Marks and Spencer 2016 Annual Report Download - page 65

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FINANCIAL STATEMENTS OUR BUSINESSOUR PERFORMANCEGOVERNANCE
63
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
PSP AWARDS TO BE MADE IN 2016/17
The Committee believes in the importance
of strategically-aligned incentives so
that executive directors are motivated to
deliver the commercial success of M&S.
The Committee’s aim is to ensure realistic
and sustainable targets to support the
delivery of such success. The Committee
therefore intends to make awards under
the PSP in November 2016 shortly after
the announcement of the Interim results,
having allowed Steve Rowe and his
leadership team su cient time to develop
M&S’s long-term business plan. This will
ensure that PSP targets are rigorously
reviewed in the context of this new
leadership, rewarding stretching yet
achievable performance designed to
deliver increased shareholder value.
Such awards will vest three years after
the date of grant.
M&S remains committed to clear and
transparent communication and
intends to report back to shareholders
by November 2016 with more detail on
these awards. Awards will remain in line
with the current Remuneration Policy,
fi rst approved by shareholders in 2014.
FIGURE 18: PERFORMANCE CONDITIONS FOR OUTSTANDING PSP AWARDS (audited)
The details of outstanding PSP awards are set out in the table on pages 65 and 66. These awards vest subject to the extent that the
following three-year performance conditions are met.
2014/15 Award
Annualised
EPS growth
(%)
ROCE
(%)
Revenue (£)5
UK2Multi-channel3International4
50% of award 20% of award 10% of award 10% of award 10% of award
Threshold performance15.0% 15.0% £8,900m £1,100m £1,400m
Maximum performance112.0% 16.5% £9,600m £1,300m £1,800m
1. Vesting is a straight line between ‘threshold’ at which 20% vests and ‘maximum’ performance at which 100% vests.
2. Excluding Multi-channel.
3. Net of VAT/gross of returns.
4. Excluding Multi-channel/including Republic of Ireland.
5. Measured at the end of 2016/17.
Annualised EPS
growth (%)
ROCE
(%)
Financial strategic scorecard
2015/16 Award
International
sales growth2
(%)
M&S.com sales
growth3
(%)
UK
Clothing & Home
gross margin4
Cumulative
free cash fl ow5
50% of award 20% of award 7.5% of award 7.5% of award 7.5% of award 7.5% of award
Threshold performance15.0% 15.0% 5.0% 11.0% – £1,350m
Maximum performance112.0% 16.5% 15.0% 18.0% – £1,650m
1. Vesting is a straight line between ‘threshold’ at which 20% vests and ‘maximum’ performance at which 100% vests.
2. Excluding M&S.com/including Republic of Ireland.
3. Net of VAT and post store returns.
4. Targets relating to UK Clothing & Home gross margin are deemed by the Board to be too commercially sensitive to disclose, but will be retrospectively disclosed in the report relating
to the end of the relevant three-year performance period.
5. Pre dividends and returns
ALL-EMPLOYEE SHARE SCHEMES (audited)
Executive directors may participate in both ShareSave, the Company’s Save As You Earn scheme, and ShareBuy, the Company’s
Share Incentive Plan on the same basis as all other eligible employees. Further details of the Schemes are set out in note 13 to the
financial statements on pages 106 and 107.
EXECUTIVE DIRECTORS’ REMUNERATION CONTINUED