EasyJet 2010 Annual Report Download - page 47

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Overview Business review Governance Accounts Other information
easyJet plc
Annual report and accounts 2010
45
LTIP awards to be granted in 2011
The policy for future LTIP awards and targets will be determined in line with the outcome of reviews being undertaken by management
and the Board which are described in the Chief Executive’s statement. An announcement relating to grants and targets will be made as
soon as is practical. Any significant changes in policy will be discussed with shareholder representative bodies and major shareholders.
A full summary of the performance targets applying to all subsisting LTIP awards are set out on pages 51 and 52.
All-employee share plan participation
easyJet encourages share ownership throughout the Company by the use of a Share Incentive Plan and a Sharesave Plan. Take up of the
schemes remains very positive with over 80% of eligible staff now participating in one or more of the plans. Executive Directors may also
participate in these plans. They are summarised in the Corporate responsibility section on page 30.
Previous share awards
Executive Share Option Scheme
The LTIP replaced the existing Approved and Unapproved Executive Share Option Schemes (the “ESOS”) as the primary long term
incentive arrangement for the Executive Directors and other senior employees although the ESOS was retained for flexibility, but lapsed
on 30 October 2010. There were no grants during the year.
Shareholding guideline
Executive Directors are required to build up a shareholding equivalent to 175% of basic salary. There is no specific timeframe within which
the shares must be acquired. However, executives must retain all the shares acquired on the vesting of LTIP awards (net of tax) until the
required holding is attained. Any shares already held by the executive will count towards the guideline, as will shares bought by participants
as “Investment Shares” under the Matching Shares element of the LTIP, together with any shares held on an executive’s behalf through
participation in the Company’s all-employee share plans. These shares are owned absolutely by the executive. Any unvested performance
shares or matching shares granted under the LTIP will not count since they are subject to future performance.
For senior executives who report to the Executive Management Team and receive LTIP awards, a 50% share ownership guideline
will apply.
Pension contributions
easyJet makes a contribution for Executive Directors to a defined contribution pension scheme of 7% of basic salary. While individuals
are not obliged to make a contribution, easyJet operates a pension salary sacrifice arrangement where individuals can exchange their salary
for Company paid pension contributions. Where individuals exchange salary this reduces easyJet’s National Insurance contributions. easyJet
credits half of this saving to the individual’s pension (currently 6.4% of the amount exchanged). Executive Directors cannot contribute to a
pension during their first three months of employment. Where an Executive Director has reached the lifetime pension limit, a cash
alternative may be paid with the agreement of the Committee.