Holiday Inn 2006 Annual Report Download - page 33

Audit Committee report and Remuneration report
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 2006 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
Robert C Larson
Jonathan Linen
Sir Howard Stringer (to 10 November 2006)
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 four times in the year. Sir Howard
Stringer, who resigned from the Board on 10 November 2006, was
unable to attend two meetings prior to his resignation.
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:
David Webster – Chairman
Andrew Cosslett – Chief Executive
Tracy Robbins – Executive Vice President, Global Human Resources
Lori Gaytan – Senior Vice President, Global Human Resources
(from 18 August 2006)
David House – Senior Vice President, Global Human Resources
(to 18 August 2006)
Linklaters
Towers Perrin
The Executive Vice President, Global Human Resources has direct
access to the Chairman of the Committee. Ms Robbins, Ms Gaytan
and Mr House, who are Human Resource professionals and
employees, advised the Committee on all aspects of the Group’s
reward policies and structures. Towers Perrin, an external
consultancy, advised the Committee on reward structures and levels
applicable in the markets relevant to the Group. Towers Perrin did
not provide any other services to the Group. Linklaters provided
other legal services to the Group.
Ms Robbins and Ms Gaytan, Mr House, Linklaters and Towers
Perrin were originally appointed by the Group. Following planned
changes within the Global Human Resources function, Ms Gaytan
took over Mr House’s advisory role to the Committee with effect
from 18 August 2006. The terms of reference for Towers Perrin 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.
Non-Executive Directors’ fee levels were last established on
1 January 2005. Having taken into account the global nature, scale
and complexity of the Group’s business, and current competitive
fee levels, the Board has determined the following annual fee rates,
applicable from 1 January 2007:
Chairman £390,000 (from £350,000); Senior Independent Director
and Chairman of the Audit Committee £95,000 (from £80,000);
Chairman of the Remuneration Committee £80,000 (from £65,000);
and all other Non-Executive Directors £60,000 (from £50,000).
3 Policy on remuneration of Executive Directors and
senior executives
The following policy has applied throughout the year and, except
where stated, 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 its primary listing is on the
London Stock Exchange, IHG’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.
Remuneration report
IHG The Board, senior management and their responsibilities 31