Aer Lingus 2011 Annual Report Download - page 51

REPORT OF THE REMUNERATION COMMITTEE ON DIRECTORS’ REMUNERATION Aer Lingus Group Plc
Annual Report 2011
As announced on 9 September 2009, Mr Christoph Mueller was
granted share options in respect of 1,500,000 shares in the Company,
with effect from the 8 September 2009. The share options will vest
and become exercisable provided the closing price of the Company’s
shares remain above certain fixed prices (detailed below) for at least
25 of the 40 days prior to certain specific dates. Further details
relating to the options are set out in Table 2.3 on page 52. The
Remuneration Committee selected performance criteria which it
believes are sufficiently stretching to reasonably incentivise Mr Mueller
to deliver value for Aer Lingus shareholders.
Both the conditional share award and the share option grant were
disclosed in the Remuneration Reports contained in the 2009 and
2010 annual reports, with each such Remuneration Report being
approved by shareholders at annual general meeting.
Service Contracts
The Company has a service contract or letter of appointment with all
Board members.
Executive Directors
All service contracts with executive directors are on similar terms and
have notice periods of 12 months or less and comply with the
recommendations in regard to payments on termination in paragraph
D.1.4 and D.1.5 of the 2010 UK Corporate Governance Code and
paragraph 3.5 of the EU Commission 2009 Guidance on
Remuneration.
Non-executive Directors
The terms upon which each of the non-executive directors have been
appointed are set out in letters of appointment which reflect the form
recommended by the 2010 UK Corporate Governance Code. It is the
Company’s policy that each non-executive director is appointed for a
fixed period not exceeding three years (with the potential for a second
three year term), subject to satisfactory performance and re-election at
any Annual General Meeting where this is required. Recommendation
to shareholders for the election of Non-Executive Directors beyond six
years will only be made following review by the Board. None of the
non-executive directors is a party to any service contract with the
Company that provides for benefits upon termination.
Non-Executive Directors Fees
Non-executive directors are remunerated by way of directors’ fees.
Non-executive directors’ fees are not pensionable and are not
performance related. They are not eligible to participate in any Aer
Lingus bonus scheme or other share related incentive schemes.
Throughout the year ended 31 December 2011, non-executive
directors’ fees were set at ¤32,400 per annum, the Chairman’s fees
were set at ¤126,000 per annum and an additional fee of ¤7,200 per
annum was payable to the Chairman of the Audit Committee. The
aggregate of non-executive director fees paid in 2011 was lower than
that paid in 2010.
Directors’ Concessionary Travel
Directors and dependent members of their families can avail
themselves of concessionary travel on Aer Lingus services. The
concession applies to their travel on vacation and is on a space
available basis. It is not available for their own individual business
purposes. The Company has obtained the approval of the Office of the
Revenue Commissioners for the level of reimbursement charge to be
applied to such concession travel to defray the marginal cost to the
Company of the seat.
Directors’ remuneration
Disclosures regarding directors’ remuneration have been drawn up on
an individual director basis in accordance with the requirements of
both the 2010 UK Corporate Governance Code and the Irish Stock
Exchange.
Directors’ pension benefits
Information regarding the pension benefits of the directors is outlined
in Table 2.1 on page 50. The Company is required to make a
contribution at a rate of 25% of basic salary to pension arrangements
as are agreed with each of Mr Christoph Mueller and Mr Andrew
Macfarlane.
Directors’ shareholdings
The interests of the directors in office at 31 December 2011 in the
shares of the Group are outlined in Table 2.2 on page 51.
49
Report of the Remuneration Committee on Directors’ Remuneration (continued)