Annual Report and Accounts 2006
|
Overview of remuneration elements
for executives including executive Directors| Element | Objective | Performance period | Performance conditions |
|---|---|---|---|
| Base salary | Reflects market value of role and individual's skills and experience | Not applicable | Reviewed annually, following external benchmarking and taking into account individual performance and the increases awarded to other employees |
| Annual Incentive Plan (AIP) | Incentivises delivery of performance goals for the year | One year | Award subject to achievement of revenue and Underlying economic profit (UEP) targets for the year |
| Bonus Share Retention Plan (BSRP) Note: This is a voluntary investment programme |
Incentivises sustained annual growth Aids retention of executives Supports and encourages share ownership |
Three years | Basic award and an additional match subject to continued employment and to achievement of compound annual growth in aggregate UEP |
| Long Term Incentive Plan (LTIP) | Incentivises long-term value creation Aids retention of executives |
Three years | Half of award subject to total shareowner return (TSR) ranking relative to an international peer group Half of award subject to achievement of compound annual growth in aggregate Underlying earnings per share (UEPS) |
| Discretionary Share Option Plans (No awards made since 2005) |
Incentivises earnings growth Aids retention of executives Incentivises increasing share price |
Three to ten years | Vesting subject to achievement of compound annual growth in (point to point) UEPS. First test at end of three, then five years Value of award comes from share price growth at time of exercise |
Whether particular performance conditions are met is assessed with reference to our annual accounts or to external data which is widely available. These methods have been chosen as they are or can be independently audited.