Other information.

While we have structured this Remuneration Report broadly under the BIS guidelines, there are a number of tables that are still required under current legislation. These can be found below.

EXECUTIVE DIRECTORS’ REMUNERATION FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012

(XLS:) Executive Directors’ remuneration for the financial year ended 31 December 2012

£000s

Salary

Benefits – note 1

Cash in lieu of pension – note 2

Annual Bonus

Total 2012

Total 2011

Executive Director

Cash

Deferred

Tim Breedon – note A

408

10

90

435

943

1,810

Nigel Wilson – note B

653

20

97

487

292

1,549

1,060

John Pollock

424

20

93

325

195

1,057

995

Mark Gregory

420

20

37

295

177

949

747

Mark Zinkula – note C

126

150

19

128

77

500

n/a

The information in this table has been audited by the independent auditors, PricewaterhouseCoopers LLP.

Note A

Tim Breedon stepped down from the Board on 30 June 2012. His remuneration reflects the period 1 January 2012 to 30 June 2012.

Note B

Nigel Wilson was appointed as Group Chief Executive on 30 June 2012. His remuneration reflects the period he was Chief Financial Officer from 1 January to 30 June 2012 and Group Chief Executive from 1 July to 31 December 2012.

Note C

Mark Zinkula joined the Board on 18 September 2012. His remuneration reflects the period 18 September 2012 to 31 December 2012.

Note 1

Car allowance and private medical insurance.

For Mark Zinkula, benefits also include the proportion of schooling, housing and flights relating to the period 18 September to 31 December 2012 and resulting from his relocation package to the UK.

Note 2

For the defined contribution arrangements (applicable to Mark Gregory and to Nigel Wilson prior to him taking fixed protection), any balance over and above the Annual Allowance limit is paid in cash and is subject to normal payroll deductions of income tax and National Insurance. Following fixed protection, Nigel Wilson receives a cash contribution of 15% of base salary subject to normal payroll deductions.

Tim Breedon and John Pollock took enhanced protection in 2006 and now receive a cash allowance of 22% of base salary in lieu of pension contributions. This is subject to normal payroll deductions of income tax and National Insurance. Mark Zinkula receives a cash contribution of 15% of base salary in lieu of joining the UK pension plan. This is subject to normal payroll deductions of income tax and National Insurance.

The following tables provide further information on shares.

Directors’ share interests

The holdings of directors in office at the end of the year in the shares of the Company, including unvested shares awarded under the ESP, SBP and the Nigel Wilson recruitment award are shown in the adjacent table. These exclude unvested awards made by the Company under the PSP and SAYE but include awards that have vested in 2012 under the PSP but have not yet been exercised. Please see the Termination payments section for the treatment of Tim Breedon’s shares upon retiring from the Company.

(XLS:) Directors’ share interests

 

01 Jan 2012

31 Dec 2012

1.

Tim Breedon’s closing balance at 31 Dec 2012 excludes shares that vested at retirement (see the Termination payments section). Tim maintained his shareholding requirements while Group Chief Executive and sold shares only after he stepped down from the Board on 30 June 2012.

Tim Breedon1

2,497,216

905,553

Nigel Wilson

1,783,303

3,124,932

Mark Gregory

758,045

1,636,844

John Pollock

830,912

1,937,773

Mark Zinkula

403,233

478,704

John Stewart

161,133

230,776

Henry Staunton

309,574

314,069

Rudy Markham

172,228

199,250

Nick Prettejohn

23,164

53,013

Dame Clara Furse

52,012

67,975

Mike Fairey

11,181

27,239

Stuart Popham

8,699

27,445

Julia Wilson

0

22,305

Share options

Executive directors’ options outstanding under the Company Share Option Plan (CSOP), Executive Share Option Scheme (ESOS) and/or the Savings-Related Option Scheme (SAYE) comprise:

Movements in year

(XLS:) Share options – movements in year

Name

 

Share options 1 January 2012

Options lapsed/granted

Share options 31 December 2012

Exercise price
(p)

Earliest exercise date

Latest exercise date

The SAYE scheme is approved by HMRC and, in accordance with the relevant legislation, has no performance conditions.

The CSOP options are linked to SBP and do not represent additional value to the participant.

No share options lapsed or were exercised in 2012. The Company’s register of directors’ interests, which is open to inspection, contains full details of directors’ shareholdings and share options.

Tim Breedon

SAYE

0.00

 

 

 

CSOP

35,149

35,149

85.35

24/05/2013

23/06/2013

 

ESOS

0.00

 

 

Nigel Wilson

CSOP

35,149

35,149

85.35

24/05/2013

23/06/2013

Mark Gregory

SAYE

27,767

27,767

56.00

01/10/2014

31/03/2015

 

CSOP

35,149

35,149

85.35

24/05/2013

23/06/2013

 

ESOS

0.00

 

 

John Pollock

SAYE

17,038

17,038

98.60

01/052013

31/10/2013

 

CSOP

35,149

35,149

85.35

24/05/2013

23/06/2013

 

ESOS

0.00

 

 

Tim Breedon has six months from the date of him retiring from the Company to exercise his CSOP – see the Termination payments section. The information in this table has been audited by the independent auditors, PricewaterhouseCoopers LLP.

Share bonus plan (SBP) – outstanding awards

(XLS:) Share bonus plan (SBP) – outstanding awards

 

Awards outstanding at 1 January 2012

Awards granted in 2012

Awards
vesting
in 2012

Awards outstanding at 31 December 2012

Tim Breedon

622,139

255,799

877,938

0

Nigel Wilson

763,859

144,946

253,649

655,156

John Pollock

246,418

150,139

0

396,557

Mark Gregory

278,681

98,169

41,237

335,613

Mark Zinkula

403,233

75,471

0

478,704

The above table contains outstanding SBP awards which include the Company’s annual variable pay deferral arrangements and Nigel Wilson’s outstanding recruitment award. Participants receive dividends on outstanding awards.

Tim Breedon’s deferred SBP vested on the date of his retirement from the Company – see the Termination payments section.

Nigel Wilson’s recruitment award

(XLS:) Nigel Wilson’s recruitment award

Date of award

Number of shares

Date of vesting

Comments

The awards are generally contingent on Nigel Wilson retaining the 760,948 shares he bought on 16 October 2009.

The awards were made when the share price was 88 pence.

Full details of the rationale for these awards are set out in the Perfomance share plan section of the 2009 Report.

16 October 2009

253,649

16 October 2011

Price at vesting was 102.65 pence.

On vesting Nigel Wilson retained the shares.

16 October 2009

253,649

16 October 2012

Price at vesting was 135.40 pence.

On vesting Nigel Wilson retained the shares.

16 October 2009

253,650

16 October 2013

 

Performance Share Plan

The table below shows the number of shares that could be released if awards were to vest in full. Performance conditions are based on TSR outcomes – see the Current policy section. Participants do not receive dividends on unvested awards.

(XLS:) Performance Share Plan

 

Grant Date

Maximum award receivable for stretch performance

Awards vesting

Awards lapsing

Maximum outstanding awards as at 31 December 2012

1.

Tim Breedon’s awards were tested at the date of him leaving and to the extent the performance conditions were met, vested and were awarded on a pro-rata basis – see the Termination payments section. Under the plan rules, he has until 30 June 2013 to exercise.

Tim Breedon

6 May 2009

1,984,536

1,984,536

0

0

 

4 May 2010

1,839,484

0

0

1,839,4841

 

27 Apr 2011

1,385,934

0

0

1,385,9341

 

24 Apr 2012

1,391,796

0

0

1,391,7961

Nigel Wilson

16 Oct 2009

1,194,539

1,194,539

0

0

 

4 May 2010

1,256,004

0

0

1,256,004

 

27 Apr 2011

943,396

0

0

943,396

 

24 Apr 2012

947,949

0

0

947,949

 

14 Aug 2012

291,765

0

0

291,765

Mark Gregory

6 May 2009

798,969

798,969

0

0

 

4 May 2010

843,585

0

0

843,585

 

27 Apr 2011

686,106

0

0

686,106

 

24 Apr 2012

709,476

0

0

709,476

John Pollock

6 May 2009

953,608

953,608

0

0

 

4 May 2010

937,316

0

0

937,316

 

27 Apr 2011

706,003

0

0

706,003

 

24 Apr 2012

712,871

0

0

712,871

Mark Zinkula

27 Apr 2011

274,442

0

0

274,442

 

24 Apr 2012

278,359

0

0

278,359

The share price on the date of grant for the April 2012 awards was 117.83p and 131.27p for the August 2012 award.

These awards vest on the third anniversary of the award date subject to the satisfaction of performance conditions.

The awards granted in 2009, 2010 and 2011 were restructured as Nil Cost Options during 2011 to permit exercise of the options at any point between the vesting date and the fifth anniversary of grant. There was no amendment to the original performance conditions or performance period as a result of this change. The 2012 grant was also made in Nil Cost Options in the same way.

Nigel Wilson, Mark Gregory and John Pollock’s 2009 PSP awards have vested but have not been exercised.

The information in this table has been audited by the independent auditors, PricewaterhouseCoopers LLP.

Other share purchases

The table below shows changes in the directors’ share interests between 31 December 2012 and 5 March 2013, being the date of approval of this report. The executive directors’ share purchases were made pursuant to their participation in the Employee Share Plan.

2013 share purchases

(XLS:) Executive directors’ share purchases pursuant to their participation in the Employee Share Plan

 

Shares

Name

2 Jan

1 Feb

1 Mar

Nigel Wilson

97

95

124

Mark Gregory

97

95

124

John Pollock

97

95

124

Mark Zinkula

0

0

0

The following non-executive directors acquired shares pursuant to the regular monthly purchase of shares as part of their remuneration.

 

Shares

Name

2 Jan

1 Feb

1 Mar

John Stewart

4,577

4,459

4,273

Rudy Markham

1,358

1,323

1,268

Mike Fairey

1,001

975

935

Dame Clara Furse

1,049

1,022

979

Stuart Popham

1,212

1,181

1,132

Nick Prettejohn and Henry Staunton have chosen to take their fees fully in cash having reached their shareholding requirements.

Dilution limits

The Company’s all-employee plans and the now-closed ESOS operate within the ABI’s dilution limit of 5% of issued capital in ten years for executive schemes and all its plans will operate within the 10% of issued capital in ten years limit for all schemes.

As at 31 December 2012, the Company had 4.77% of share capital available under the 5% in ten years limit, and 9.07% of share capital under the 10% in ten years limit.

As at 31 December 2012, 33,244,805 shares were held by the Employee Benefit Trust to hedge outstanding awards of 63,206,646 shares for the PSP and SBP. This means that the Trust holds shares sufficient to cover 52.6% of outstanding awards.

RUDY MARKHAM
CHAIRMAN OF THE REMUNERATION COMMITTEE