Holiday Inn 2012 Annual Report Download - page 76

74 IHG Annual Report and Financial Statements 2012
C – Non-Executive Directors’ pay policy and structure
Determination of fee levels
Non-Executive Directors are paid a fee which is agreed by the Executive Directors and the Chairman of the Board, taking into account fees paid
in other companies of a similar complexity. These fees also reflect the time commitment and responsibilities of the roles. Accordingly, higher
fees are payable to the Senior Independent Director who chairs the Audit Committee and to the Chairmen of the Remuneration and Corporate
Responsibility Committees, reflecting the additional responsibilities of these roles. The Chairman’s fees are agreed by the Committee.
Non-Executive Directors’ fee levels are reviewed annually. In the final quarter of 2012 an increase of approximately 3% for the Non-Executive
Directors was agreed from 1 January 2013. This increase is broadly in line with anticipated salary increases for executive and senior
management employees across the wider organisation.
Annual fee rates for 2012 and 2013
1 Jan 2013 1 Jan 2012
Non-Executive Directors Role £ £
David Webster1 Chairman of the Board – 406,000
Patrick Cescau2 Chairman of the Board 400,000
David Kappler Senior Independent Director and Chairman of Audit Committee 108,500 105,060
Luke Mayhew Chairman of Remuneration Committee 91,000 88,230
Jennifer Laing Chairman of Corporate Responsibility Committee 80,000 77,520
Others Non-Executive Director 68,500 66,300
1 David Webster retired as Chairman on 31 December 2012.
2 Patrick Cescau was appointed Chairman on 1 January 2013.
D – Service contracts
Notice periods
• The Committee’s policy is for all Executive Directors to have rolling contracts with a notice period of 12 months.
• All Executive Directors have service contracts with a notice period of 12 months. All new appointments will have 12-month notice periods,
unless, on an exceptional basis to complete an external recruitment successfully, a longer initial notice period reducing to 12 months is
used, in accordance with the UK Corporate Governance Code.
Termination
• No provisions for compensation for termination following change of control, nor for liquidated damages of any kind upon termination in
any circumstances, are included in the current Directors’ contracts.
• There are no provisions in Executive Directors’ contracts for making a payment in lieu of notice. Instead the parties will rely on common
law to assess what, if any, damages may be payable for any loss resulting from termination in breach of contract (subject to the duty to
mitigate any loss).
• In the event of any early termination of an Executive Director’s contract, the policy is to seek to minimise any liability.
Non-executive directorships of other companies
• 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 Company.
• Therefore, Executive Directors are permitted 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, in the reasonable opinion of the Board, likely to
lead to a conflict of interest. Executive Directors would generally be authorised to retain the fees received.
• Current Executive Directors do not hold any non-executive directorships of any other company.
Non-Executive Director appointments
• Non-Executive Directors have letters of appointment.
• Patrick Cescau’s appointment as Non-Executive Chairman, effective from 1 January 2013, is subject to 12 months’ notice.
Details of current Directors’ contracts
Executive Directors Date of original appointment* Notice period
Richard Solomons 10 February 2003 12 months
Kirk Kinsell 1 August 2010 12 months
Tracy Robbins 9 August 2011 12 months
Tom Singer 26 September 2011 12 months
Non-Executive Directors Date of original appointment* Notice period
Patrick Cescau 1 January 2013 12 months
David Kappler 21 June 2004 n/a
Jennifer Laing 25 August 2005 n/a
Jonathan Linen 1 December 2005 n/a
Luke Mayhew 1 July 2011 n/a
Dale Morrison 1 June 2011 n/a
Ying Yeh 1 December 2007 n/a
* The capital reorganisation of the Group, effective on 27 June 2005, entailed the insertion of a new parent company of the Group. All Directors serving at that time signed new
letters of appointment effective from that date. The dates shown above represent the original dates of appointment of each of the Directors to the Group’s Parent Company.
All Directors’ appointments and subsequent re-appointments are subject to election and annual re-election by shareholders at the AGM.
Biographies of each of the Directors and their main responsibilities can be found on pages 46 and 47.
Governance: Directors’ Remuneration Report continued