EasyJet 2012 Annual Report Download - page 56

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Governance
Directors’ remuneration report
continued
Element Purpose and link to strategy Operation for 2013 Performance metrics
Changes effective for
2012 / 13 financial year and
associated rationale
Matching
share
awards
To incentivise and
recognise execution of
the business strategy over
the longer term
Rewards sustained profit
growth and sustained
increase in shareholder
value
LTIP award subject to
clawback (reduction)
in the event of a
misstatement of results
Only the portion of bonus that
is not subject to compulsory
deferral may be applied to
matching shares
Each year, Executive Directors
can voluntarily defer 50% of
bonus for CEO and 33% of
bonus for CFO into shares for
three years
The amount they voluntarily
defer may be subject to a
1:1 match dependent on the
delivery of performance goals
over three years
Performance against key
goals is measured over
three years
50% of award based on
three year average ROCE
50% of award based on
TSR relative to UK listed
companies ranked in the
positions FTSE 51–150
In order for the TSR portion
of the award to be earned,
the Company’s absolute
TSR performance must
also be positive over the
performance period
Following the introduction
of compulsory deferral, the
matching element is only
available on the additional
portion of the bonus that
Executive Directors choose
to defer
Following extensive
shareholder consultation,
there has been a change
to the definition of ROCE
used to assess
performance under this
Plan. It will now include the
cost of leases of our planes
Introduction of relative TSR
performance measure
Introduction of clawback
Long term
incentive
plan
To incentivise and
recognise execution of
the business strategy over
the longer term
Rewards substantially
increased and sustained
Return on Capital
Employed and sustained
increase in shareholder
value
LTIP award subject to
clawback (reduction)
in the event of a
misstatement of results
Each year performance shares are
allocated which can be earned
subject to the delivery of
performance goals over a three
year performance period
Maximum opportunity of 200%
of salary for CEO and 150% of
salary for CFO
Performance against key
goals is measured over
three years
50% of award based on
three year average ROCE
50% of award based on
TSR relative to UK listed
companies ranked in the
positions FTSE 51–150
In order for the TSR portion
of the award to be earned,
the Company’s absolute
TSR performance must
also be positive over the
performance period
Reduction in CFO’s
opportunity from 200%
of salary to 150% of salary
Following extensive
shareholder consultation,
there has been a change
to the definition of ROCE
used to assess
performance under this
Plan
It will now include the cost
of leases of our planes
Introduction of relative TSR
performance measure
Introduction of clawback
Share
ownership
To ensure alignment
between executives
and shareholders
175% of salary holding required for
Executive Directors expected to
be reached within five years of
appointment
Executives are required to retain
half of the shares vesting under
the LTIP until the guideline is met
Executive Directors may also
participate in the Share Incentive
Plan and Sharesave Plan on the
same terms as other eligible staff
50% of shares vesting
after tax are required to be
retained until the guideline
is met (previously 100%)
easyJet plc
Annual report and accounts 2012
54