Scheme interests awarded during the financial year (audited)

The following table sets out details of awards made under the 2014 PSP in 2014.

 

Type of award

Basis of award (% of salary and face value)

% of award vesting for threshold performance

% of award vesting for maximum performance

Performance/holding period

1.

The number of shares awarded is calculated based on the average share price for the five days preceding the grant which was £2.3342

Nigel Wilson

Nil-cost options

250% of salary
£2,050,0001

15%

100%

1 January 2014 to 31 December 2016. Awards are also subject to a holding period, such that awards are released in equal tranches in years 3, 4 and 5 from the start of the performance period.

John Pollock

Nil-cost options

250% of salary
£1,400,0001

15%

100%

Mark Gregory

Nil-cost options

250% of salary
£1,400,0001

15%

100%

Mark Zinkula

Nil-cost options

250% of salary
£1,400,0001

15%

100%

Awards were also made during the year under the Share Bonus Plan in respect of performance for 2013, in line with our policy 37.5% of all 2013 AVP awards were deferred into shares for three years, subject to malus provisions. The amounts deferred in respect of the 2014 bonus are set out in the deferral policy section.

Performance conditions for PSP awards granted in 2014

Financial performance condition (50% of the 2014 award)

50% of the award will vest based on performance against the following matrix of earnings per share and dividends per share growth, subject to achieving a return on equity underpin whereby return on equity must be at least 12% over the performance period.

 

 

Dividends per share growth (% p.a.)

 

 

<5

5

6

7

8

9

10

11

12

13

14

Earnings per share growth (% p.a.)

<5

0

0

0

0

0

0

0

0

0

0

0

5

0

15

25

35

45

55

65

75

85

95

100

6

0

25

35

45

55

65

75

85

95

100

 

7

0

35

45

55

65

75

85

95

100

 

 

8

0

45

55

65

75

85

95

100

 

 

 

9

0

55

65

75

85

95

100

 

 

 

 

10

0

65

75

85

95

100

 

 

 

 

 

11

0

75

85

95

100

 

 

 

 

 

 

12

0

85

95

100

 

 

 

 

 

 

 

13

0

95

100

 

 

 

 

 

 

 

 

14

0

100

 

 

 

 

 

 

 

 

 

The vesting levels between stated points on the matrix will be calculated on a straight line basis.

TSR performance condition (50% of the 2014 award)

25% of the award will vest based on Legal & General’s TSR performance relative to the FTSE 100.

The remaining 25% of the award will vest based on Legal & General’s TSR performance against a bespoke group of insurers (comprising the insurance constituents in the FTSEurofirst 300 plus any FTSE 350 Life Insurance companies not in the FTSEurofirst 300 and five US firms Metlife, Prudential Financial, Ameriprise Financial, Principal Financial and Lincoln National).

The vesting schedule of the TSR performance conditions is as follows:

 

% of award that vests

Below median

0%

Median (threshold vesting)

15%

Between median and the 80th percentile

15% – 100%

80th percentile of above

100%

At the end of the three-year performance period the Committee will critically assess whether the formulaic vesting outcome produced by the matrix is justified. To do this the Committee will look at a number of factors including: whether the result is reflective of underlying performance and has been achieved within the company’s agreed risk appetite; the quality of earnings and the nature of any changes in leverage; key assumptions; dividend cover and behaviours etc. If such considerations mean that the formulaic outcome of the vesting schedule is not felt to be justified, then the Committee can exercise downwards discretion.