EasyJet 2014 Annual Report Download - page 78

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76 easyJet plc Annual report and accounts 2014
What discretion is retained by the Committee
in operating its incentive plans?
The Committee will operate the annual bonus plan,
LTIP and Deferred Annual Bonus Plan according to their
respective rules (or relevant documents) and in accordance
with the Listing Rules where relevant. The Committee
retains discretion, consistent with market practice, in a
number of regards to the operation and administration
of these plans. These include, but are not limited to,
the following in relation to the LTIP and Deferred Annual
Bonus Plan:
• the participants;
• the timing of grant of an award;
• the size of an award;
• the determination of vesting;
• discretion required when dealing with a change of
control or restructuring of the Group;
• determination of the treatment of leavers based on the
rules of the plan and the appropriate treatment chosen;
• adjustments required in certain circumstances
(e.g. rights issues, corporate restructuring events
and special dividends); and
• the annual review of performance measures and
weighting, and targets for the LTIP from year to year.
In relation to the annual bonus plan, the Committee
retains discretion over:
• the participants;
• the timing of grant of a payment;
• the determination of the bonus payment;
• dealing with a change of control;
• determination of the treatment of leavers based on
the rules of the plan and the appropriate treatment
chosen; and
• the annual review of performance measures and
weighting, and targets for the annual bonus plan
from year to year.
In relation to both the Company’s LTIP and annual bonus
plan, the Committee retains the ability to adjust the
targets and/or set different measures if events occur
which cause it to determine that the conditions are no
longer appropriate (e.g. material acquisition and/or
divestment of a Group business), and the amendment is
required so that the conditions achieve their original
purpose and are not materially less difficult to satisfy.
Directors’ remuneration report continued
Element, purpose
and link to strategy Operation (including maximum levels where applicable)
Framework used to
assess performance
and provisions for the
recovery of sums paid
LTIP Performance
Share Award
Awards will be delivered
under the 2005 LTIP
in the year ending
30 September 2015 and
under a replacement
LTIP for the year ending
30 September 2016.
To incentivise and
recognise execution
of the business strategy
over the longer term.
Rewards strong financial
performance and
sustained increase
in shareholder value.
Each year Performance Shares may be granted subject to the achievement
of performance targets. Awards normally vest over a three year period.
Policy for the financial year ending 30 September 2015
The maximum opportunity contained within the plan rules for Performance
Share Awards is 200% of salary.
The maximum face value of annual awards will be 200% of salary for
the Chief Executive and 150% of salary for other Executive Directors.
Policy for the financial year ending 30 September 2016
The maximum opportunity contained within the plan rules for Performance
Share Awards is 250% of salary (with awards up to 300% of salary eligible
to be made in exceptional circumstances, such as recruitment).
The normal maximum face value of annual awards will be 250% of salary
for the Chief Executive and 200% of salary for other Executive Directors.
For clarity, there will be no matching share awards for the financial year
ending 30 September 2016.
A dividend equivalent provision exists which allows the Committee to pay
dividends on vested shares (in cash or shares) at the time of vesting and
may assume the reinvestment of dividends. A holding period will apply to
share awards granted in the financial year ending 30 September 2015 and
beyond. The holding period will require the Executive Directors to retain
the after-tax value of shares for 24 months from the vesting date.
The performance
targets are as
described on
page 75 for
the Matching
Share Award.
The recovery
(clawback)
and withholding
(malus) provisions
are as described
on page 75
in relation
to Matching
Share Awards.
Share ownership
To ensure alignment
between the interests
of Executive Directors
and shareholders.
175% of salary (rising to 200% from financial year ending 30 September
2016) holding required for the Chief Executive and 175% of salary for the
Chief Financial Officer which is expected to be reached within five years
of appointment.
Executive Directors are required to retain half of the post-tax shares vesting
under the LTIP until the guideline is met.
Not applicable.