EasyJet 2014 Annual Report Download - page 81

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Governance
under the plan rules. Under the Deferred Annual Bonus
Plan, the shares for a good leaver will normally vest in full
on the normal vesting date (or on cessation of employment
in the case of death) and if the award is in the form of
an option, there is a 12 month window in which the award
can be exercised. Awards structured as options which have
vested prior to cessation can be exercised within 12 months
of cessation of office or employment.
Under the LTIP, a good leaver’s unvested awards will vest
(either on the normal vesting date or the relevant date
of cessation, as determined by the Committee) subject
to achievement of any relevant performance conditions,
with a pro-rata reduction to reflect the proportion of the
vesting period served. The Committee has the discretion
to disapply time pro-rating if it considers it appropriate
to do so. A good leaver may exercise their vested awards
structured as options for a period of 12 months following
the individual’s cessation of office or employment, whereas
unvested awards may be exercised within 12 months
of vesting.
In determining whether an Executive Director should be
treated as a good leaver, and the extent to which their
award may vest, the Committee will take into account the
circumstances of an individual’s departure. In the event of
a takeover or winding-up of easyJet plc (which is not
part of an internal reorganisation of the easyJet Group in
circumstances where equivalent replacement awards are
not granted) all awards will vest subject to, in the case of
LTIP awards, the achievement of any relevant performance
conditions with a pro-rata reduction to reflect the
proportion of the vesting period served. The Committee
has discretion to disapply time pro-rating if it considers
it appropriate to do so. In the event of a takeover, the
Committee may determine, with the agreement of the
acquiring company, that awards will be exchanged for
equivalent awards in another company.
What is the policy on Executive Directors holding
external appointments?
Executive Directors are permitted to accept one
appointment on an external board or committee so long
as this is not thought to interfere with the business of the
Group. Any fees received in respect of these appointments
are retained directly by the relevant Executive Director.
What would the remuneration policy be if a new
Director was appointed?
Base salary levels will be set in accordance with easyJet’s
remuneration policy, taking into account the experience
and calibre of the individual (e.g. typically up to market
median levels but salaries above or below this level may
be set dependent upon the level of the individual). Where
it is appropriate to offer a lower salary initially, a series of
increases to achieve the desired salary positioning may
be given over the following few years subject to individual
performance. Benefits will be provided in line with those
offered to other employees, with relocation expenses/
arrangements provided if necessary. easyJet may offer a
cash amount on recruitment, payment of which may be
staggered, to reflect the value of benefits a new recruit
may have received from a former employer.
Should it be appropriate to recruit a Director from overseas,
flexibility is retained to provide benefits that take account of
those typically provided in their country of residence (e.g. it
may be appropriate to provide benefits that are tailored to
the unique circumstances of such an appointment).
The maximum level of variable pay that may be offered on
an ongoing basis and the structure of remuneration will be
in accordance with the approved policy detailed above (i.e.
at an aggregate maximum of up to 500% of salary in the
financial year ending 30 September 2015 (200% annual
bonus, 200% Performance Shares and 100% Matching
Shares under the LTIP) and 450% of salary in the financial
year ending 30 September 2016 onwards (200% annual
bonus and 250% Performance Shares under the LTIP), taking
into account annual and long-term variable pay. This limit
does not include the value of any buyout arrangements.
Different performance measures may be set initially for
the annual bonus, taking into account the responsibilities
of the individual, and the point in the financial year that
they joined. Any incentive offered above this limit would be
contingent on the Company receiving shareholder approval
for an amendment to its approved policy at its next
General Meeting.
The above policy applies to both an internal promotion
to the Board or an external hire.
In the case of an external hire, if it is necessary to buy
out incentive pay or benefit arrangements (which would
be forfeited on leaving the previous employer), this
would be provided for taking into account the form
(cash or shares), timing and expected value (i.e. likelihood
of meeting any existing performance criteria) of the
remuneration being forfeited. Replacement share awards,
if used, will be granted using easyJet’s share plans to the
extent possible, although awards may also be granted
outside of these schemes if necessary and as permitted
under the Listing Rules.
In the case of an internal promotion, any outstanding
variable pay awarded in relation to the previous role
will be paid according to its terms of grant (adjusted as
relevant to take into account the Board appointment).
On the appointment of a new Chairman or Non-Executive
Director, fees will be set taking into account the experience
and calibre of the individual. Where specific cash or share
arrangements are delivered to Non-Executive Directors,
these will not include share options or other performance-
related elements.