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