Experian 2016 Annual Report Download - page 85

Looking ahead
Following the executive leadership team changes last year, as well as the renewal of Experian’s long-term incentive plans at the 2015
AGM, 2016 has been a settled year and we expect the coming year to be similar.
Last year shareholders showed support for our long-term incentive arrangements by voting in favour of renewing our existing
plans at the 2015 AGM. The plans are directly linked to the business strategy, reflecting three of our key performance indicators
(Benchmark PBT per share, operating cash flow and ROCE), and have historically provided strong motivation for our executive
directors to grow the business. We are pleased that shareholders have continued to support these plans.
Annual bonus disclosure
Whilst we received strong support from our shareholders for our long-term incentive plans, we noted that a number of shareholders
called for an increase in the levels of disclosure in respect of our annual bonus targets.
The Committee has historically believed that targets for our annual bonus metric, being solely growth in Benchmark PBT, are
commercially sensitive and their disclosure would be detrimental to shareholders’ longer-term interests. However, we are aware
of shareholders’ desire for increased transparency around annual targets and that many companies are now providing more
information in this area. The Committee has therefore reviewed its position and has decided in future to disclose the annual
bonus targets one year following the completion of the relevant performance period. This new approach will apply for the year
commencing 1 April 2016 and these targets will be disclosed in the following year’s Report. We believe that this approach maintains
an appropriate balance between protecting the commercial interests of Experian and its shareholders, and providing greater
transparency in respect of our targets.
Ensuring shareholder alignment
We acknowledge that shareholders are increasingly calling for longer-term remuneration structures as a means of strengthening
shareholder alignment. Given the overwhelming support for the renewal of our long-term incentive plans last year, we believe that
our current policy already provides strong and significant alignment between the long-term interests of management and our
shareholders, through:
• shareholding guidelines, which are set at upper quartile levels relative to the market;
• a history of executive directors choosing to defer 100% of their bonuses into Experian shares under the CIP in each year since
their appointment to the Board; and
• executive directors holding vested shares from both the PSP and CIP in order to reach their shareholding guidelines as quickly
as possible.
We believe that the combination of these features achieves the same objectives as, for example, compulsory post-vesting holding
periods, whilst ensuring that our incentive plans remain tailored to Experian.
Summary
Overall, I am pleased with the year we have had, and believe that the changes we have made to this Report improve the level of
information and transparency for shareholders. As a Committee, we will continue to engage with our key shareholders and strive to
implement an executive remuneration framework which is both fair and appropriate.
I would like to conclude by thanking my fellow Committee members and those who support the Committee for their commitment
and guidance over the year. I am also grateful for the input received from shareholders which plays an important part in developing
responsible pay practices. I look forward to receiving your support at the 2016 AGM.
83Governance •Report on directors’ remuneration