EasyJet 2015 Annual Report Download - page 74

70 easyJet plc Annual report and accounts 2015
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
a board or committee of a listed company 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 450% of salary (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 buy-out 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 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.
How are the Non-Executive Directors paid?
The Chairman, Deputy Chairman and Non-Executive Directors
receive an annual fee (paid in monthly instalments). The fee for
the Chairman is set by the Remuneration Committee and the
fees for the Deputy Chairman and Non-Executive Directors are
approved by the Board, on the recommendation of the
Chairman and Chief Executive.
What are the terms of appointment of the Non-Executive
Directors?
The Chairman, Deputy Chairman and Non-Executive Directors’
terms of appointment are recorded in letters of appointment,
which are usually renewed every three years. The required notice
from the Company is three months in all cases. The Non-
Executive Directors are not entitled to any compensation on loss
of office.
Directors’ remuneration report continued