Holiday Inn 2015 Annual Report Download - page 75

Audited
Other information relating to Directors’ remuneration
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 their experience and knowledge, and benefit
the Company. IHG therefore permits its Executive Directors 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. Any fees from such appointments
may be retained by the individual Executive Director.
From 13 April 2015, Richard Solomons, Chief Executive Officer, served
as a Non-Executive Director of Marks and Spencer PLC and received
fees of £70,000 accordingly.
No other current Executive Director holds any non-executive director
appointments at any other company.
Service contracts and notice periods for Executive Directors
All Executive Directors have rolling 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 period reducing to 12 months
is used. This is in accordance with the UK Corporate Governance Code.
All Directors are subject to election and annual re-election by
shareholders at the AGM.
Dividends paid to Executive Directors
An interim dividend of 17.7p per ordinary share (27.5¢ per ADR) was
paid on 2 October 2015 to shareholders on the Register of members
at the close of business on 28 August 2015.
The 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 scores would be made.
These measures and outcomes are set out in the ‘At a glance’
section on page 70.
Outcome for 2015
Awards for 2015 will be paid 50% in cash and 50% in deferred
IHG shares, vesting three years after the date of grant, in February
2019. 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. They are not
subject to any further performance conditions. Kirk Kinsell left IHG
on 13 February 2015 and under the APP Plan rules is not entitled
to an award under the 2015 APP.
Executive
Director
Salary as at
31 December
2015
£
Award as
% of salary
Total value
of award
£000
Richard Solomons 792,000 149.9 1,187
Paul Edgecliffe-Johnson 460,000 149.9 690
Tracy Robbins 448,000 149.9 672
2013/15 LTIP (shares)
Operation
Awards are made annually and eligible executives will receive
shares at the end of that cycle, subject to achievement of the
performance measures. Growth in net rooms supply and RevPAR
is measured on a relative basis against the comparator group. This
group comprises the following major, globally branded competitors:
Accor Hotels, Choice Hotels International Inc., Hilton Worldwide,
Hyatt Hotels Corporation, Marriott International Inc., Starwood
Hotels and Resorts and Wyndham Hotels and Resorts. TSR
measures the return to shareholders by investing in IHG relative
to our competitors in the appropriate comparator group of global
hotels, as per the data sourced from Thomson Datastream.
The share price of 2,515p used to calculate the 2013/15 LTIP cycle
value shown in the single figure table is the average over the final
quarter of 2015. The share price in respect of the 2012/14 LTIP cycle
has been restated using the VWAP (Volume Weighted Average
Price) of 2,592p on the date of actual vesting on 18 February 2015.
The corresponding values shown in the 2014 report (prior to the
actual vesting) were an estimate and calculated using a share price
as at 31 December 2013 of 2,013p.
The Remuneration Committee determined that Kirk Kinsell would
be treated as a good leaver for the purposes of the LTIP awards,
in line with the DR Policy on termination of employment. Mr Kinsell
therefore retained all outstanding LTIP awards which will vest on
the normal vesting dates, subject to the satisfaction of performance
conditions, with the awards pro-rated to his leaving date. The
Remuneration Committee has reserved the right to determine that,
prior to the vesting of shares under each outstanding LTIP cycle,
Mr Kinsell’s entitlement to shares under the LTIP will be forfeited
in full if Mr Kinsell commits a breach of his continuing post-
termination contractual obligations.
Outcome for 2013/15 cycle
This cycle will vest on 24 February 2016. Performance was below
the average of the comparator group on the relative growth in net
rooms supply and RevPAR measures and therefore these elements
will not vest. The figure for Paul Edgecliffe-Johnson includes 18,322
shares, which were granted prior to his appointment to the Board,
and an additional 9,454 shares in respect of his increased award,
pro-rated from the date of his appointment to the Board. This is
in line with the DR Policy. The outcome figure for Kirk Kinsell is his
maximum award pro-rated to his leaving date of 13 February 2015.
The outcome for this cycle is shown below:
Executive
Director
Maximum
opportunity
at grant
(number of
shares)
% of
maximum
opportunity
vested
Outcome
(number
of shares
awarded at
vest)
Total value
of award
£000
Richard
Solomons
76,319 50 38,159 960
Paul
Edgecliffe-
Johnson
27,776 50 13,888 349
Kirk Kinsell 53,049 50 18,419 463
Tracy Robbins 4 3,819 50 21,909 551
Net rooms supply and RevPAR growth were measured by reference
to the three years ending 30 September 2015; TSR was measured
by reference to the three years ending 31 December 2015.
The measures and outcomes are set out on page 70.
Tracy Robbins
Tracy Robbins was absent for health reasons for a portion of the
year, during which time any payments and awards made to her
were in line with the DR Policy and her contract of employment.
STRATEGIC REPORT GOVERNANCE GROUP FINANCIAL STATEMENTS ADDITIONAL INFORMATIONPARENT COMPANY FINANCIAL STATEMENTS
73IHG Annual Report and Form 20-F 2015