Qantas said that the Sydney Morning Herald
(SMH) had overstated by more than $23 million the value of accelerated
equity to be granted to Qantas executives in association with the Airline
Partners Australia (APA) bid.

Qantas Executive General Manager People Kevin Brown said that Geoff Dixon
and his 10 senior managers would be reinvesting $36 million in the new
company - equating to 1 per cent of the opening equity.

Mr Brown said that, as outlined in the Bidder’s Statement, APA had agreed
to provide loans to the management team which would increase the value of
their invested equity by up to 4.5 per cent, depending on very stringent
performance hurdles over five years.

“Qantas executive managers are simply moving from one Long Term Incentive
Plan to another,” he said.

Mr Brown said that in relation to the particular examples noted by the SMH:

  Geoff Dixon would be entitled to $5.4 million in accelerated equity,
  which he would invest in APA;

  Peter Gregg would be entitled to $4.5 million in accelerated equity,
  which he would invest in APA; and

  in both cases, the executives would not receive the amount in cash on
  their last day under current ownership, but would roll it into a new
  incentive scheme.

“The inflated figures quoted by the SMH appear to include shares and rights
from previous incentive plans dating back as far as 1999, for which
performance hurdles have already been met,” Mr Brown said.

The Chairman of Qantas, Ms Margaret Jackson, said the SMH had also referred
to a $60 million amount as both a long term incentive and a performance fee
for Geoff Dixon.

“In fact, Geoff Dixon made a personal announcement in December 2006 gifting
the entire share of the Long Term Incentive Plan provided to him by APA to
a charitable trust, which he openly acknowledged could be valued at up to
$60 million depending on Qantas’ performance over five years.”

Ms Jackson said the Qantas Board had received independent remuneration
advice from PricewaterhouseCoopers on the treatment of executive shares and
rights in the event of a successful takeover.
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