Directors' report on remuneration (PDF 174 KB) - Inchcape
Directors' report on remuneration (PDF 174 KB) - Inchcape
Directors' report on remuneration (PDF 174 KB) - Inchcape
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Directors’ <str<strong>on</strong>g>report</str<strong>on</strong>g> <strong>on</strong> remunerati<strong>on</strong> c<strong>on</strong>tinued<br />
Element Objective and link to strategy Operati<strong>on</strong> and performance metrics Opportunity<br />
Performance<br />
share plan (PSP)<br />
Save as you earn<br />
(SAYE)<br />
Provide a meaningful reward<br />
to senior executives linked to the<br />
l<strong>on</strong>g-term success of the business<br />
The mix of ‘normal’ and ‘enhanced’<br />
performance shares enables the<br />
delivery of median pay for median<br />
performance; upper quartile pay<br />
for upper quartile performance;<br />
and upper decile pay for upper<br />
decile performance<br />
Ensure balance between<br />
growth and returns as above<br />
Strengthen alignment with<br />
shareholders by defining award<br />
sizes as a number of shares<br />
To encourage share ownership<br />
across the organisati<strong>on</strong><br />
Annual awards of ‘normal’<br />
performance shares, vesting 75%<br />
<strong>on</strong> three year EPS growth, and 25%<br />
<strong>on</strong> three year average ROCE<br />
Annual awards of ‘enhanced’<br />
performance shares, vesting <strong>on</strong><br />
stretch EPS targets, over and above<br />
those attached to ‘normal’<br />
performance shares<br />
Any dividends paid would accrue<br />
over the vesting period and would<br />
be paid <strong>on</strong>ly <strong>on</strong> those shares<br />
that vest<br />
The Committee can reduce or<br />
prevent vesting in the event of<br />
a material restatement of the<br />
Group Financial Statements<br />
or gross misc<strong>on</strong>duct<br />
Participants make m<strong>on</strong>thly savings,<br />
over a three year period. At the end<br />
of the savings period the funds are<br />
used to purchase shares under opti<strong>on</strong><br />
As this is an all-employee scheme<br />
and Executive Directors participate<br />
<strong>on</strong> the same terms as other<br />
employees, the acquisiti<strong>on</strong> of shares<br />
is not subject to the satisfacti<strong>on</strong> of<br />
a performance target<br />
Award levels are expressed as a<br />
number of shares, subject to an<br />
individual limit of 300% of salary<br />
However, the Committee will review<br />
award sizes prior to each grant to<br />
ensure that they are appropriate in<br />
light of market data and individual<br />
and Group performance<br />
Subject to this review, and the<br />
individual salary limit, for 2013 the<br />
Group Chief Executive will receive<br />
304,170 normal awards and 101,390<br />
enhanced awards, and the Group<br />
Finance Director will receive 130,760<br />
normal awards and 26,150<br />
enhanced awards<br />
Maximum savings of £250 per m<strong>on</strong>th<br />
Share ownership<br />
guidelines<br />
Pensi<strong>on</strong><br />
Other benefits<br />
To encourage share ownership<br />
and ensure alignment of executive<br />
interests with those of shareholders<br />
To provide market competitive<br />
pensi<strong>on</strong> benefits where it is cost<br />
effective and tax efficient to do so<br />
To provide market competitive<br />
benefits where it is cost effective<br />
and tax efficient to do so<br />
Requirement to hold a fixed<br />
number of shares. Executives are<br />
required to make progress in<br />
achieving these targets with their<br />
pers<strong>on</strong>al, after tax, funds regardless<br />
of the extent to which l<strong>on</strong>g-term<br />
incentives vest, if at all<br />
The Group’s new pensi<strong>on</strong> scheme,<br />
Cash+, is a career average cash<br />
retirement scheme which accrues<br />
16% of earnings (capped at £300,000<br />
p.a.) paid as a lump sum at the age<br />
of 65. Members are required to<br />
c<strong>on</strong>tribute 7% of pensi<strong>on</strong>able salary<br />
Includes:<br />
company cars<br />
medical care<br />
life assurance premiums<br />
Equivalent to 200% of base salary<br />
for Executive Directors<br />
Each Executive Director has five years<br />
from 2007, or date of appointment if<br />
later, to reach this shareholding target<br />
André Lacroix receives a cash<br />
supplement of 40% of his base<br />
salary and is eligible to join the<br />
Cash+ scheme<br />
John McC<strong>on</strong>nell receives a<br />
supplement of 30% of base<br />
salary and is eligible to join the<br />
Cash+ scheme<br />
André Lacroix: £18,400<br />
John McC<strong>on</strong>nell: £6,200<br />
All benefits are n<strong>on</strong>-pensi<strong>on</strong>able<br />
N<strong>on</strong>-Executive<br />
Directors fees<br />
To provide fair remunerati<strong>on</strong>,<br />
reflecting the time commitment<br />
and resp<strong>on</strong>sibilities of the roles<br />
N<strong>on</strong>-Executive Directors receive<br />
a fixed fee and do not participate<br />
in any incentive schemes or receive<br />
any other benefits<br />
From 1 May 2013 the standard<br />
N<strong>on</strong>-Executive Director fee is £55,000<br />
with an additi<strong>on</strong>al fee for a<br />
Chairmanship of a Committee of<br />
£10,000. The Deputy Chairman is<br />
paid a single fee of £76,000 and the<br />
Chairman a single fee of £300,000<br />
52 <strong>Inchcape</strong> plc Annual Report and Accounts 2012