Tesco 2012 Annual Report Download - page 71

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At a glance summary of Executive Directors’ remuneration for 2012/13
Element Link to strategy/performance measures CEO Other Directors Changes to the policy
for 2012/13
Base salary Set at levels to attract and retain talented
individuals.
When determining pay the Committee
examines salary levels at the major retailers,
the leading FTSE companies andgives
consideration to appropriate international
competitors.
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Affairs Director –
,)/"&&&$
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have been similar to the increase awarded
to other employees.
Annual bonus
(One-year
performance)
(Cash and
shares)
70% of bonus based on underlying profit
performance.
30% of bonus based on performance
against key strategic objectives.
These measures have been selected as they
are considered to be closely aligned to
long-term shareholder value creation.
All objectives are specific and measurable and
anumber relate to financial performance.
Strategic objectives include specific measures
based on environmental, social and governance
(‘ESG’) factors, an integral part of the
corporate strategy. The inclusion of these
specific measures will help reinforce positive
and responsible behaviour bysenior
management in relation to the underlying
drivers of performance.
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of 250% of base salary.
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of 200% of base salary.
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 +&_dcash.
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 Clawback applies to deferred shares to allow the
Committee to scale back deferred share awards in
the event that results are materially misstated.
Performance
share plan
(Three-year
performance)
(Shares)
Based on a matrix of ROCE/EPS growth
performance.
To enhance shareholder value by incentivising
Executives to grow earnings over the long
term while maintaining a sustainable level
ofreturn of capital.
To provide alignment of the economic interests
of Executives and our shareholders and to act as
a retention tool.
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275% of base salary.
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225% of base salary.
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 Clawback provisions apply to awards, allowing
the Committee to scale back awards in the event
that results are materially misstated.
 CWn_ckcWmWhZie\kfje200% of base salary
can also be granted under the Discretionary
Share Option Plan. However, it is not intended
that this plan will be used and it will only be used
in exceptional circumstances.
Pension
(Cash)
To provide a market-leading retirement
benefit that will foster loyalty and retain
experience, which supports our culture
ofdeveloping talent internally.
A key incentive and retention tool throughout
the organisation.
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pension of up to two-thirds of base salary at
retirement with a 10% employee contribution.
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up to approved HMRC limits, with the remainder
provided through secured unfunded
arrangements (other than for Tim Mason).
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currently consulting with
employees regarding
some changes to the
pension scheme which
will also impact Executive
Directors. See page 68
for more details.
Benefits To provide a market-competitive level of
benefits for our Executive Directors.
 Core benefits – Benefits include car allowance,
life assurance, disability and health insurance,
andstaff discount.
 All employee share plans – Executives are
eligible to participate in the Company’s
all-employee share schemes on the same
terms asUK employees.
 US CEO allowance – The US CEO receives a net
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costs incurred in relation to his US assignment.
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Remuneration policy for Executive Directors
Tesco PLC Annual Report and Financial Statements 2012 67
STRATEGIC REVIEW PERFORMANCE REVIEW GOVERNANCE FINANCIAL STATEMENTSOVERVIEW
General information Directors’ remuneration reportBoard of Directors Principal risks and uncertainties Corporate governance