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72 IHG Annual Report and Financial Statements 2012
E – Pensions
The value of Richard Solomons’ DB pension arrangement as at
31 December 2012 is set out to the right. Details of this plan are
included above under Section 2.H – Pensions.
Richard Solomons is eligible for the EERF, which is available to
all members of the plan. This facility enables members to retire
without reduction in their pension if they are within five years of
normal retirement age. Although the EERF is non-contractual, its
continuation formed part of the agreement with trustees on closure
of the UK DB Plan. The EERF terms require an executive to obtain the
consent of the Company; the consent is discretionary but should not
be unreasonably refused.
D – Long Term Incentive Plan (LTIP)
Structure and outcome for 2012
The award for the 2010/12 cycle had corporate performance measures based on relative TSR and EPS. The measures and outcomes are
as follows:
Performance
measure
Threshold
performance
Maximum
performance
Threshold/
maximum
vesting
Weighting Maximum
award –
% of salary
Outcome
2010/12 cycle
TSR Growth equal to
the DJGH index
Growth exceeds the
index by 8% per year
or more
20%/100% 50% 102.5% Growth exceeded index by 15%
per year
EPS Growth of 5%
per year
Growth of 15% per
year or more
20%/100% 50% 102.5% Growth of 21.7% per year
Total vesting
outcome
100% of maximum award
Current position on other outstanding awards
From 2011, the performance measures for the LTIP were changed. Details of the performance measures and potential vesting outcomes for
outstanding awards as at 31 December 2012 are as follows:
Performance
measure
Threshold
performance
Maximum
performance
Threshold/
Maximum
vesting
Weighting Maximum
award –
% of salary
Potential vesting outcomes
2011/13 cycle
Net rooms
growth
Average of the
comparator group
1st in the comparator
group
20%/100% 25% 51.25% Improved performance needed
to achieve Threshold vesting
RevPAR
growth
Average of the
comparator group
1st in the comparator
group
20%/100% 25% 51.25% Between Threshold and
Maximum vesting if current
performance maintained
TSR Growth equal to
the DJGH index
Growth exceeds the
index by 8% per year
or more
20%/100% 50% 102.5% Maximum vesting if current
performance maintained
2012/14 cycle
Net rooms
growth
Average of the
comparator group
1st in the comparator
group
20%/100% 25% 51.25% Between Threshold and
Maximum vesting if current
performance maintained
RevPAR
growth
Average of the
comparator group
1st in the comparator
group
20%/100% 25% 51.25% Between Threshold and
Maximum vesting if current
performance maintained
TSR Growth equal to
the DJGH index
Growth exceeds the
index by 8% per year
or more
20%/100% 50% 102.5% Maximum vesting if current
performance maintained
Accrued value of annual
pension if retired
31 December 2012
Accrued value of annual pension
at 31 December 2012, assuming
retirement at normal retirement
age (9 October 2021)
£245,180, of which:
• £46,770 is funded
• £198,410 is unfunded
£377,200, of which:
• £71,950 is funded
• £305,250 is unfunded
The increase in the accrued value of the pension in 2012 arises
principally from Richard Solomons’ salary review when appointed
Chief Executive in July 2011.
Governance: Directors’ Remuneration Report continued