Holiday Inn 2005 Annual Report Download - page 27

This report has been prepared by the Remuneration Committee
and has been approved by the Board. It complies with
Schedule 7A to the Companies Act 1985, which incorporates
the Directors’ Remuneration Report Regulations 2002, and also
with the Combined Code applicable for the 2005 financial year.
This report will be put to shareholders for approval at the
forthcoming Annual General Meeting.
1 THE REMUNERATION COMMITTEE
During the year, the Committee comprised the following
Non-Executive Directors:
Sir David Prosser – Chairman
David Kappler
Ralph Kugler until 6 May 2005
Robert C Larson+
Jonathan Linen from 1 December 2005
Sir Howard Stringer
No member of the Committee has any personal financial interest,
other than as a shareholder, in the matters to be decided by the
Committee. The Committee met six times in the year. Sir Howard
Stringer was unable to attend two meetings and Jonathan Linen
was unable to attend one meeting.
The Committee advises the Board on overall remuneration policy.
The Committee also determines, on behalf of the Board, and with
the benefit of advice from external consultants and members of the
Human Resources department, the remuneration of the Executive
Directors and other members of the Executive Committee.
Those who provided material advice or services to the Committee
during the year were:
Jim Larson+– Executive Vice President, Human Resources
David House – Senior Vice President, Human Resources
David Webster – Chairman
Andrew Cosslett – Chief Executive
Linklaters
Towers Perrin Inc.
+No family relationship between Robert C Larson and Jim Larson.
The Executive Vice President, Human Resources has direct access
to the Chairman of the Committee. Messrs J Larson and House,
who are Human Resource professionals and employees, advised
the Committee on all aspects of the Group’s reward policies and
structures. Towers Perrin Inc., an external consultancy, advised
the Committee on reward structures and levels applicable in the
markets relevant to the Group. Towers Perrin Inc. did not provide
any other services to the Group. Linklaters provided other legal
services to the Group.
Messrs J Larson and House, Linklaters and Towers Perrin Inc.
were originally appointed by the Group. Mr J Larson retired on
9 December 2005. His successor, Tracy Robbins, joined the Group
on 12 December 2005. The terms of reference of Towers Perrin Inc.
are available from the Company Secretary’s office on request.
2 POLICY ON REMUNERATION OF NON-EXECUTIVE DIRECTORS
Non-Executive Directors, including the Chairman, have letters of
appointment. Their appointment and subsequent reappointment
is subject to election and re-election by shareholders.
Non-Executive Directors are paid a fee which is approved by the
Board on the recommendation of the Executive Directors, having
taken account of the fees paid in other companies of a similar
complexity, and the skills and experience of the individual. Higher
fees are payable to the Chairman of the Remuneration Committee
and to the Senior Independent Director, who chairs the Audit
Committee, reflecting the additional responsibilities of these roles.
3 POLICY ON REMUNERATION OF EXECUTIVE DIRECTORS
AND SENIOR EXECUTIVES
The following policy has applied throughout the year and will apply
in future years, subject to ongoing review.
3.1 Total level of remuneration
The Committee aims to ensure that remuneration packages are
offered which:
• attract high quality executives in an environment where
compensation levels are based on global market practice;
• provide appropriate retention strength against loss of key
executives;
• drive aligned focus and attention to key business initiatives and
appropriately reward their achievement;
• support equitable treatment between members of the same
executive team; and
• facilitate global assignments and relocation.
The Committee is aware that, as a UK listed company, IHG PLC’s
incentive arrangements may be expected to recognise UK investor
guidelines. However, given the global nature of the Hotels
business, an appropriate balance needs to be drawn in the design
of relevant remuneration packages between domestic and
international expectations.
3.2 The main components
The Group has performance-related reward policies. These are
designed to provide the appropriate balance between fixed
remuneration and variable ‘risk’ reward, which is linked to the
performance of both the Group and the individual.
Group performance-related measures are chosen carefully to
ensure a strong link between reward and true underlying financial
performance, and emphasis is placed on particular areas requiring
executive focus.
InterContinental Hotels Group 2005 25
remuneration report