BT 1997 Annual Report Download - page 29

REPORT OF THE BOARD COMMITTEE ON EXECUTIVE REMUNERATION
29
The table below shows the increase in the accrued
benefits to which each director has become entitled
during the year and the transfer value of the increase
in accrued benefit:
Increase in Total
accrued accrued
annual annual Transfer
pension in pension value of
year ended as at increase in
31 March 31 March accrued
1997(a) 1997(b) benefit (c)
£000 £000 £000
Sir Iain Vallance 9 312 98
Sir Peter Bonfield 18 22 184
AW Rudge 24 179 297
RP Brace 15 64 107
(a) The increase in accrued pension during the year
excludes any increase for inflation.
(b) The pension entitlement is that which would be paid
annually on retirement based on service to the end of the
year.
(c) The transfer value has been calculated on the basis of
actuarial advice in accordance with Actuarial Guidance
Note GN11 and excludes directors’ contributions.
Members of the BTPS have the option to pay additional
voluntary contributions; neither the contributions, if any,
nor any resulting benefıts are included in the above table.
3Other benefits
These include car and driver, personal
telecommunications facilities, medical cover
for the director and immediate family and
financial counselling.
Service agreements
All the executive directors have service agreements which
contain provisions for the removal of a director through
poor performance.
Sir Iain Vallance entered into a new contract during the
year which is subject to twelve months’ notice on either
side. Sir Iain has confirmed his intention to serve as
Co-Chairman of Concert plc for at least three years from
the completion of the proposed merger with MCI. During
that period, a two-thirds majority decision of the Concert
plc Board will be required for the company to terminate
his contract.
The initial term of Sir Peter Bonfield’s contract has been
extended to 31 December 1999. The contract can be
terminated by either party giving twelve months’ notice
expiring after 31 December 1999, the date on which MCI’s
most senior executives’ contracts also expire. Dr Alan
Rudge’s contract expires on 31 October 1997. Robert
Brace’s service agreement can be terminated at any
time after 31 August 1997 on twelve months’ notice by
either side.
Gerald Taylor, who joined the Board on 4 November 1996,
Keith Oates and Bert Roberts have contracts of
appointment as non-executive directors which expire on
3 November 1999, 31 May 1997 and 13 October 1997,
respectively. The Board has agreed to continue Keith
Oates’ appointment from 1 June 1997 subject to a one-year
period of notice on either side.
Outside appointments
The Committee believes there are significant benefits to
both the company and the individual from executive
directors accepting non-executive directorships of
companies outside the BT group. The Committee will
normally consider approving up to two external
appointments for which the director may retain the fees.
Non-executive directors’ remuneration
Fees for non-executive directors are determined by the
Board as a whole, based on the recommendations of the
Board Committee on Non-Executive Remuneration whose
members are currently the Chairman and the Chief
Executive.
During the year, the Board agreed a revised fee structure
for non-executive directors with effect from 1 January
1997. The basic fee for non-executive directors, which
includes membership of one committee, is now £25,000
per year (1996 equivalent – £22,500). Additional fees for
membership of most other Board committees range from
£3,000 to £5,000 per year. Committee chairmen receive an
additional fee of £2,000 for each committee they chair. Sir
Colin Marshall receives an inclusive fee of £65,000 per
year as Deputy Chairman.