Holiday Inn 2005 Annual Report Download - page 30

3.6 Contracts of service
a) Policy
The Remuneration Committee’s policy is for Executive Directors
to have rolling contracts with a notice period of 12 months.
Richard Hartman, Stevan Porter and Richard Solomons
have service agreements with a notice period of 12 months.
Andrew Cosslett entered into a service agreement with an
initial notice period of 24 months, reducing month by month to
12 months after 12 months of service. As at the date of this
report, Andrew Cosslett’s notice period is 12 months. All new
appointments are intended to have 12-month notice periods.
However, on occasion, to complete an external recruitment
successfully, a longer initial period reducing to 12 months may
be used, following guidance in the Combined Code.
No provisions for compensation for termination following change
of control, or for liquidated damages of any kind, are included in
the current Directors’ contracts. In the event of any early termination
of an Executive Director’s contract, the policy is to seek to minimise
any liability.
David Webster ceased to act in his temporary capacity as interim
Chief Executive following the appointment of Andrew Cosslett as
Chief Executive on 3 February 2005. David Webster’s appointment
as Non-Executive Chairman, effective from 1 January 2004,
is subject to six months’ notice.
Non-Executive Directors, Ralph Kugler, Robert C Larson,
Sir David Prosser and Sir Howard Stringer signed letters of
appointment effective from the listing of IHG PLC in April 2003.
These were renewed, effective from completion of the capital
reorganisation of the Group and the listing of new IHG PLC shares
on 27 June 2005. David Kappler signed a letter of appointment
effective from his date of original appointment to the Board on
21 June 2004. This was also renewed, effective from 27 June 2005.
Jennifer Laing and Jonathan Linen signed letters of appointment
effective from their appointment dates, respectively 25 August 2005
and 1 December 2005.
All Non-Executive Directors’ appointments, with the exception of
the Chairman, are subject to three months’ notice.
b) Directors’ contracts
Contract Unexpired term/
Directors effective date notice period
Andrew Cosslett 3.2.05 12 months
Richard Hartman 15.4.03 12 months
Stevan Porter 15.4.03 12 months
Richard Solomons 15.4.03 12 months
Note: each of the Executive Directors signed a letter of appointment, effective
from completion of the capital reorganisation of the Group and the listing of new
IHG PLC shares on 27 June 2005. The terms of each appointment were as set out
in each Executive Director’s original service agreement.
3.7 Policy regarding pensions
UK-based Executive Directors and senior employees participate
on the same basis in the executive section of the InterContinental
Hotels UK Pension Plan and, if appropriate, the InterContinental
Executive Top-Up Scheme. The latter is an unfunded arrangement.
However, appropriate security is provided via a fixed charge on
a hotel asset. Stevan Porter and senior US-based executives
participate in US retirement benefits plans. Executives in other
countries, who do not participate in these plans, will participate
in local plans, or the InterContinental Hotels Group International
Savings & Retirement Plan.
Currently, the pension arrangements for UK-based Executive
Directors and other senior employees provide benefits from both
the tax-approved InterContinental Hotels UK Pension Plan and the
unfunded InterContinental Executive Top-Up Scheme. In response
to the new pension regime resulting from the Finance Act 2004 and
applying from April 2006, these plans will be amended to continue
to provide, tax efficiently, similar benefits in total, but with a
different split of benefits between the two plans.
As an alternative to these arrangements, a cash allowance may
be taken.
The information provided in the following pages of this report has
been audited by Ernst & Young LLP.
remuneration report
28 InterContinental Hotels Group 2005