Holiday Inn 2011 Annual Report Download - page 53

OVERVIEW GREAT BRANDS HOW WE OPERATE WHERE WE OPERATE FACTS AND FIGURES
Summary remuneration report 51
Remuneration elements
Base salary and benefits
The salary for each Executive Director is reviewed annually. Base
salary is the only element of remuneration which is pensionable.
In reviewing potential salary changes, the Committee considers
business and individual performance, average salary increases for
the wider IHG workforce and, where appropriate, the terms offered
by comparator and competitor companies.
When external benchmarking is used, the comparator groups
are chosen having regard to participants’:
• size – market capitalisation, turnover, profits and the number
of people employed;
• diversity and complexity of business;
• geographical spread of business; and
• relevance to the hotel industry.
Annual Bonus Plan
Awards under the ABP require the achievement of challenging
performance goals before a target bonus of 115% of salary is
payable. Half of any award earned is compulsorily deferred in the
form of shares for three years. No matching shares are awarded
by the Company.
Performance
measures
Payment
structure
Annual
Bonus
for 2011
70%
EBIT
50%
Cash
30%
Individual
50%
Deferred
shares
Long Term Incentive Plan
The LTIP allows Executive Directors and eligible management
employees to receive share awards, subject to the achievement
of performance conditions, measured over a three-year period.
Awards are made annually and, other than in exceptional
circumstances, will not exceed three times annual salary for
Executive Directors.
For the 2012/2014 cycle, the performance conditions are:
• IHG’s TSR relative to the Dow Jones Global Hotels (DJGH) index
(50% of the award);
• cumulative annual growth of net rooms (25% of the award); and
• cumulative annual like-for-like RevPAR growth (25% of the award).
Vesting for points between threshold and maximum will be
calculated on a straight-line basis.
Performance
measures
Payment
structure
LTIP
2011/2013
25% RevPAR
25% Rooms
100%
Shares
50%
TSR
After testing the performance conditions set on grant, the
Committee will review the vesting outcomes of the rooms and
RevPAR measures against an assessment of earnings and quality
of the financial performance of the Company over the period. The
Committee may reduce the number of shares which vest if they
determine such an adjustment is appropriate.
The LTIP three-year cycle ending 31 December 2011 was based
on relative TSR and EPS and resulted in 73.9% vesting for the
Executive Directors, as shown on the next page.
For 2011, EBIT achieved was 104.1% of target for the year. Based
on this performance, the following table shows the level of 2011
awards, of which 50% was paid in cash and 50% in deferred shares
that will vest after three years:
Award as % of salary
Measure Key performance indicator Target Max
Financial EBIT (70%) 80.5 161
Individual Overall performance rating (OPR) (30%) 34.5 69
Total for 2011 115 200*
* Combined EBIT & OPR payout subject to a maximum of 200% of base salary.
Actual 2011 result for current Executive Directors (as % of salary)
EBIT % OPR % Total %
payout payout payout
Richard Solomons 113.5 51.8 165.3
Kirk Kinsell 113.5 4 3.1 156.6
Thomas Singer* N/A N/A N/A
Tracy Robbins 113.5 60.4 173.9
* Mr Singer did not participate in the 2011 ABP.
In addition, benefits are provided to Executive Directors in
accordance with local market practice.
The current Executive Directors’ annual base salaries are:
2012 2012 2011 2011
Director £ $ £ $
Richard Solomons 721,000 700,000
Kirk Kinsell 755,400 737,000
Thomas Singer 540,000 540,000
Tracy Robbins 412,000 400,000