Tesco 2014 Annual Report Download - page 51

Download and view the complete annual report

Please find page 51 of the 2014 Tesco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 147

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147

Shareholding guidelines and share ownership
Share ownership guidelines
•FourtimesbasesalaryfortheCEO
•ThreetimesbasesalaryfortheCFO
•Thepurposeistocreatealignmentwiththeinterests
ofshareholders
•Thisrequirementisattheupperendoftypicalmarket
practiceforsimilar-sizedcompanies
TheRemunerationCommitteebelievesthatasignificantshareholdingbyExecutiveDirectorsalignstheirinterestswithshareholdersand
demonstratestheirongoingcommitmenttothebusiness.
Policy for calculating shareholding
•Shares included–Sharesheldoutrightwillbeincludedinthecalculationofshareholdingguidelinesaswillsharesheldbyan
Executive’sspouse.Sharesheldinplanswhicharenotsubjecttoforfeiturewillbeincluded(onanetoftaxbasis)forthepurposesof
calculatingExecutiveDirectors’shareholdings.Vestedbutunexercisedmarketvalueshareoptionsarenotincludedinthecalculation.
• Five years for new appointees to build shareholdings–Newappointeeswillbeexpectedtoachievethisminimumlevelofshareholding
withinfiveyearsofappointment.Whentheshareholdingguidelineswereincreasedin2011,Executivesweregivenaperiodoffiveyears
tomeetthisenhancedrequirementandthereforeshouldmeettherequirementbyJune2016.
•PSP participation may be subject to maintaining holding–Fullparticipationinthelong-termPerformanceSharePlanwill
generallybeconditionaluponmaintainingtheminimumshareholding.
•Holding of 50% of vesting awards until requirement met –WhereanExecutiveDirectordoesnotmeettheshareholding
requirementtheywillberequiredtohold,andnotdisposeof,atleast50%ofthenetnumberofshareswhichvestunderincentive
arrangementsuntiltheymeetthisrequirement.
Giventheimportanceofowningshares,theExecutiveCommitteeandover100otherseniormanagersarealsorequiredtobuilda
holdingofTescoshares.
ThechartbelowillustratesthevalueofExecutiveDirectors’shareholdings,basedonthethree-monthaveragesharepriceto
22February2014of330.3ppersharecomparedtotheshareholdingguideline.
Philip Clarke
Laurie McIIwee
EIP shares
(vested and unvested)
Shares and unexercised
vested PSP awards
Shareholding guideline
£million
0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0
Shares held by Executive Directors at 22 February 2014
Thistablehasbeenaudited.
Director
Shareholding
guideline
(%ofsalary)
Shareholding
guideline
(numberof
shares)
Number/value
ofshares
counted
towards
shareholding
guideline1
Guideline
met?
Ordinary
Sharesheld
at22February
20142
Interestsinshare
incentiveschemes,
thataresubject
tonofurther
performance
conditionsat22
February20143
Interestin
marketvalue
andSharesave
shareoptions
at22February
20144
Interestsin
shareincentive
schemes,
subjectto
performance
conditions,
at22February
20145
OrdinaryShares
23February
20132
PhilipClarke 400% 1,386,673 2,288,591
£7. 56 m
(6.6xsalary)
Yes 1,832,038 893,874 1,90 9,112 2,737,611 1,829,467
LaurieMcllwee 300% 8 05,136 344,756
£1.14m
(1.3xsalary)
No 81,219 517,8 51 498,140 1,734,605 76,390
1 Basedonathree-monthaveragesharepriceto22February2014of330.3p.
2 Includessharesheldundertheall-employeeShareIncentivePlanandsharesheldbyconnectedpersons.
3  IncludesvestedbutunexercisedandunvestednilcostoptionsheldunderthedeferredbonusplanaswellasvestedbutunexercisednilcostoptionsunderthePerformanceSharePlan.
4 
IncludesawardsundertheDiscretionaryShareOptionPlan(‘DSOP’)andundertheTescoSharesave.OptionsgrantedundertheSharesavemaybegrantedatupto20%
discountonthemarketpriceatgrant.ThelastawardsundertheDSOPweregrantedtoExecutiveDirectorsin2010.Nofurtherawardswillbemadeunderthisplan.
5 IncludesunvestedawardsunderthePSPwhichremainsubjecttoperformance.
48 Tesco PLC Annual Report and Financial Statements 2014
Directors’ remuneration report continued
Annual remuneration report