EasyJet 2011 Annual Report Download - page 56

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Report on Directors’ remuneration
Continued
easyJet’s current remuneration policies are summarised below:
Element Purpose Policy Delivery
Salary –Reflect the value of the
individual and their role
–Reflect skills, experience over
time
–Provide an appropriate level
of basic fixed income
avoiding excessive risk
arising from over reliance
on variable income
–Reviewed annually, effective
1 October
–Agreed when results for the
previous year have been
finalised
–Takes account against
companies with similar
characteristics and sector
comparators
–Targeted at or around
median
–Cash
–Paid monthly
–Pensionable
Bonus –Incentivise annual delivery of
financial and operational
goals
–Relatively high potential
rewards for achieving
demanding targets
–Major measure is profit
before tax
–Performance compared
with budget
–Operational measures based
on:
–Customer satisfaction
–Cost
–On time performance
–Paid as cash
–Not pensionable
–May defer up to half of
bonus into LTIP
Long Term Incentive
Plan
–Aligned to main strategic
objective
–Based on return on capital
employed (ROCE)
–Performance measured
over three years
–Vests after three years
–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
Other benefits –Executives can pay for
voluntary benefits, where
Company purchasing power
provides an attractive
advantage to employees
–Company cars or cash
equivalents not provided
–As acquired
The balance between fixed and variable pay is shown in the charts below. A significant proportion of
remuneration is linked to performance, particularly at maximum performance levels.
Maximum
On target
Chief Executive
%
Basic Bonus LTIP Benefits
50% 100%0%
Maximum
On target
Chief Financial Officer
%
Basic Bonus LTIP Benefits
50% 100%0%
54
easyJet plc
Annual report
and accounts 2011