Holiday Inn 2012 Annual Report Download - page 63

OVERVIEW BUSINESS REVIEW GOVERNANCE
GROUP FINANCIAL
STATEMENTS
PARENT COMPANY FINANCIAL STATEMENTS OTHER INFORMATION
Directors’ Remuneration Report 61
Committee membership
The independent Non-Executive Directors who served on the
Committee during 2012 were as follows:
Member Role Meetings attended Date of appointment
Luke Mayhew Chairman 6/6 1 July 2011
David Kappler Member 6/6 21 June 2004
Jonathan Linen Member 6/6 1 December 2005
Ying Yeh Member 6/6 1 December 2007
Total meetings held 6
The following attended all meetings:
David Webster (Chairman of the Board until 31 December 2012);
Richard Solomons (Chief Executive); and Tracy Robbins (Executive
Vice President, Human Resources and Group Operations Support).
Committee meetings were also attended by the following individuals
who provided advice to the Committee on remuneration proposals:
Lori Gaytan (Senior Vice President, Americas Human Resources
and Global Reward) – February, May and June meetings; and
Jean-Pierre Noel (appointed Senior Vice President, Global Reward
in April 2012) – from May meeting onwards.
None of these individuals is in attendance when his/her own
remuneration is being discussed.
Governance
The Committee’s remit is set out in its terms of reference which
are reviewed annually and were updated by the Board in
December 2012. They are available on the Company’s website
www.ihgplc.com/investors under corporate governance/committees,
or from the Company Secretary’s office on request.
Responsibilities
The Committee agrees, on behalf of the Board, all aspects of
the remuneration of the Executive Directors and the Executive
Committee, and agrees the strategy, direction and policy for the
remuneration of other senior executives who have a significant
influence over the Company’s ability to meet its strategic objectives.
Committee approach to managing risk
The approach to remuneration is to directly link it to IHG’s strategy.
Risk management is a key part of IHG being a Responsible Business
and the Committee considers risk mitigation as central to the way
that incentive arrangements are structured, for example:
• the APP, ABP and LTIP are all structured so as to have a balance
of measures that ensure senior executives are not incentivised to
behave in a way that could adversely affect the sustainable growth
of the Company and the long-term interests of its shareholders.
For instance, in the new APP, the drive for short-term financial
results is balanced by performance measures focussed on guest
satisfaction and employee engagement;
• the Committee reserves the discretion to determine that payouts
in the LTIP are adjusted if they are not consistent with the
Committee’s assessment of earnings and the quality of the
Company’s financial performance over the relevant performance
period; and
• for awards under the Company’s incentive plans made
from January 2012, clawback provisions may be used by the
Committee in any situation of misconduct that causes significant
damage or potential damage to IHG’s prospects, finances or
brand reputation, and/or actions that lead to material
misstatement or restatement of accounts.
Key issues discussed in 2012 meetings
In 2012, the Committee met six times. The most significant
topic of discussion was the review of annual incentives and
the new APP. The Committee discussed, amongst others, the
following matters:
Date Key issues discussed
9 February • Executive Committee performance and
salary review;
• 2011 Directors’ Remuneration Report;
• vesting of 2011 annual incentive plan and 2009/11
long-term incentive plan; and
• design of 2012 annual incentive plan and 2012/14
long-term incentive plan.
3 May • Initial review of future annual incentive
structure; and
• 2012 incentive measure projections.
27 June • Key design principles for annual incentive
plan for 2013 onwards (APP); and
• 2012 incentive measure projections.
26 September • Detailed structure of incentives for
2013 onwards;
• 2012 incentive measure projections; and
• IHG’s return of capital to shareholders – effect
on incentive plans.
1 November • Design of APP measures for 2013.
12 December • APP targets for 2013;
• update on the Committee Chairman’s meetings
with shareholders;
• executive remuneration market updates;
• 2012 incentive measure projections;
• approach to 2012 Directors’ Remuneration
Report; and
• annual review of the Committee’s terms
of reference.
Committee interaction with stakeholders
The Committee actively engages with shareholders on remuneration
matters. Major shareholders were approached prior to the 2012 AGM
and offered the opportunity to discuss any aspect of our approach
to remuneration. In addition, in November 2012, the Chairman of the
Committee approached major shareholders outlining the changes
to annual incentive arrangements for 2013. Meetings were held with
many of them, as well as shareholder representative organisations,
at which details of the changes, best practice stemming from the
proposed regulatory changes and reporting of executive remuneration
were discussed.
Votes in favour of our Directors’ Remuneration Report at previous AGMs:
% in favour
2012 95.46%
2011 96.24%
1. The Remuneration Committee