligible to Participate |
|
Former executives |
||
|
Christopher Blake2 |
EGM Corporate Services |
$298,000 |
|
Christine Corbett3 |
EGM Community & Consumer |
Forfeit $320,000 |
|
Janelle Hopkins4 |
Group Chief Financial Officer |
$146,667 |
|
Andrew Parker |
EGM International Services (Seconded) |
Not Eligible to Participate |
|
Andrew Walduck3 |
EGM Product & Innovation |
Forfeit $250,000 |
1 Payments are subject to being employed by Australia Post on 1 November 2018.
2 Christopher Blake resigned from Australia Post with effect from 31 December 2018 so was on payroll as at 1 November 2018 and received the second tranche.
3 Christine Corbett and Andrew Walduck left Australia Post with effect from 13 July 2018 and so forfeit the payment.
4 Janelle Hopkins resigned from Australia Post with effect from 3 May 2019 so was employed as at 1 November 2018 and received the second tranche.
Visit
https://www.transparency.gov.au/annual-reports/australian-postal-corporation/reporting-year/2018-2019-91