Punch Taverns plc 2011 Annual Report

Punch Taverns plc
Annual Report and Financial Statements 2011
35
Elements of remuneration
Base salary and benefits
The table below shows the current base salaries for both Executive Directors.
Name Position Base salary
Roger Whiteside Chief Executive Officer £430,000
Steve Dando Finance Director £275,000
Roger Whiteside’s base salary was increased from £400,000 to £410,000 on 27 February 2011 following an annual salary review and
from £410,000 to £430,000 (an increase of 4.9%) with effect from 1 August 2011 following his promotion from Managing Director
– Punch Partnerships (Leased) to Chief Executive Officer upon completion of the Spirit demerger. At the same time, reflecting
the increased responsibilities associated with the role, Steve Dando’s base salary was increased from £250,000 to £275,000
(an increase of 10%).
The base salary for Mike Tye, Managing Director – Punch Pub Company (Managed) until he stepped down from the Punch Board
upon the completion of the demerger to join Spirit, was increased from £400,000 to £410,000 on 27 February 2011 following an
annual salary review. The base salary for Ian Dyson, who stepped down as the Punch Taverns plc Chief Executive Officer upon the
completion of the demerger to join Spirit, was not adjusted during the financial year.
The Company’s policy is to provide Executive Directors with a market-competitive level of benefits, including Company car or
car allowance, private medical insurance, lump-sum life insurance for death in service and income protection insurance for
long-term disability.
Annual bonus
For the 2010/11 annual bonus arrangement, the performance conditions for the Executive Directors were structured as follows:
Key performance area
Weighting
Group financial performance 75%
Performance of individual’s own business area or function (for the Chief Executive Officer this is the Group as a whole)
and their overall personal contribution to the business 25%
• The maximum annual bonus was 150% of base salary.
• One-third of any bonus paid is deferred into Company shares for a two-year period.
• For any bonus to be payable under the individual targets, at least threshold profit performance must have been achieved.
• A clawback provision operates whereby the Committee may seek to claw back any bonus amounts paid to executives which
are subsequently found to have been based on materially inaccurate results.
The annual bonus awards for 2010/11 were determined by the Committee after assessing performance against the financial targets
and personal performance and after considering:
• a full strategic review of the business carried out in the year;
• execution of the demerger transaction with minimal disruption to the ongoing business;
• continuing improvements in underlying trading performance; and
• the continued regulatory scrutiny of the leased operating model.
The bonus awards were 100% of salary for the Chief Executive Officer and 100% of salary for the Finance Director.
The 2011/12 annual bonus arrangements will continue to operate as above. However, given the focus on short-term improvement
of the business post demerger of Spirit and the dilution constraints currently facing the Company, annual bonus potential has been
increased from 150% of base salary to 250% of base salary for the Chief Executive and 200% of base salary for the Finance Director
with corresponding decreases in long-term incentive potential (see below).
Financial statements Governance
Business review