BT 1998 Annual Report Download - page 35

R E P O R T O N D I R E C T O R S ’ R E M U N E R AT I O
will not exceed the level possible under the previous
LTRP arrangement. From and including this year, the
optional personal investment and the associated
matching grant under the plan will no longer be
made available.
To improve the alignment of performance with BT’s
business cycle, the performance period will now run
from 1 April to 31 March in line with the company’s
f i n a n c i a l y e a r, a n d n o tf ro m 1 A u g u s ta s i n p re v i o u sy e a r s .
However, awards will continue to vest on 1 August.
BT Share Option Scheme
The BT Share Option Scheme for senior executives was
not renewed after its expiry in January 1995. The last
options were granted in December 1994.
Details of options exercised during the year ended
31 March 1998 and unexercised options are shown
on page 39.
•Pensions
For executive directors and other senior executives the
policy is to provide pension benefits of one thirtieth of
final salary for each year of service with a two-thirds
surviving spouse’s pension. The executive directors and
certain other senior executives have undertakings of
pension benefits of two-thirds of final salary at normal
retirement age with a two-thirds surviving spouse’s
pension. On death in service a lump sum equal to four
times annual salary is payable together with a surviving
spouse’s pension of two-thirds of the director’s prospective
pension. Pensions are based on salary alone – bonuses,
other benefits and long-term incentives are excluded.
The primary means of providing pensions for the executive
directors and their dependants is through the BT Pension
Scheme (BTPS). All the executive directors, except Sir
Peter Bonfield, are members of the BTPS. For members of
the BTPS the company contributed, on average, 9.5% of
salary to the scheme and the individual contributed 6% of
s a l a ry in the year ended 31 M a rch 1998.
Where an individual will not achieve the target level of
pension benefit at normal retirement age because of the
earnings cap, the company may make up the shortfall by
purchasing additional service in the BTPS and/or through
non-approved, unfunded arrangements.
On his retirement as full-time chairman on 31 July 1998
Sir Iain Vallance will be entitled to receive retirement
benefits equivalent to two-thirds of his final salary. His
surviving spouse’s pension is two-thirds of his pension.
Sir Peter Bonfield’s pension arrangements are
unapproved and unfunded and provide for a pension of
two-thirds of his final salary at age 60, inclusive of any
retained benefits from his previous employment, and a
surviving spouse’s pension of two-thirds of his pension.
He is entitled to a pension of 52% of salary at age 55.
If retirement occurs between age 55 and 60, the
percentage of salary to calculate the pension will
Increase in accrued Total accrued pension
pension during year or at year end or at Transfer value of
to date of retirement date of retirement, increase in accrued
in year (a) if earlier (b) benefit (c)
)))%!!!!!))%!!!!!!!0051111!!!0051111!!!0051111
1998 1997 1998 1997 1998 1997
£000 £000 £000 £000 £000 £000
)))%!!!!!))%!!!!!!!0051111!!!0051111!!!0051111
Sir Iain Vallance 99332 312 159 98
Sir Peter Bonfield 18 18 41 22 276 184
R P Brace (d) 14 17 98 81 173 129
A W Rudge 10 24 193 179 92 297
0005111110051111!!!0051111!!!0051111!!!0051111
(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 at normal retirement age based on service to the
end of the year or date of retirement if earlier.
(c) The transfer value has been calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note GN11 and
excludes directors’ contributions. The transfer value represents a liability of the company rather than any remuneration due to the
individual and cannot be meaningfully aggregated with annual remuneration as it is not money the individual is entitled to receive.
(d) Comparative figures have been restated on a comparable basis.