Holiday Inn 2014 Annual Report Download - page 86

Performance measure Weighting
Target as a
% of salary
Illustrative achievement against
target for that measure
Award as a
% of salary
Maximum as a
% of salary
No
payout Threshold Target Maximum
Guest HeartBeat120% 23% 31.0% 46%
Employee Engagement survey 10% 11.5% 23.0% 23%
EBIT170% 80.5% 93.4% 161%
Total as a % of salary
Actual No payout
115% 147.4% 230%
capped at 200%2
1 The EBIT element of Kirk Kinsell’s award was based 50/50 on Group/The Americas results; the EBIT achievement for the Americas was 99.0% against target.
The Guest HeartBeat element of Mr Kinsell’s award was based wholly on The Americas results; achievement was 29.4% of target. The total award as a % of salary
for Mr Kinsell was 151.4% and in accordance with the APP Plan rules he will only receive the 50% cash portion.
2 Maximum achievement under all three measures would result in an award of 230% of total salary. However, under the DR Policy, awards are capped at 200%
of salary.
Annual Report on Directors’ Remuneration continued
Outcome for 2014 (audited information)
Based on performance, the following table shows the level of 2014 awards for which 50% will be paid in cash and 50% in deferred IHG
shares. These will vest after three years in February 2018. 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.
Executive Director Award as
% of salary
Total value of award
£0001
Richard Solomons 147.4 1,128
Paul Edgecliffe-Johnson 147.4 619
Kirk Kinsell 75.7 3652
Tracy Robbins 147.4 644
1 As shown in the single figure of remuneration on page 82.
2 In accordance with the rules of the APP, Kirk Kinsell will receive only the 50% cash portion of his 2014 APP award, as shown here.
In relation to the APP 2014 measures, we have disclosed percentage achievement against target for each measure in the graph at the
top of this page. We have also shown outcome vs opportunity. For the Guest HeartBeat and Employee Engagement survey measures,
the 2014 outcome scores are detailed on pages 31 and 32 of the Annual Report. Detail on the financial targets set is not disclosed at this
stage as it is, in the opinion of the Directors, commercially sensitive. Disclosure would risk providing 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. During 2015, we will consider what further transparency we can provide to shareholders
without disadvantaging the business.
2012/14 LTIP
The performance measures for each three-year LTIP cycle are set by the Committee. Awards are made annually and eligible executives
will receive shares at the end of that cycle, subject to achievement of the performance measures. The performance measures for the
2012/14 cycle were as follows and in line with the DR Policy:
• relative growth in net rooms over three years;
• relative like-for-like RevPAR growth over three years; and
• IHG’s TSR relative to a global hotels index (see page 89 for further details).
Growth in net rooms and RevPAR is measured on a relative basis against the comparator group, comprising the following major, globally
branded competitors: Accor, Choice Hotels, Hilton Worldwide, Hyatt, Marriott International Inc., Starwood Hotels and Wyndham Worldwide.
Why do we use these measures?
Net rooms growth RevPAR growth Relative TSR
This measures the net growth in the total
number of IHG hotel rooms over the duration
of the cycle relative to our major global
competitors. Together with the RevPAR
measure, it provides focus on ensuring a
balance between the quality of IHG hotels
and the speed at which IHG grows.
This measures success in growing our revenue
per available room for the duration of the cycle
relative to the RevPAR growth of our major
global competitors.
This measures the return to shareholders
by investing in IHG relative to our competitors
in the appropriate comparator group of global
hotels, as per data sourced from Thomson
Datastream.
In order to generate higher returns for our shareholders, we need to increase revenue share, improve operating efficiency and grow
margins through increasing the number of rooms we have available to sell, as well as increasing RevPAR for those rooms.
IHG Annual Report and Form 20-F 2014
84
continuedDirectors’ Remuneration Report