Holiday Inn 2013 Annual Report Download - page 91

Award levels relate to achievement against target under each of the measures, as shown below:
Guest HeartBeat
20% of award
Employee Engagement
10% of award
EBIT
70% of award
Total award
% of salary
Threshold
Achievement vs target 50% 50% 90%
Award level
50% of target payment
11.5% of salary
50% of target payment
5.75% of salary
50% of target payment
40.25% of salary 57.5%
Target
Achievement vs target 100% 100% 100%
Award level
100% of target payment
23% of salary
100% of target payment
11.5% of salary
100% of target payment
80.5% of salary 115%
Maximum
Achievement vs target 200% 200% 110%
Award level Maximum payment
40% of salary
Maximum payment
20% of salary
Maximum payment
140% of salary 200%
Outcome for 2013 (audited information)
Group EBIT achieved for 2013 was 102.5% of target. For The Americas, EBIT achievement was 101.2% of target. The EBIT element of
Kirk Kinsell’s award was based 50/50 on Group/The Americas results and for the other Executive Directors, it is based wholly on global
results. Based on performance, the following table shows the level of 2013 awards. Under the terms of the APP, participants are subject
to an automatic adjustment to their award if they do not fully exceed targets on a range of regional and organisational objectives. 50% will
be paid in cash and 50% in deferred IHG shares that will vest after three years in February 2017. The deferred share awards are made in
the form of forfeitable shares that receivedividends during the three-year vesting period and include the right to vote at shareholder
meetings, apart from Kirk Kinsell, whose deferred share award is in the form of a conditional share award with dividend equivalents.
Guest HeartBeat Employee Engagement EBIT Total
Director
Achievement
vs target (%)
Award as
% of salary
Achievement
vs target (%)
Award as
% of salary
Achievement
vs target (%)
Award as
% of salary
Award as
% of salary
Richard Solomons 100.1 25.0 200.0 23.0 102.5 100.6 148.6
Kirk Kinsell 100.1 24.8 200.0 23.0 101.8 95.4 107.4
Tracy Robbins 100.1 25.0 200.0 23.0 102.5 100.6 148.6
Tom Singer 100.1 25.0 200.0 23.0 102.5 100.6 74.31
1
As a result of Tom Singer’s resignation from IHG with effect from 1 January 2014, Tom Singer will receive only the 50% cash portion of the 2013 APP award in
accordance with the plan rules.
2013 Group EBIT includes certain liquidated damages payments (LDs), and in determining the outcome under the APP, the Committee has
applied a discount to these payments to reflect the resulting loss of future income to the Group. In addition, the Committee has exercised
discretion to adjust regional EBIT achievement levels. The percentage by which global EBIT is reduced by way of discount to the LDs
received, has also been applied to reduce each region’s EBIT for the purposes of determining APP awards.
Actual 2013 targets under each measure are not disclosed as they are, in the opinion of the Directors, commercially sensitive.
Disclosurewould provide IHG’s major competitors with an unfair commercial advantage as these companies are either unlisted or
listed on a stock exchange other than the London Stock Exchange, and therefore not subject to the same regulations.
The actual award level was determined on a straight-line basis
between threshold and target, and target and maximum, and
relates to achievement vs target under each measure:
• Threshold is the minimum level that must be achieved for there
to be an award in relation to that measure; for achievement
below this, no award is made.
• Target is the target level of achievement and results in a target
award for that measure (115% of salary).
• Maximum is the level of achievement at which a maximum
award for that measure is received (200% of salary).
Threshold award was subject to a global EBIT affordability gate
such that:
• if global EBIT was below 85% of target, no award would be
made; and
• if global EBIT was between 85% and 90% of target, half of any
award relating to the Guest HeartBeat and/or Employee
Engagement survey measures would bemade.
The Guest HeartBeat target for 2013 was based on scores compiled
directly from guest feedback. Guest HeartBeat measures overall
guest satisfaction with a hotel visit, based on a 10-point scale. It takes
a common and consistent approach for all brands in all regions. The
targets were set taking into account corporate strategic objectives at
global and regional levels with a focus on year-on-year improvement
in guest service scores and the quality of IHG branded hotels.
Our Employee Engagement survey scores are already high against
benchmarks both globally and in our priority markets, such as Greater
China; IHG has seen an 18 percentage point increase across the Group
in the last five years. According to our third-party survey administrator,
TNS, who provides similar services to many other companies,
Employee Engagement survey scores for high-performing companies
(the top 7% of companies) have remained flat since 2010, and service
companies have reduced by an average of 1.5% year-on-year. In this
context, the Committee considered setting a target based on further
year-on-year improvement to be stretching. The Employee
Engagement survey covers all employees and those working in our
owned and managed hotels (excluding our joint venture partners).
Governance 89
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