Punch Taverns plc 2011 Annual Report

34
Punch Taverns plc
Annual Report and Financial Statements 2011
Report on Directors’ remuneration continued
The table below summarises each element of the Company’s Total Reward policy for Executive Directors, and its key features.
Component Size Market position Purpose Delivery Other key features
Base salary Varies by role Median.
• Reviewed annually.
and individual.
Annual
performance
bonus
Long Term
Incentive Plan
Annual bonus
potential was
increased from
150% to 250%
of base salary for
the Chief Executive
and to 200%
of salary for the
Finance Director
for 2011/12.
Maximum award
level of 200% of
base salary (face value
of shares). LTIP award
levels will reduce from
200% of base salary
(2010: 125%) to
50% of salary in the
first year of demerger.
Upper quartile
opportunity.
Upper quartile
opportunity
(although the
current grant
policy has been
reduced given
current dilution
constraints).
To recognise the
market value of
the employee
and the role.
To drive and
reward annual
performance of
individuals, teams
and the Group.
To drive and
reward sustained
performance of
the Group and to
align the interests
with those of
shareholders.
• Cash
• Monthly
• Pensionable
• One-third
deferred shares,
two-thirds cash
• Annual
• Non-pensionable
• Clawback clause
• Shares subject
to performance
conditions
• Annual awards
vesting after
three years
• Non-pensionable
• Based on annual
performance of
the individual and
the Company.
• Performance
condition for
awards in
2010/11 was
total shareholder
return, against
two peer groups.
Pension
No LTIPs vested for
Executive Directors
during 2010/11.
25% of base salary
for Chief Executive
Officer and 20%
of base salary for
Executive Directors.
Median.
To provide a
market-competitive
level of contribution
to pension.
• Defined
contribution /
personal pension
arrangement.
The chart below shows the relative proportions of package components for the Chief Executive Officer for 2011/12. Pay at risk
(annual bonus and long-term incentive) constitutes more than two-thirds of the package.
n Base salary and pension contribution 29%
n Annual bonus (max) 59%
n Long-term incentive (max) 12%