Holiday Inn 2003 Annual Report Download - page 23

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For the 2003/05 cycle, performance will be measured by
reference to:
• the increase in IHG PLC Total Shareholder Return (‘TSR’) over
the Performance Period relative to 11 identified comparator
companies; Accor, De Vere, Hilton Group, Hilton Hotels Corp,
Host Marriott, Marriott Hotels, Millenium & Copthorne, NH
Hotels, Sol Melia, Starwood Hotels and Thistle (up to the
point at which this company ceased to be listed); and
• the increase in IHG Return On Capital Employed (‘ROCE’)
over the performance period.
In respect of TSR performance, 10% of the award will be
released for the achievement of 6th place within the TSR group
and 50% of the award will be released for the achievement of
1st or 2nd place. In respect of ROCE performance, 10% of the
award will be released for the achievement of 30% growth and
50% of the award will be released for the achievement of 80%
growth. Vesting between all stated points will be on a straight
line basis.
It is the current intention that similar performance targets will
apply to awards made in 2004 and later years.
A ‘transitional’ award was also made in 2003, subject to TSR
performance over the period to 31 December 2004. For
executive directors the maximum value of this award equated
to 140% of salary.
Benefits under the Performance Restricted Share Plan are not
pensionable.
3.3 COMPANIES USED FOR COMPARISON
In assessing levels of pay and benefits, IHG compares the
packages offered by different groups of comparator companies.
These groups are chosen having regard to participants’:
• size – turnover, profits and the number of people employed;
• diversity and complexity of businesses;
• geographical spread of businesses; and
• industry type.
External consultants are used to advise the Committee on the
structure and level of pay and benefits in IHG’s markets.
3.4 POLICY ON EXTERNAL APPOINTMENTS
The Company recognises that its directors may be invited
to become non-executive directors of other companies and
that such duties can broaden experience and knowledge,
and benefit the business. Executive directors are, therefore,
allowed to accept one non-executive appointment (excluding
positions where the director is appointed as the Company’s
representative), subject to Board approval, as long as this is
not likely to lead to a conflict of interest, and to retain the fees
received. Richard North receives £36,000 pa for his services
as a non-executive director.
3.5 PERFORMANCE GRAPH
Since its listing on 15 April 2003, the Company has been a
member of the FTSE 100 index. The graph below measures
the performance of Six Continents PLC up to Separation,
and subsequently the performance of IHG PLC, assuming
dividends are reinvested, compared with the total shareholder
return performance achieved by the FTSE 100 companies.
80
110
120
130
140
160
90
(Mean average index for the month – October 1998=100)
INTERCONTINENTAL HOTELS GROUP TOTAL SHAREHOLDER RETURN v FTSE 100
Source: Thomson Financial Datastream
InterContinental Hotels Group PLC – total return index
(Six Continents PLC up to 14 April 2003)
FTSE 100 – total return index
100
150
Oct
1998
Jan Apr Jul Jan Apr Jul Jan Apr Jul Jan Apr Jul Jan Jan
2004
Apr JulOct
1999
Oct
2000
Oct
2001
Oct
2002
Oct
2003
IHG PLC shares listed 15.4.03