Marks and Spencer 2016 Annual Report Download - page 54

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52
MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT: GOVERNANCE
EXECUTIVE REMUNERATION 2015/16
REMUNERATION
AT A GLANCE
This overview summarises our Policy in action and
shows the alignment between our remuneration
framework, the Company’s performance and
payments to directors for 2015/16.
STRATEGIC PAY ALIGNMENT 2015/16 See more on p58
SINGLE FIGURE REMUNERATION 2015/16 See more on p58
The graph opposite summarises the total
payments made to executive directors
in respect of the 2015/16 fi nancial year.
These fi gures illustrate those detailed in
the single fi gure table later in this report.
Fixed pay comprises salary, benefi ts and
pension benefi ts. Further information on
payments made under the Annual Bonus
Scheme and Performance Share Plan as a
result of one- and three-year performance
respectively is illustrated on page 53, with
full detail provided later in this report.
See more on Single Figure Remuneration
on p58
The table below shows the integration
between M&S’s fi nancial key performance
indicators as shown on page 18 and the
senior remuneration framework for 2015/16.
This clearly demonstrates a strong linkage
between performance metrics, payments
to directors and business performance over
the short- and long-term.
Further details of the alignment with
non-fi nancial and strategic measures
are set out in the table on page 58.
See Annual Bonus Scheme on p53 & p60-61 See PSP on p53 & p62-63
£2,039£1,289
£714
£720 £230
£542
£946 £620
£207
£366
£622 £128
£50
£69
£72
£1,130
£1,019
£821
£1,566
Fixed pay Total bonus Total PSP vested
Marc
Bolland
Steve
Rowe
Helen
Weir
Patrick
Bousquet-Chavanne
Laura
Wade-Gery
Tota
l
£000
See full Strategic alignment of pay on p58
KPI Incentive scheme Impact on incentive payment for 2015/16
Group Revenue Performance
Share Plan
Multi-channel revenue was the only metric above threshold target for the
year resulting in 4.8% vesting of PSP awards under this element.
Underlying Group
Profi t Before Tax (PBT)
Annual Bonus Scheme Underlying Group PBT for the year was £684.1m, and above the target set
for bonus payments to begin. For executive directors, 5.9% of bonus was
payable as a result of 2015/16 PBT results.
Return on Capital
Employed (ROCE)
Performance
Share Plan
Average three-year ROCE performance of 14.7% (which included 15.0%
achievement for 2015/16) was below the threshold required for this element
of the PSP to vest.
Underlying Earnings
per Share (EPS)
Performance
Share Plan
EPS growth was 2.9% over the three years ending in 2015/16 (based on an
outturn of 34.8p for this year) and was below the 5% growth required for
vesting under the PSP.
Free cash fl ow1 Annual Bonus Scheme Free cash fl ow performance for the year was above the maximum target.
The Committee felt it appropriate to adjust downwards the outturn for
bonus purposes as a result of items such as project delays resulting in an
achievement of 18.2% of bonus.
1. Pre shareholder returns and pre acquisition of subsidiary.