Tesco 2009 Annual Report Download - page 57

55
DIRECTORS’ REMUNERATION REPORT
Tesco PLC Annual Report and Financial Statements 2009
To find out more go to
www.tesco.com/annualreport09
Role of the Committee
The Committee’s purpose is to:
determine and recommend to the Board the remuneration policy for the •
Chairman and Executive Directors;
ensure the level and structure of remuneration is designed to attract, •
retain, and motivate the Executive Directors needed to run the
Company;
agree performance frameworks and targets, and review performance •
against these;
monitor the level and structure of remuneration for senior management; •
and
ensure the remuneration relationship between the Executive Directors •
and senior executives of the Company below this level is appropriate.
The Committee normally meets at least four times a year and has a
rolling schedule of items within its remit. In the financial year ended
28 February 2009 the Committee met ten times. During the year the
Committee reviewed its own performance and agreed steps to enhance
its effectiveness.
Governance Oversight Committee
The Governance Oversight Committee (GOC) has been established
to review and report at the end of each financial year on the allocation
of capital and other Group resources. The GOC comprises the Senior
Independent Director of the Company (who chairs the GOC), the
Chairman of the Audit Committee and the Chairman of the Remuneration
Committee. The Chairman attends the GOC and the Company Secretary
serves as its secretary. The GOC reports its findings to the Remuneration
Committee each year. The Remuneration Committee takes these into
account along with the view of the Audit Committee to ensure that financial
performance against targets is indicative of strong and robust business
performance. If appropriate, vesting under the plans may be adjusted by the
Remuneration Committee (in respect of Executive Directors) or the Board (in
respect of all other employees who are participants). In accordance with the
Combined Code, any such adjustments to vesting for Executive Directors will
be reported to shareholders in the Remuneration Report at the relevant time.
Compliance
In carrying out its duties, the Remuneration Committee gives full
consideration to best practice. The Committee was constituted and operated
throughout the period in accordance with the principles outlined in the
Listing Rules of the Financial Services Authority derived from the Combined
Code on Corporate Governance. The auditors’ report, set out on page 67,
covers the disclosures referred to in this report that are specified for audit by
the Financial Services Authority. This report also complies with disclosures
required by the Director Remuneration Report Regulations 2002. Details
of Directors’ emoluments and interests are set out on pages 55 to 64 of
this Report.
Charles Allen
Chairman of the Remuneration Committee
Tables 1-11 are audited information.
Table 1 Directors’ emoluments
Fixed emoluments Performance-related emoluments
Short-term
Short-term deferred Total Total
Salary Allowances Benefits3 cash shares Long-term4 2008/9 2007/8
£000 £000 £000 £000 £000 £000 £000 £000
Executive Directors
Richard Brasher 778 – 65 712 712 – 2,267 2,116
Philip Clarke 778 – 38 712 712 480 2,720 2,749
Andrew Higginson 778 – 59 712 712 493 2,754 2,810
Sir Terry Leahy 1,356 – 85 1,238 1,547 876 5,102 5,472
Tim Mason – base salary1 778 312 218 712 712 493 3,225 3,797
Tim Mason – supplement1 200 – – 180 180 – 560 733
Tim Mason – total 978 312 218 892 892 493 3,785 4,530
Laurie McIlwee2 38 – 5 24 24 – 91 –
Lucy Neville-Rolfe 538 – 70 499 499 – 1,606 1,451
David Potts 778 – 37 712 712 480 2,719 2,718
Non–executive Directors
Charles Allen 91 – – – – – 91 85
Patrick Cescau2 5 – 5 –
Rodney Chase 129 – – – – – 129 118
Karen Cook 73 – – – – – 73 67
E Mervyn Davies 55 – – – – – 55 79
Harald Einsmann 73 – – – – – 73 67
Ken Hydon 91 – – – – – 91 85
Carolyn McCall 10 – – – – – 10 67
David Reid (Chairman) 601 – 56 – – – 657 675
Jacqueline Tammenoms Bakker2 9 – – – – – 9 –
Total 7,159 312 633 5,501 5,810 2,822 22,237 23,089
1 Tim Mason’s salary is made up of a base salary and a non-pensionable salary supplement (shown separately). Allowances are made up of compensation payments for additional tax due on
equity awards made prior to his move to the US. Tim Mason’s benefits are made up of car, travel, medical, tax related costs and services and free shares awarded under the all employee
Share Incentive Plan.
2 Laurie McIlwee, Patrick Cescau and Jacqueline Tammenoms Bakker were appointed during the year. Figures in table 1 are shown from their date of appointment.
3 With the exception of Tim Mason, benefits are made up of car benefits, chauffeurs, disability and health insurance, staff discount, gym/leisure club membership and free shares awarded
under the all employee Share Incentive Plan.
4 The long-term bonus figures shown in table 1 relate to the additional 12.5% enhancements allocated in May 2008 on short-term and long-term awards under the old bonus scheme.
The long-term bonuses awarded on 8 July 2008 under the Performance Share Plan were awarded in the form of nil cost options with the exception of Tim Mason who received an unfunded
promise to deliver shares. Details of these awards are shown in table 6.