Holiday Inn 2008 Annual Report Download - page 45

THE BOARD, SENIOR MANAGEMENT AND THEIR RESPONSIBILITIES
Remuneration report 43
2.4 Policy on external appointments
The Company recognises that its Executive 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 (in addition to any positions where the
Director is appointed as the Group’s representative), subject to
Board approval, as long as this is not likely to lead to a conflict of
interest. Executive Directors are generally authorised to retain the
fees received.
Andrew Cosslett was Non-Executive Chairman of Duchy Originals
Limited until 30 September 2008, for which he received no
remuneration.
2.5 Performance graph
Throughout 2008, the Company was a member of the FTSE 100
index. Accordingly, the Committee has determined that this is the
most appropriate market index against which to test the Company’s
performance. The graph below shows the TSR performance of IHG
from 31 December 2003 to 31 December 2008, assuming dividends
are reinvested, compared with the TSR performance achieved by
the FTSE 100 index.
Total Shareholder Return: InterContinental Hotels Group PLC v FTSE 100
Source: Datastream
InterContinental Hotels Group PLC – Total Shareholder Return Index FTSE 100 – Total Shareholder Return Index
31 Dec 200831 Dec 200731 Dec 200631 Dec 200531 Dec 200431 Dec 2003
300
250
200
150
100
50
0
2.6 Contracts of service
a) Policy
The Committee’s policy is for Executive Directors to have rolling
contracts with a notice period of 12 months. Andrew Cosslett and
Richard Solomons have service agreements with a notice period of
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 notice period reducing to
12 months may be used, in accordance with the Combined Code.
No provisions for compensation for termination following change
of control, nor 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.
Non-Executive Directors have letters of appointment. David
Webster’s appointment as Non-Executive Chairman, effective
from 1 January 2004, is subject to six months’ notice. The dates
of appointment of the other Non-Executive Directors are set out
on page 36.
All Directors’ appointments and subsequent reappointments
are subject to election and re-election by shareholders.
b) Directors’ contracts
Contract Unexpired term/
Director effective date1notice period
Andrew Cosslett 03.02.05 12 months
Stevan Porter 15.04.03 n/a2
Richard Solomons 15.04.03 12 months
1 Each of the Executive Directors signed a letter of appointment, effective
from completion of the June 2005 capital reorganisation of the Group
incorporating the same terms as their original service agreements.
2 Stevan Porter passed away on 7 August 2008.
Biographies of each of the Directors and their main responsibilities
can be found on page 30. In January 2009 a new President
of the Americas region, James Abrahamson, was appointed.
Mr Abrahamson is also a member of the Executive Committee
but not the Board.
2.7 Policy regarding pensions
Andrew Cosslett, Richard Solomons and other senior UK-based
employees participate on the same basis in the executive section
of the registered InterContinental Hotels UK Pension Plan and,
if appropriate, the InterContinental Executive Top-Up Scheme. The
latter is an unfunded arrangement, but with appropriate security
provided via a fixed charge on a hotel asset. As an alternative to
these unfunded arrangements, a cash allowance may be taken.
Senior US-based executives participate in US retirement benefits
plans, as did Stevan Porter until his death on 7 August 2008.
Executives outside the UK and US participate in the InterContinental
Hotels Group International Savings and Retirement Plan or other
local plans.