Annual report on remuneration:
‘Single figure’ of remuneration.

Annual report on remuneration:
‘Single figure’ of remuneration.

The following table shows a single total figure of remuneration for each executive director in respect of qualifying services for the 2013 financial year together with a comparative figure for 2012. Details of NEDs’ fees are set out in a separate table in the Non-executive directors section.

Single figure £000s

(XLS:) Executive Directors’ ‘single figure’ for 2013 and 2012

Executive director

Salary

Benefits
– note 1

Pension
– note 2

Annual variable pay (AVP)
– note 3

Total remuneration exc. PSP/LTIPs

PSP/LTIPs
– note 4

Total remuneration

This table has been audited by PwC.

 

 

2012 notes

a.

Nigel Wilson was CFO from 1 January 2012 to 30 June 2012 and Group chief executive from 30 June 2012 – 31 December 2012.

b.

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

 

 

2013 notes

a.

The increase in the total remuneration for Nigel Wilson in 2013 over 2012 is reflective of 2013 being the first full year in which he was Group chief executive and the significant increase in the share price, in the three year period ending in May 2013 which is reflected in the value of the PSP.

b.

Mark Zinkula’s benefits for 2013 include the vesting of shares relating to a legacy award from when he became CEO LGIM and prior to him joining the Board. This accounts for £357,000 of the benefit figure shown above.

2013

 

 

 

 

 

 

 

Nigel Wilson(a)

750

66

113

873

1,802

2,270

4,072

John Pollock

509

74

97

593

1,273

1,694

2,967

Mark Gregory

509

56

77

573

1,215

1,525

2,739

Mark Zinkula(b)

510

784

80

768

2,142

643

2,785

2012

 

 

 

 

 

 

 

Nigel Wilson(a)

653

46

99

779

1,577

1,617

3,194

John Pollock

424

42

213

520

1,199

1,062

2,261

Mark Gregory

420

43

92

472

1,027

889

1,916

Mark Zinkula(b)

126

150

24

205

505

n/a

505

COMPONENTS OF THE SINGLE FIGURE AND HOW THE CALCULATIONS ARE WORKED

FOOTNOTE

EXPLANATION

 

Benefits – note 1

Benefits include the elements shown in the table below. For Mark Zinkula, benefits also include allowances for schooling, housing and flights and associated tax resulting from his relocation package to the UK and the vesting of shares amounting to £357,000 awarded to him on appointment to CEO LGIM and prior to him joining the Board.

 

Benefits £000s

 

 

 

 

 

 

Executive director

Car and PMI (plus relocation assistance for Mark Zinkula)

Dividends
– note i

Gain on SAYE
– note ii

Matching shares
– note iii

Total benefits shown in the table above

 

 

2013

 

 

 

 

 

 

 

Nigel Wilson

20

45

0

1

66

 

 

John Pollock

20

41

12

1

74

 

 

Mark Gregory

20

35

0

1

56

 

 

Mark Zinkula

741

43

0

0

784

 

 

2012

 

 

 

 

 

 

 

Nigel Wilson

20

25

0

1

46

 

 

John Pollock

20

21

0

1

42

 

 

Mark Gregory

20

22

0

1

43

 

 

Mark Zinkula1

141

9

0

0

150

 

 

1. For 2012, his figures represent the period 18 September 2012 to 31 December 2012 when he was appointed to the Board.

 

 

Components of Benefits and how calculated

 

Footnote

Explanation

 

 

Dividend – note i

Value of all dividends received in 2013 or 2012 in respect of outstanding AVP awards made under the Share Bonus Plan (SBP), unvested matching shares under the employee share plan (ESP) and Group performance shares under the ESP.

 

 

Gain on SAYE – note ii

Any gain on SAYE vesting in the year – nothing vested in 2012 for the directors.

 

 

Matching shares – note iii

Value of matching shares under the ESP at date of purchase and Group performance shares awarded in the year valued at the date of award (does not include the amounts that vested).

 

 

 

 

 

 

 

 

 

Pension – note 2

The value of any registered pension using the HMRC formula for assessing the annual and lifetime allowance limits (i.e. 20 times the post inflation benefit for defined benefit provisions or for the defined contribution pensions the employer defined contributions as set out below). It does not necessarily represent the economic value of the pension accrual and is not money immediately available to the person. The negative figure is not due to a change in policy or underlying benefit but due to the volatility in the assumptions we are required to use.

For the defined contribution arrangements (applicable to Mark Gregory), any balance over and above the Annual Allowance limit is paid in cash. During 2012, Nigel Wilson took fixed protection and takes a cash allowance of 15% of base salary. Following enhanced protection in 2006 and changes to the pension plans in 2008, John Pollock receives a cash allowance of 22% of base salary in lieu of pension contributions. Mark Zinkula receives a cash contribution of 15% of base salary in lieu of joining the UK pension plan. He participates in the Legal & General America 401K plan and cash savings plan. All cash allowances are subject to normal payroll deductions of income tax and National Insurance.

 

Executive director

Cash in lieu £000

Defined benefit £000

Defined contribution £000

Other / Overseas Pension

Total pension £000

 

 

2013

 

 

 

 

 

 

 

Nigel Wilson

113

0

0

0

113

 

 

John Pollock

112

-15

0

0

97

 

 

Mark Gregory

56

-3

24

0

77

 

 

Mark Zinkula1

76

0

0

4

80

 

 

2012

 

 

 

 

 

 

 

Nigel Wilson

97

0

2

0

99

 

 

John Pollock

93

120

0

0

213

 

 

Mark Gregory

37

26

29

0

92

 

 

Mark Zinkula1

19

0

1

4

24

 

 

This table has been audited by PwC.

 

 

1. Mark Zinkula contributes to a 401K plan and participates in a non contributory US cash balance plan the values of which are included in the Other Overseas Pension value figure shown in the table above.

 

 

Further pension information

 

 

Name

Age at 31 December 2013

Accrued DB pension at 31 Dec 2013 £000

Normal retirement date

Additional value of pension on early retirement

 

 

Nigel Wilson

57

0

Age 65

0

 

 

John Pollock

55

191

Age 60

0

 

 

Mark Gregory

50

39

Age 60 in DB plan and age 65 in DC plan

0

 

 

Mark Zinkula1

46

0

Age 65

0

 

 

This table has been audited by PwC

 

 

Bonus sacrifice into pension

 

Executive directors, like all managers, may elect, before its award, to sacrifice all or part of their cash bonus into pension. The opportunity for bonus sacrifice is at the discretion of the company and is reviewed each year. None of the executive directors elected for bonus sacrifice.

Annual variable pay (AVP) – note 3

The total bonus awarded in relation to performance in the year including the portion that is deferred.

For bonus awarded in relation to 2013, 37.5% of this figure was deferred into shares for three years. There are no further performance conditions but leaver terms apply.

See the AVP results table below for information on performance against targets.

PSP/LTIPs – note 4

Value of PSP or LGIM LTIP awards that vested (as of the date of vest) during the year. The vesting of awards is dependent on the performance conditions as set out below and in the Scheme interests awarded section. Note: For the PSP that vested in 2013, John Pollock exercised immediately, Nigel Wilson exercised in June 2013 and Mark Gregory during May 2013. The performance period ran from 4 May 2010 to 3 May 2013. The LGIM LTIP award was a legacy award made to Mark Zinkula prior to him joining the Board and the performance period ran from 1 January 2010 to 31 December 2012 with vesting as soon as practicable three years from date of grant in March 2010.

2013 ANNUAL VARIABLE PAY (AVP) AWARDS

The executive directors’ AVP awards in relation to performance during 2013 were measured against a basket of metrics and objectives. These were weighted between Group KPIs (50%), Divisional, Strategic or other financial KPIs (30%) and other strategic and personal objectives (20%). Threshold levels were set, below which no award would be given. Target levels were set broadly in line with those envisaged in the strategic plan for 2013 with maximum being at a level above this but still within the company’s risk appetite.

The Committee carefully assessed the performance against the Group KPIs, and the other financial and strategic targets to determine the associated AVP award. The Committee also took into consideration its view of the executive’s overall performance, regulatory compliance and approach to risk (including environmental, social or governance (ESG) risks).

The Committee reviewed a comprehensive report from the Chief Risk Officer to ascertain that the executive directors’ objectives had been fulfilled within the risk appetite of the company. In addition, the Committee received feedback from the Group Regulatory Risk and Compliance function and from the Group Legal Counsel that there were no material issues to consider around regulatory breaches, customer outcomes or litigation that would prevent payment of any AVP award or trigger any malus.

The Committee was satisfied that the AVP awards should be paid.

The table below shows the overall outcome.

AVP results

(XLS:) AVP results

2013

Achievement %

Award

 

Executive director

Group KPIs weighting 50%

Divisional / Strategic or Other Financial KPIs weighting 30%

Other Strategic / Personal objectives weighting 20%

Total AVP as % of maximum

Total AVP as % of pro-rated base salary

Maximum potential as % of base salary

Note 1 – The weighting of Mark Gregory’s objectives changed when he was appointed CFO on 1 July 2013 from 50%, 30%, 20% to 50% Group KPIs and 50% other Strategic / Personal.

Nigel Wilson

49.10%

27.00%

17.00%

93.10%

116.37%

125%

John Pollock

49.10%

28.02%

15.84%

93.00%

116.20%

125%

Mark Gregory – Note 1

49.10%

11.59%

29.02%

89.70%

112.14%

125%

Mark Zinkula

49.10%

23.53%

13.33%

86.00%

150.42%

175%

 

Operating profit, operating cash, net cash, RoE, EPS and EEV per share

PBT operating profit, net cash, APE, Gross net new business and GWP.

Customer outcomes, employee engagement, risk management

 

 

 

Actual targets have not been disclosed due to commercial sensitivity but the Highlights for 2013 section shows key Group results compared to 2012.

In recognition of base salary adjustments made during 2013 for the executive directors (excluding Nigel Wilson), AVP awards were calculated using pro-rated salaries to reflect these. Nigel Wilson had no adjustment to his base salary for 2013 and therefore his full base salary for the year was used.

AVP awarded for 2013 performance:

Of the AVP awarded in relation to 2013, a proportion was deferred for three years into shares or nil cost options under the share bonus plan (SBP), and is subject to malus and leaver terms. 37.5% of the 2013 award for each executive director was deferred for three years. In line with previous awards, dividends will be paid during the holding period.

The table below shows the actual amount of deferral and AVP for each executive director:

(XLS:) AVP awarded for 2013 performance:

Name

Total AVP awarded for 2013
£000

Amount paid in cash
£000

Amount deferred
£000

Nigel Wilson

873

546

327

John Pollock

593

371

222

Mark Gregory

573

358

215

Mark Zinkula

768

480

288

PERFORMANCE SHARE PLAN (PSP)/LGIM LTIP AWARDS

Details of how the 2010 PSP award vested

The 2010 PSP award vested in full in May 2013 as Legal and General’s TSR exceeded the 80th percentile of the FTSE 100 and the bespoke comparator group over the three year performance period. In line with policy, the Committee carefully reviewed the company’s underlying performance over the performance period. The review included considerations of partnerships entered into and maintained, cost management, capital management and risk. The Committee felt the company performance had been strong over the period and saw no reason not to allow the PSP to vest in accordance with the TSR out-turn.

The performance conditions were in line with those of the 2013 grant set out in section Scheme interests awarded.

The results are shown below:

2010 PSP vesting

(XLS:) 2010 PSP vesting – Grant date

Grant date

Performance period

Legal & General's TSR

% of award vesting against FTSE 100

% of award vesting against Bespoke comparator group

Percentage of total award vesting

This table has been audited by PwC.

4 May 2010

4 May 2010 – 3 May 2013

117.3

50%

50%

100%

(XLS:) 2010 PSP vesting

2010 PSP vesting

% of 2010 salary awarded

Face value at award £000

Share price at award £

Max number of shares

No of shares that vested

Vesting date

Share price at vest £

Value at date of vest (figure shown in single figure of remuneration) £000

This table has been audited by PwC.

Nigel Wilson

200%

1,072

0.8535

1,256,004

1,256,004

10 May 2013

1.8075

2,270

John Pollock

200%

800

0.8535

937,316

937,316

10 May 2013

1.8075

1,694

Mark Gregory

200%

720

0.8535

843,585

843,585

10 May 2013

1.8075

1,525

Mark Zinkula

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

LGIM long term incentive plan (LGIM LTIP) awards

Between March 2010 and March 2012 Mark Zinkula was granted LGIM LTIP awards as part of his remuneration as CEO LGIMA and CEO LGIM. Following his appointment as an executive director, Mark receives no further awards under this plan. Under the LGIM LTIP annual awards of notional shares in LGIM are granted to participants. The vesting of these notional shares is subject to the satisfaction of the cumulative growth in PBT condition over the three-year performance period. The value of the notional LGIM shares is delivered in cash after the end of the three-year performance period. Actual targets have not been disclosed due to commercial sensitivity. The table below shows the outcome of his 2010 award that vested in full in 2013.

(XLS:) LGIM long term incentive plan (LGIM LTIP) awards – Mark Zinkula

Grant date

% of base salary

No. of notional shares at award

Face value at award
£000

Notional share price at award
£

Value at date of vest (figure shown in single figure of remuneration) £

Notional share price at time of vest
£

This table has been audited by PwC.

15 March 2010

140%

135,798

338

2.49

643

4.73

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