Tesco 2015 Annual Report Download - page 64

Policy table
The following sets out our Directors’ Remuneration Policy (the ‘Policy’). This Policy will be put forward for shareholder approval at the 2015 AGM
on 26 June 2015 and will apply to payments made from this date. Until this time the Policy approved on 27 June 2014 will continue to apply.
Further details regarding the operation of the Policy for the 2015/16 financial year can be found on pages 49 and 50 of this report.
Element Purpose and
link to strategy
Operation Maximum
opportunity
Performance
measures
Changes from
previous policy
Base salary • The role of base salary
is to support the
recruitment and
retention of Executive
Directors of the calibre
required to develop and
deliver the strategy
• Base salary provides
fixed remuneration for
the role, which reflects
the size and scope of
the Executive Directors’
responsibilities and
their experience
• The Committee sets base salary
taking into account:
– The individual’s skills and
experience and their performance
– Salary levels at leading FTSE
companies and other large
consumer business companies
in the UK and internationally
– Pay and conditions elsewhere
in the Group
• Base salary is normally reviewed
annually with changes effective from
1 July but may be reviewed more
frequently if the Committee
determines this is appropriate
• While there is no maximum
salary, increases will normally
be in line with the typical level
of increase awarded to other
employees in the Group
• However, increases may be
above this level in certain
circumstances such as:
– Where a new Executive
Director has been appointed
to the Board at a lower than
typical market salary to allow
for growth in the role then
larger increases may be
awarded to move salary
positioning closer to typical
market level as the Executive
gains experience
– Where an Executive Director
has been promoted or has had
a change in responsibilities,
salary increases in excess of the
above limit may be awarded
– Where there has been
a significant change in
market practice
n/a • No change from
previous policy
Pension • To provide an
appropriate level
of retirement benefit
as part of a holistic
benefit package
• Executive Directors receive a
cash allowance in lieu of pension
• The Committee may determine that
alternative pension provisions will
operate for new appointments to the
Board. When determining pension
arrangements for new appointments
the Board will give regard to the cost
of the arrangements, market practice
and the pension arrangements
received elsewhere in the Group
• Where pension is provided as
a salary supplement or into a defined
contribution scheme it will not
exceed the maximum amount stated
in the next column. Where a defined
benefit pension is provided, the
value will vary reflecting the nature
of such schemes
• Maximum cash in lieu of
pension of 25% of base salary
n/a • Policy amended
to reflect the fact
that new Executive
Directors receive a
cash payment in lieu
of salary rather than
participate in the
defined benefit
pension plan
Benefits • To provide a market-
competitive level of
benefits for our
Executive Directors
• The Committee sets benefit provision
at an appropriate market-competitive
level taking into account the
individual’s home jurisdiction, the
jurisdiction in which the individual
is based, typical practice and the
level of benefits provided for other
employees in the Group
• Core benefits – Benefits currently
include but are not limited to a
company car or car allowance,
fuel, private use of a chauffeur,
life assurance, disability and health
insurance (for the Executive Director
and his family), health screening,
Directors’ and Officers’ liability
insurance and provision of indemnity,
security, club membership and
staff discount on the same basis
as other employees
• The overall level of benefits
will depend on the cost of
providing individual items and
the individual’s circumstances
and therefore there is no
maximum level of benefit
• When determining the level
of benefits the Committee will
consider the factors outlined
in the ‘Operation’ column
n/a • No change from
previous policy
62 Tesco PLC Annual Report and Financial Statements 2015
Directors’ remuneration report continued
Directors’ remuneration policy