EasyJet 2012 Annual Report Download - page 53

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What is in this report?
This report sets out details of the remuneration policy for
Executive Directors, describes the implementation and discloses
the amounts paid relating to the year ended 30 September 2012.
The report complies with the provisions of the Companies Act
2006 and Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008.
The report has been prepared in line with the recommendations
of the UK Corporate Governance Code 2010 and UKLA
Listing Rules.
What is the role of our Remuneration Committee?
The Remuneration Committee has responsibility for determining
remuneration for the Executive Directors and the Chairman.
The Committee also reviews the remuneration of the Company’s
most senior executives in consultation with the CEO.
The Committee takes into account the need to recruit and retain
executives and ensure that they are properly motivated to
perform in the interests of the Company and its shareholders,
while paying no more than is necessary.
Who is on our Remuneration Committee?
The members of the Committee are: Charles Gurassa
(Chairman with effect from 1 April 2012, Keith Hamill to 31 March
2012), David Bennett, Professor Rigas Doganis and Andy Martin.
The responsibilities of the Committee are set out in the Corporate
Governance section of the Annual Report on page 45.
During the year the Committee appointed and used the services
of New Bridge Street (“NBS”) (an Aon Hewitt company) as
remuneration advisers. NBS are a member of the Remuneration
Consultants Group and comply with its Code of Conduct. Aon
Hewitt also conducted employee surveys for the Company.
What activities have been undertaken by the
Committee in the year?
The past year has seen unprecedented levels of scrutiny around
executive pay. The Committee takes its responsibility to
shareholders very seriously, demonstrated through the recent
shareholder consultation process.
In addition to the remuneration review, the Committee considered
the following during the year ended 30 September 2012:
→Executive Director and senior executive remuneration policy
and changes required for the future.
→Annual bonus awards for the financial year ended
30 September 2011.
→The structure and targets of the annual bonus scheme for the
financial year ended 30 September 2012.
→Employee Save As You Earn scheme grants.
→The performance targets and award levels for grants during
the financial year ended 30 September 2012 under the Long
Term Incentive Plan.
→Testing of the performance conditions for Long Term Incentive
Plan awards granted in January 2010.
What does the Committee consider when
setting remuneration?
When setting the policy for Executive Directors’ remuneration,
the Committee takes into account the pay and employment
conditions elsewhere in the Group.
The Committee has sight of the overall approach to reward for
employees in the Group as well as appropriate external market
reference points.
Have shareholders raised any concerns? If so, how
are you going to address them?
We remain committed to shareholder dialogue and take an active
interest in voting outcomes. Where there are substantial votes
against resolutions in relation to Directors’ remuneration, we seek
to understand the reasons for any such vote, and will detail here
any actions in response to it.
Following the 2012 AGM we consulted widely with shareholders
on the definition of ROCE which is used to measure performance
under the LTIP.
Our dialogue with shareholders on this was constructive and we
agreed that going forward, the definition of ROCE will take into
consideration operating leases on our aircraft.
As indicated in the Remuneration Committee Chairman’s letter,
we also took this opportunity to review the wider remuneration
framework and consulted extensively with shareholders on
proposals, taking into account their feedback before
implementing the changes for 2012 / 13.
What did the Executive Directors earn in 2012?
We have set out the amount earned by the CEO and CFO in
respect of 2012 in the table below:
Element
CEO
£’000
CFO
£’000
Salary 665 400
Benefits 0 0
Pension or cash equivalent 47 29
Annual bonus
→Cash 637 249
→Deferred into shares 637 124
Total 1,986 802
LTIP shares earned for FY12
performance (original grant at 5 July
2010 at a share price of £3.97) 307,115 184,732
Governance
easyJet plc
Annual report and accounts 2012 51