Vodafone 1999 Annual Report Download - page 41

Remuneration Report of the Board
financial years ending 31 March 2001. If an executive chooses not to accept the provisional award of shares, he may
receive a cash bonus up to 25% of salary.
For the LTIP, the independent trustee of the Vodafone Group Employee Trust, a discretionary trust, purchases ordinary
shares in Vodafone Group Plc in the market. Shares are then awarded conditionally to eligible executive directors and
senior executives at the beginning of a three year period, the ultimate vesting of the award being conditional upon the
achievement of performance criteria set by the Remuneration Committee for that three year period. If the performance
criteria are met, the shares will be transferred from the Vodafone Group Employee Trust to the executive directors and
senior executives at nil consideration. Details of the benefits provided to the executive directors under the STIP and the
LTIP are in tables here.
All executive directors are contributing members of the Vodafone Group Pension Scheme, which is a scheme approved by
the Inland Revenue. P R Bamford, whose benefits under the scheme are restricted by Inland Revenue earnings limits, also
participates in a defined contribution funded unapproved retirement benefits scheme in order to bring his benefits into line
with those of the other executive directors. Details of the salaries and benefits of all the directors are set out in the table
here. A separate table shows the pension benefits earned by the directors in the year.
Annual salaries are reviewed each year with effect from 1 July and the Remuneration Committee takes into account not
only the individual performances and contributions of each of the executive directors but also the overall performance of the
Group, the earnings per share of the Group, the level of increases awarded to staff throughout the Group and information
provided to it on the salaries for similar roles in comparable companies. If the responsibilities of executive directors change
during the year, the Committee meets to discuss and review remuneration packages, including salaries, at that time.
Executive share ownership
The Remuneration Committee believes that share ownership by executive directors increases the link between the interests
of the directors and the interests of the Company’s shareholders. The Company’s executive share option schemes, in which
over three hundred of the Group’s directors, executives and senior managers participate, are operated on the basis that
options over the Company’s shares may be granted once each year at, for directors, a multiple of one times taxable
earnings subject to an overall maximum holding equivalent to four times taxable earnings at the date of grant. The savings
related share option scheme permits employees to save a fixed sum each month, up to a maximum of £250 per month, for
three or five years and to use the proceeds of the savings to exercise options granted at a price 20% below the market
price of the shares at the beginning of the savings period. The profit sharing share scheme similarly permits eligible
employees to contribute up to 5% of their salary each month, up to a maximum of £665 per month, to enable trustees of the
scheme to purchase shares on their behalf, with an equivalent number of shares being purchased for the employee by the
Company. All the executive directors participate in each of the share schemes. Share options are analysed in the table here.
Service contracts
The Remuneration Committee has determined that new appointments of executive directors to the Board will be on the
terms of a contract which can be terminated by the Company at the end of an initial term of two years or at any time
thereafter on one year’s notice. Contracts on such a basis were granted to J M Horn-Smith on 4 June 1996, to C C Gent
and K J Hydon on 1 January 1997 and to P R Bamford on 1 April 1998, each of which is now, therefore, terminable by the
Company on one year’s notice. The service contracts of all the executive directors contain a provision increasing the period
of notice required from the Company to two years in the event that the contract is terminated by the Company within one
year of a change of control of the Company. The directors are required to give the Company one year’s notice if they wish
to terminate their contracts.
Non-executive directors
http://www.vodafone.com/download/investor/reports/annual99/remuneration_report_of_the_board.htm (2 of 7)30/03/2007 00:09:24