EasyJet 2015 Annual Report Download - page 69

Strategic report Governance Accounts
www.easyJet.com
On joining the Board on 2 October 2015, Andrew Findlay’s base
salary was set at £425,000. The intention on joining was to set
the salary at a discount to the market level but with a view that
it would be brought up to the mid-market level as he gained
experience in the role. The Committee therefore intends to
increase his salary to £500,000 in equal increments over the
next two to three years subject to individual and Company
performance. The Committee has taken account of easyJet’s
policy of providing benefits and pension at modest levels and
the weighting on variable pay in the overall package in
determining the salary level. Andrew will also receive a cash
alternative to pension of 7% of salary, annual bonus opportunity
of 175% of salary, annual LTIP award of 200% of salary, and
some modest benefits. This package is consistent with our
remuneration policy. In addition, in order to secure the
appointment, certain buy-out arrangements have been agreed,
to compensate Andrew for incentive awards forfeited from his
previous employer. The Committee has taken particular care in
ensuring that these arrangements are appropriate in light of our
policy, the expectations of institutional investors, where a
buy-out takes place, and replicate, as closely as possible, the
expected value, form and time horizons of the forfeited awards.
Shareholder feedback
easyJet is committed to maintaining an open and transparent
dialogue with shareholders. The objective of this report is to
communicate clearly how much the Executive Directors are
earning and how this is linked to performance. As always, I
welcome any comments you may have.
CHARLES GURASSA
Chair of the Remuneration Committee
16 November 2015
OUR REMUNERATION POLICY
What is the role of our Remuneration Committee?
The Remuneration Committee has responsibility for determining
remuneration for the Executive Directors and the Chairman of
the Board. The Committee also reviews the remuneration of the
Group’s most senior executives in consultation with the Chief
Executive. 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.
What does the Committee consider when setting
remuneration?
When setting the policy for Executive Directors’ remuneration,
the Committee takes into account total remuneration levels
operating in companies of a similar size and complexity, the
responsibilities of each individual role, individual performance
and an individual’s experience. Our overall policy, having had due
regard to the factors noted, is to weight remuneration towards
variable pay. This is typically achieved through setting base pay
at up to market median levels, offering very modest pension and
benefits, and above-market variable pay opportunities linked to
the achievement of demanding performance targets.
In setting remuneration for the Executive Directors, the
Committee takes note of the overall approach to reward for
employees in the Group. Salary increases will ordinarily be (in
percentage of salary terms) in line with those of the wider
workforce. The Committee does not formally consult directly
with employees on executive pay but does receive periodic
updates from the Group People Director.
The Committee also considers developments in institutional
investors’ best practice expectations and the views expressed
by shareholders during any dialogue.
How do we take into account the views of shareholders when
we determine the remuneration policy?
easyJet remains committed to shareholder dialogue and takes
an active interest in voting outcomes. We consult extensively
with our major shareholders when setting our remuneration
policy. If any of these shareholders were to be opposed to our
policy, we would endeavour to meet with them, as appropriate,
to understand and respond to any issues they may have.
The policy set out below applies to awards granted from the
2013 financial year onwards. Awards granted under the previous
policy are subject to different performance measures (typically
Return on Equity (ROE) or ROCE as the sole performance
measure), have different award levels and may be earned in
line with the terms of their grant in due course. Details of all
the outstanding share awards granted to existing Executive
Directors are set out in the Annual Report on Remuneration.
WHAT IS IN THIS REPORT?
This report sets out easyJet’s remuneration policy for
Executive and Non-Executive Directors, describes the
implementation of that policy and discloses the amounts
earned relating to the year ended 30 September 2015.
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)
(Amendment) Regulations 2013. The report has been
prepared in line with the recommendations of the UK
Corporate Governance Code and the requirements of the
UKLA Listing Rules.
The Directors’ remuneration policy was approved by
shareholders in a binding vote at the 2015 AGM on 12 February
2015. The policy took formal effect from the date of approval
and the intention is that it will apply until the 2018 AGM. A
summary of the policy has again been included in this report
(set out on pages 61 to 67) for the purposes of clarity
and transparency.
The Annual Statement by the Chairman of the
Remuneration Committee (set out on pages 64 to 65) and
the Annual Report on Remuneration (set out on pages 71 to
80) will be subject to an advisory vote at the AGM.