EasyJet 2010 Annual Report Download - page 45

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Overview Business review Governance Accounts Other information
easyJet plc
Annual report and accounts 2010
43
easyJet’s current remuneration policies are summarised below:
Element Purpose Policy Delivery
Basic salary – Reflect the value of the
individual and their role
–Reflect skills and experience
– Reviewed annually, effective
1 October
–Agreed when results for the
previous year are finalised
–Benchmarked against similar
sized companies and industry
comparators
–Targeted at or around median
–Considers individual
contribution
– Cash
–Paid monthly
–Pensionable
Annual bonus – Incentivise year on year
delivery of performance linked
to easyJet’s strategic goals
– Major measure is profit before
tax aligned to
long-term targets
–Other measures based on:
– Customer satisfaction
– Cost
– Operational excellence
– Paid as cash
–Not pensionable
–May defer up to half
of bonus into LTIP
Long Term Incentive Plan – Aligned to business plan
–Incentivise long-term growth
in return on equity (ROE)
– Vests after three years
–Subject to stretching
ROE targets
–Subject to 175% of salary
shareholding requirement
– Annual grant of
performance shares
–Opportunity to defer bonus
and obtain future matching
share awards
Pension – Provide modest
retirement benefits
–Opportunity for Executive
to contribute to their own
retirement plan
– Defined contribution
–HMRC approved salary
sacrifice arrangement
– Monthly employer
contribution of 7%
of basic salary
–Non-contributory
– Salary sacrifice for
employee contribution
The balance between fixed and variable pay is shown in the charts below. This demonstrates that a significant proportion of remuneration
is linked to performance, particularly at maximum performance levels.
On target
Maximum
Chief Executive
■
Benefits
0% 50% 100%
■
Basic
■
Bonus
■
Max
■
LTIP
On target
Maximum
Chief Financial Officer
■
Benefits
0% 50% 100%
■
Basic
■
Bonus
■
Max
■
LTIP