FSA Annual Report 2006/07 - Better Regulation Ltd

Section five – Corporate governance statement and remuneration report
FSA Annual Report 2006/07
63
Remuneration report
This section of the remuneration
report is not subject to audit.
Information on the appointment of
the Chairman and the Executive
Directors can be found in the Report
of the Directors on page 55 and in
the emoluments table on page 65.
The Executive Directors have
continuous contracts of employment
that provide for 12 months’ prior
notice of termination by either party,
with a maximum of 12 months’
total remuneration (as described
below) payable in the event of early
termination of the contract by the
FSA. In determining the
remuneration of the Executive
Directors, the Committee undertook
an evaluation of their performance,
assisted by an assessment of
performance against objectives. The
objectives for each Director took
account of the FSA’s overall
objectives by reference to the
Business Plan and the individual
Director’s areas of responsibility.
The Committee also considered
feedback on each individual Director
from HM Treasury and the Chairs
of the Practitioner and Smaller
Businesses Practitioner Panels. It has
the benefit of advice from the
Director, Human Resources, and
market data from Watson Wyatt, its
external consultants. The Company
uses Watson Wyatt on an ad hoc
basis for salary benchmarking
exercises. The total remuneration
package of the Executive Directors
comprises the same four elements as
apply to other FSA employees.
• Basic Pensionable Salary
Salaries are reviewed annually. In
setting base salaries for the
Chairman and Executive Directors,
the Committee aimed, so far as
possible, to position these at or
around the median market level
applying in the private sector.
• Performance-related bonus
The Executive Directors are eligible
to be considered for a performance
related bonus up to a maximum of
25% of basic pensionable salary. At
his request, the Chairman was not
considered for a bonus.
• Other benefits
A sum is available for each employee
which may be spent against a range
of benefits. The sum for the
Chairman and Executive Directors is
shown in table 5.5. The Chairman
and Executive Directors also have
access to a car and driver, and an
appropriate portion of these costs is
included in ‘other emoluments’ in
the table on page 65.
• Pensions
There are two sections to the FSA
Pension Plan (the Plan) operated by
the FSA, both of which are noncontributory;
a defined benefit
section (closed to new entrants), and
a defined contribution section.
Callum McCarthy, David Kenmir
and Clive Briault are members of the
defined contribution section of the
scheme. Before they were appointed
as Managing Directors, David
Kenmir and Clive Briault were
members of the FSA’s defined benefit
scheme, and they retain deferred
benefits in that section.
John Tiner and Hector Sants are not
members of the Plan and are
contractually entitled to receive a
non-pensionable supplement to their
base salary, in lieu.
The sums paid to the Chairman and
each of the Executive Directors in
respect of each component are in the
table on page 65.
Table 5.5
Director Callum McCarthy John Tiner Clive Briault David Kenmir Hector Sants
Flexible benefits account (£) 25,381 25,986 20,072 19,378 22,046