National Grid 2016 Annual Report Download - page 72

Key features of policy Annual report on remuneration for 2015/16
Base salary • Targeted broadly at mid-market against
FTSE 11-40 for UK Executive Directors
and general industry and energy services
companies with similar revenue for US
Executive Directors
• Salary increases of 0–7% for 2015
• Salary increases of 2–2.5% for 2016
• Hired Nicola Shaw as new Executive
Director, UK on an annual base salary
of £450,000
• Appointed John Pettigrew as CEO
on an annual base salary of £825,000
Annual Performance
Plan (APP)
• Maximum opportunity is 125% of salary
• 50% paid in cash, 50% paid in shares,
which must be retained until later of
two years and meeting shareholding
requirement
• Subject to both clawback and malus
• 70% based on financial metrics
(35% EPS, 35% RoE), 30% based
on individual objectives
• Group RoE for CEO and Finance Director;
UK RoE for Executive Director, UK;
US RoE for Executive Director, US
• Individual objectives cover: safety and
compliance; Group and financial strategy;
business growth; operational excellence;
customer experience; employee
engagement; capability development;
and stakeholder relations
Long Term
Performance Plan
(LTPP)
• Maximum award level is 350% of
salary for CEO and 300% for other
Executive Directors
• Vesting subject to long-term performance
conditions. Shares must be retained
until later of two years from vesting and
meeting shareholding requirement
• Subject to both clawback and malus
• 50% value growth, 50% RoE
• Group RoE for CEO and Finance Director;
even split of Group and UK RoE for
Executive Director, UK; even split of Group
and US RoE for Executive Director, US
• Three-year performance period
Pension and
other benefits
• External appointees participate in
Defined Contribution (DC) plan or cash
in lieu of pension; internal appointees
retain current benefits, subject to capping
of pensionable pay increases for Defined
Benefit (DB) plans
• Pensionable pay is salary only in UK
and salary and APP in US in alignment
with the market
• Other benefits as appropriate
• UK DB (Steve Holliday, John Pettigrew):
maximum of two-thirds final capped
pensionable pay or (Steve Holliday)
one thirtieth accrual
• UK cash allowance (Andrew Bonfield):
30% of salary
• US DC (Dean Seavers): 9% of
pensionable pay with additional match
of up to 4%
• Other benefits include private medical
insurance, life assurance, and, for
UK Executive Directors, either a fully
expensed car or a cash alternative to a
car and the use of a driver when required
Share ownership
guidelines
• 500% of salary for CEO
• 400% of salary for other
Executive Directors
• Steve Holliday and Andrew Bonfield
have both met their shareholding
requirements
• John Pettigrew and Dean Seavers were
appointed to the Board relatively recently,
and therefore have not yet met their
shareholding requirements
At a glance continued
70 National Grid Annual Report and Accounts 2015/16 Corporate Governance
Corporate Governance continued