Holiday Inn 2011 Annual Report Download - page 51

OVERVIEW GREAT BRANDS HOW WE OPERATE WHERE WE OPERATE FACTS AND FIGURES
Summary remuneration report 49
could potentially vest; as a result 155,657 shares vested on 1 July
2011. Mr Cosslett continues to be eligible for a pro-rated vesting of
his outstanding LTIP awards, which will be determined at the end of
the relevant plan cycles, subject to performance conditions being
achieved. In addition, Mr Cosslett received a pro-rated cash award
under the 2011 ABP based on actual performance results at
year end.
When Mr Cosslett ceased pensionable service on 30 June 2011, his
accrued pension entitlement was £177,800 per annum before cash
commutation. In line with the terms of the plan, he commuted part of
this for a lump sum and immediately drew the remainder as pension.
Thomas Singer was appointed Chief Financial Officer on
26 September 2011. Mr Singer’s annual base salary is £540,000
and his incentives are in line with IHG’s remuneration policy for
Executive Directors. Mr Singer did not participate in the 2011 ABP.
In order to secure his recruitment, IHG agreed to compensate
Mr Singer for incentives from his previous employer that he had
to forgo, and the Committee approved the following one-off
arrangements which apply to Mr Singer only:
• a cash payment of £480,000 to be paid in March 2012; and
• a restricted award of 46,635 shares which vests on 27 September
2012, one year from the date of grant. These shares will be
forfeited if Mr Singer leaves the Company before the vesting date.
Business strategy and remuneration
IHG’s remuneration approach is designed to support and reflect
the delivery of business strategy by:
• attracting and retaining high-quality executives in an environment
where compensation is based on global market practice;
• aligning rewards for executives with the achievement
of business performance targets, strategic objectives and
returns to shareholders;
• supporting equitable treatment between members of the same
executive team; and
• facilitating global assignments and relocation.
IHG’s remuneration structure for senior executives places a strong
emphasis on performance-related reward. The Committee believes
that it is important to reward management, including the Executive
Directors, for targets achieved, provided those targets are stretching.
Business strategy is the driver of our reward structure.
We show below how IHG’s Vision and strategy directly link to the
current measures used in IHG’s incentive plans.
There are no performance conditions attached to these one-off
arrangements and the awards are not pensionable. However, it is
expected that all shares that vest will be held by Mr Singer until he
meets the expected shareholding set out on page 52.
In addition, to ensure immediate alignment to the long-term
performance of IHG, pro-rated awards were made for the 2010/2012
LTIP cycle and the 2011/2013 LTIP cycle of 137% and 154% of salary
respectively. Vesting of these awards is subject to the results of the
performance conditions for the relevant plan cycle.
As part of his recruitment terms, it was agreed that Mr Singer would
not have a salary review until April 2013.
Kirk Kinsell (formerly President, Europe, Middle East and Africa)
succeeded James Abrahamson as President, The Americas
following Mr Abrahamson’s resignation from IHG on 13 June 2011.
In accordance with his termination arrangements, all of
Mr Abrahamson’s outstanding deferred share awards under the ABP
and unvested LTIP awards lapsed and he relinquished all rights to an
annual bonus in respect of the 2011 ABP. No remuneration changes
were made for Mr Kinsell as a result of his new appointment.
Tracy Robbins was promoted to the Board on 9 August 2011. Her
annual base salary following promotion was increased to £400,000.
However, as an Executive Committee member since joining IHG,
Ms Robbins’ incentive arrangements remained unchanged.
GREAT HOTELS GUESTS LOVE
WHERE WE COMPETE
Growing our core business in the largest markets where scale really
counts, and also in key global gateway cities and resort destinations
Seeking opportunities to leverage our scale in new business areas
HOW WE WIN
Profitable market share
Progressive margins
Sustainable investment
Responsible business
NET ROOMS GROWTH
Supports our business model, segment and market
strategies to grow system size over three years
EBIT
Provides annual focus on earnings growth driven
by core operating inputs, namely rooms growth,
RevPAR, royalty fees and profit margins
LIKE-FOR-LIKE RevPAR GROWTH
Reflects the sustainable power of our brands,
scale and experience, and engaged workforce
Focuses growth on quality rooms in key markets
INDIVIDUAL OVERALL PERFORMANCE RATING
Provides annual focus on key performance objectives
and leadership competencies for the role:
Best-in-class delivery – growth and other targets
Talented people – employee engagement survey results
Preferred brands – brand performance targets
Responsible business – adoption of Green Engage
VISION & STRATEGY REWARD MEASURES
TOTAL SHAREHOLDER RETURNS
Aligned with our Vision to become one of the world’s great companies
LTIP measures ABP measures
GREAT HOTELS GUESTS LOVE
…achieved through strategic priorities