Holiday Inn 2015 Annual Report Download - page 76

Directors’ Remuneration Report continued
Current position on outstanding awards
Details of the performance measures and potential vesting outcomes for outstanding awards as at 31 December 2015 are as follows:
Performance
measure
Threshold
performance
Maximum
performance
Threshold/
maximum vesting Weighting
Maximum award
(% of salary) Potential vesting outcome
2015/17 cycle 2014/16 cycle
Net rooms
supply growth
Average of the
comparator group
First in the
comparator group
20% /100% 25% 51.25% Between threshold and
maximum based on
current performance
Improved performance
needed to achieve
threshold
RevPAR growth Average of the
comparator group
First in the
comparator group
20% /100% 25% 51.25% Improved performance
needed to achieve
threshold
Threshold achievement if
current performance
maintained
Relative TSR Growth equal to the
global hotels index
Growth exceeds
the index by 8%
per year or more
20% /100% 50% 102.5% Between threshold and
maximum based on
current performance
Maximum vesting if
current performance
maintained
Other outstanding awards
During 2014, awards were granted under the 2014/16 LTIP cycle
(shown below) on the same basis as the 2015/17 LTIP cycle. Share
price was the closing mid-market share price of 1,908p at the date
of grant on 7 April 2014. These awards will vest in February 2017
to the extent performance targets are met.
Executive
Director Award date
Maximum
shares
awarded
Market price
per share
at grant
£
Face value
of award
at grant
£000
Number
of shares
received
if minimum
performance
achieved
2014/16 cycle
Richard
Solomons
8 April 2014 82,193 19.08 1,568 16,439
Paul
Edgecliffe-
Johnson
8 April 2014 45,125 19.08 861 9,025
Kirk Kinsell 8 April 2014 18,570 19.08 981 3,714
Tracy Robbins 8 April 2014 46,952 19.08 896 9,390
The vesting date for these awards is the day after the announcement
of our Annual 2016 Preliminary Results in February 2017. The
performance measures are the same for the 2013/15 cycle as shown
on page 70. Relative growth in net rooms supply and RevPAR will be
measured by reference to the three years ending 30 September 2016;
TSR will be measured by reference to the three years ending
31 December 2016.
Following Kirk Kinsell’s resignation with effect from 13 February 2015,
his award will vest in line with the LTIP rules. Mr Kinsell’s initial
maximum award of 51,426 has been reduced accordingly on a pro-rated
basis for the proportion of the performance period in which he remained
employed, as determined by the Committee. The pro-rated award is
shown in the table above. Vesting will not be accelerated.
Scheme interests awarded during 2015
During 2015, awards were granted under the 2015/17 LTIP cycle.
Awards were made to each Executive Director over shares with
a maximum value of 205% of salary using the closing mid-market
share price of 2,670p at the date of grant on 30 March 2015. These
are in the form of conditional awards over IHG shares and do not
carry the right to dividends or dividend equivalents during the
vesting period.
Executive
Director Award date
Maximum
shares
awarded
Market price
per share at
grant
£
Face value
of award
at grant
£000
Number
of shares
received
if minimum
performance
achieved
2015/17 cycle
Richard
Solomons
31 March
2015
60,808 26.70 1,624 12,162
Paul
Edgecliffe-
Johnson
31 March
2015
35,318 26.70 943 7,064
Tracy Robbins 31 March
2015
34,397 26.70 918 6,879
The vesting date for these awards is the day after the announcement
of our Annual 2017 Preliminary Results in February 2018. These
awards will vest and shares will be transferred to the award-holder
in February 2018, to the extent performance targets are met.
The performance measures are the same for the 2013/15 cycle
as shown on page 70. Relative growth in net rooms supply and
RevPAR will be measured by reference to the three years ending
30 September 2017; TSR will be measured by reference to the three
years ending 31 December 2017. Minimum performance is equal
to 20% of the maximum award.
Audited
Pensions entitlements
Richard Solomons built up Defined Benefit pension entitlements
in the InterContinental Hotels UK Pension Plan (IC Plan) and IC
Executive Top-Up Scheme (ICETUS) as a member of both plans,
during his service as an Executive Director prior to the closure
of both plans to future accrual of pension on 30 June 2013.
As disclosed in the 2014 Annual Report, his ICETUS pension
was cashed out and his IC Plan pension was transferred
to an insurance company as part of the buy-out of that plan.
Following the buy-out, the insurance company is responsible
for the payment of pensions and any annual indexation.
The value of his IC Plan pension at the time of the completion of
the buy-out was approximately £72,500 per annum and was payable
at a Normal Retirement Age of 60. According to the rules of the IC
Plan in place immediately prior to the completion of the buy-out,
his accrued pension is to be increased each year by the insurance
company prior to payment broadly in line with Retail Prices Index
inflation, up to a limit of 5% a year. On this basis, the approximate
value of his pension accrued in the IC Plan as at 31 December 2015
would be £74,980 per annum.
As disclosed in the 2014 Annual Report, the Company’s Enhanced
Early Retirement Facility (EERF), under which Mr Solomons was
previously eligible to retire with no reduction to his IC Plan pension
from age 55, is in the process of being phased out. As a result,
Mr Solomons could retire, with no reduction to his Defined Benefit
pension, from approximately age 58 and no earlier. The terms of the
EERF require an executive to obtain Company consent and would
also require the payment by the Group of an additional insurance
premium to secure the benefit entitlement for that executive.
Audited
74 IHG Annual Report and Form 20-F 2015