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54 easyJet plc Annual report and accounts 2009
REPORT ON DIRECTORS’ REMUNERATION CONTINUED
The actual targets that applied to the awards of performance shares made to Executive Directors during the year under review were as follows:
Awards up to 100% of salary
Threshold
(25% vests)
Target
(50% vests)
Maximum
(100% vests)
Return on equity (year ending 30 September 2011) 7.0% 10.0% 13.0%
Awards between 100% and 175% of salary
Vesting will take place based on the satisfaction of both of the following two targets:
The award is subject to scale-back to the extent that a range of performance targets relating to the year ended 30 September 2009 are not met.
Achievement of these targets, at 88.35%, was equal to the percentage of bonus payable, and so the award has been scaled back by 11.65%.
ROE for the year ending 30 September 2011 must be at least 10% in order for the remaining award to vest.
No matching shares were granted in the year under review.
To facilitate a period of continuity and the retention of Andrew Harrison’s services to the Company, in May 2009 it was agreed that Andrew Harrison would
be treated as a ‘good leaver’ in respect of the LTIP award (performance and matching shares) granted in December 2007 upon his departure from easyJet,
provided his service is to continue to 31 March 2010. The maximum number of performance and matching shares covered by this change is 193,325.
Any vesting would be subject to pro-rating for both performance and service. Based on performance for the year ended 30 September 2009, none of
these shares would vest.
With regard to future long-term incentive plan targets, it was agreed with investors during consultation that easyJet would revert to using ROE as the
sole performance metric as soon as it was felt practicable to do so (e.g. once fuel price volatility had returned to more ‘normal’ levels). As a result, the
performance targets that are to apply to awards made in the current year will be based on challenging ROE targets alone. These targets are considered
to take into full account the current economic environment.
Chief Executive Officer Recruitment Award (E)
50% of the award is based on the average annual growth in EPS. No shares vest if EPS growth is less than RPI plus 5%, 30% vest where EPS growth is RPI
plus 5% and 100% vest where EPS growth is RPI plus 20%. Straight-line vesting occurs between these points.
Potential vesting of outstanding awards
The table below shows how vesting of outstanding share awards plans would take place if the performance was based on that for the year under review.
Grant date Actual basis year Vesting
December 2006 30 September 2009 0%
December 2007 30 September 2010 0%
February 2008 30 September 2010 0%
January 2009 30 September 2011 0%
On behalf of the Board
Keith Hamill
Remuneration Committee Chairman