Performance share plan (PSP).

Performance share plan (PSP).



Note: Further details on the PSP metrics and decisions for 2014, subject to shareholder approval, can be found in the annual report on remuneration.


Awards under the PSP are reflective of the Committee’s desire that the remuneration of executives should be weighted towards the delivery of sustainable returns to shareholders over the longer term.

In addition to deferred awards under the AVP, awards under the PSP enhance alignment with shareholders by focusing executives on the longer-term performance of the business. business.


Award of shares or options which are subject to a performance period of normally no less than three years. Performance is measured post the Group results announcement after the end of the three year performance period. Subject to performance, awards are normally released in three equal tranches following the third, fourth and fifth anniversaries of the start of the performance period.

The Committee retains discretion to lengthen the performance period and holding period for future awards. The Remuneration Committee may also amend the final level of vesting dependent on the underlying performance of the Group. The Committee may only exercise downwards discretion and may not increase the level of vesting. The parameters which the Committee uses in making this assessment will include, but are not limited to, market share, partnerships entered into and maintained, cost constraint, capital management, risk and shareholder perception.

Financial performance targets are set annually by the Committee to ensure they are relevant and sufficiently stretching.

PSP awards are normally awarded in the form of nil cost options or conditional shares or phantom equivalent where appropriate. However they may be awarded in other forms if the Committee considers it appropriate.

Dividends or dividend equivalents accrue in the period following the end of the performance period until vesting and release. These will normally be paid in shares on a reinvested basis.

PSP awards are subject to malus and clawback provisions (further details set out later in this report in the Notes to the policy table section).

The Committee may adjust and amend the awards in accordance with the PSP rules, for example where there is a variation in the share capital or to settle the awards in cash in the event that this is warranted.


The maximum award opportunity under the PSP is 300% of salary.

The Remuneration Committee’s current intention is that the normal annual award opportunity will be 250% of base salary for all executive directors.

15% of the award normally vests for threshold performance increasing to 100% of the award for maximum performance.


Performance measures for the PSP are selected by the Remuneration Committee to be aligned with the Group’s long-term strategic priority of delivering sustainable returns to shareholders.

The Committee therefore intends to grant awards based on an appropriate mix of earnings, capital efficiency and shareholder return measures.

The split between these measures, for each grant, is set annually by the Committee.

For awards to be made in 2014, the performance measures will be as follows:

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