EasyJet 2014 Annual Report Download - page 80

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78 easyJet plc Annual report and accounts 2014
The scenarios do not include any share price growth
or dividend assumptions.
Below
threshold
£734,000
£1,984,000
£456,000
£1,074,000
£2,032,000
£4,142,000
In line with
expectations
Exceeds
target
Exceeds
target
Below
threshold
In line with
expectations
Fixed pay
Annual Bonus
LTIP (Performance and Matching Shares)
100%
37%
18%
100%
43%
23%
34% 23%
36% 41%
34% 29%
49%33%
Chief Financial Officer
Chief Executive
It should be noted that since the analysis above shows
what could be earned by the Executive Directors based
on the 2015 financial year remuneration policy described
above (ignoring the potential impact of share price
growth), the numbers will be different to the values
included in the table on page 82 detailing what was
actually earned by the Executive Directors in relation to
the financial year ended 30 September 2014, since these
values are based on the actual levels of performance
achieved to 30 September 2014 and include the impact
of share price growth in relation to share awards.
For completeness, the chart below illustrates the revised
policy that will operate in the financial year ending
30 September 2016 (based on salaries as at 1 October 2014).
What are the Executive Directors’ terms of employment?
Under the Executive Directors’ service contracts
both parties are required to give 12 months’ notice
of termination of employment.
For Executive Directors, if notice is served by either party,
the Executive Director can continue to receive basic salary,
benefits and pension for the duration of their notice period
during which time the Company may require the individual
to continue to fulfil their current duties or may assign
a period of garden leave.
The policy for a new hire would be based on similar
terms and will also include the ability for easyJet to make
a payment in lieu of notice of up to 12 monthly instalments
which would be reduced if alternative employment was
taken up.
Under the current Chief Executive’s contract, the Company,
by mutual consent, may elect to make a payment in lieu
of notice equivalent in value to 12 months’ basic salary,
payable in monthly instalments which would be subject to
mitigation if alternative employment is taken up during this
time. Alternatively, this payment may be paid as a lump
sum. Bonus payments may be made, payable in cash, on
a pro-rata basis, but only for the period of time served from
the start of the financial year to the date of termination
and not for any period in lieu of notice. Any bonus paid
would be subject to the normal bonus targets, tested at
the end of the financial year. The current Chief Executive
has a contractual entitlement to such a pro-rated payment
under her service contract, other than in the cases of
resignation or termination resulting from gross misconduct.
These provisions do not apply to the Chief Financial Officer.
In relation to a termination of employment, the Committee
may make any statutory entitlements or payments to settle
or compromise claims in connection with a termination
of any existing or future Executive Director as necessary.
The Committee also retains the discretion to reimburse
reasonable legal expenses incurred in relation to a
termination of employment and to meet any outplacement
costs if deemed necessary.
The Executive Directors’ service contracts and the Non-
Executive Directors’ letters of appointment are available
for inspection by shareholders at the Company’s
registered office.
What is our policy when an Executive Director
leaves or there is a takeover?
The rules of both schemes (LTIP and Deferred Annual
Bonus Plan) set out what happens to awards if a
participant ceases to be an employee or Director of
easyJet before the end of the vesting period. Generally,
any outstanding share awards will lapse on such
cessation, except in certain circumstances.
If an Executive Director ceases to be an employee or
Director of easyJet as a result of death, injury, retirement,
the sale of the business or company that employs the
individual, or any other reason at the discretion of the
Committee, then they will be treated as a ‘good leaver’
Directors’ remuneration report continued
Below
threshold
£734,000
£1,984,000
£456,000
£1,104,000
£2,032,000
£3,801,000
In line with
expectations
Exceeds
target
Exceeds
target
Below
threshold
In line with
expectations
Fixed pay
Annual Bonus
LTIP (Performance and Matching Shares)
100%
37%
19%
100%
41%
23%
33% 26%
36% 41%
34% 29%
45%36%
Chief Executive
Chief Financial Officer