Vodafone 2004 Annual Report Download - page 60

Remuneration or Nominations and Governance). No increases are planned in 2004.
Details of each non-executive director’s remuneration are included in the table on
page 59.
Non-executive directors do not participate in any incentive or benefit plans. The
Company does not provide any contribution to their pension arrangements. The
Chairman is entitled to the provision of a fully-expensed car or car allowance.
Service contracts and appointments of directors
Executive directors
The Remuneration Committee has determined that, after an initial term that may be of
up to two years duration, executive directors’ contracts should thereafter have rolling
terms and be terminable on no more than one year’s notice. No payments should
normally be payable on termination other than the salary due for the notice period and
such entitlements under incentive plans and benefits that are consistent with the
terms of such plans.
Details of the contract terms of the executive directors follow:
Contract start date Unexpired term* Notice period
Arun Sarin 1 April 2003 Indefinite One year from
1 April 2004
Peter Bamford 1 April 1998 Indefinite One year
Vittorio Colao 22 July 1996 Indefinite Up to one year
Thomas Geitner 5 June 2000 To 31 May 2005 Contract expires
31 May 2005
Julian Horn-Smith 4 June 1996 Indefinite One year
Ken Hydon 1 January 1997 Indefinite One year
* until normal retirement age
At the time of his appointment to the Board, Thomas Geitner was employed under a
fixed term five-year service contract with Mannesmann AG (now Vodafone Holding
GmbH), which was the normal contract arrangement for Mannesmann AG board
members. Mr Geitner agreed in 2001, without recompense, to accept amended terms
which provided that following the expiry of the current contract on 31 May 2005 the
new contract would have a one year term.
Executive directors’ service contracts do not provide for termination payments that
extend entitlements beyond payments due for the remainder of the contract term.
In accordance with the National Collective Labour Agreement for dirigenti for industrial
companies in Italy, Vittorio Colao is entitled to receive an end of service indemnity.
All the UK-based executive directors have, whilst in service, entitlement under a long
term disability plan from which two-thirds of base salary would be provided until
normal retirement date. In the event of disability, Vittorio Colao is entitled to a lump
sum payment of 1207,000, whilst Thomas Geitner would receive his normal
retirement pension based on his accrued service.
Some executive directors hold positions in other companies as non-executive
directors. The fees received in respect of the 2004 financial year and retained by
directors were as follows:
Company in which non-executive Fees Retained by the individual
directorship is held in 2003/04 (£’000)
Arun Sarin Cisco Systems, Inc 18.8
Vittorio Colao RAS SpA 19.2
Thomas Geitner Singulus Technologies AG 33.5
Julian Horn-Smith Smiths Group Plc 36.6
Ken Hydon Reckitt Benckiser Plc 13.3
Tesco Plc 6.3
*Fees were retained in accordance with Company policy
Chairman and non-executive directors
After completing an initial three-year term, in March 2003, the Chairman accepted the
invitation of the Nominations and Governance Committee and the Board to continue in
office. The appointment continues indefinitely and may be terminated by either party
on one year’s notice.
Non-executive directors including the Deputy Chairman, are engaged on letters of
appointment that set out their duties and responsibilities. The appointment of non-
executive directors may be terminated without compensation.
The terms and conditions of appointment of non-executive directors are available for
inspection by any person at the Company’s registered office during normal business
hours and at the Annual General Meeting (for 15 minutes prior to the meeting and
during the meeting).
John Buchanan and Luc Vandevelde were appointed to the Board as non-executive
directors with effect from 1 April 2003 and 1 September 2003 respectively. Both hold
office on the same terms as other non-executive directors.
Appointment of new Chief Executive and
retirement of previous Chief Executive
Sir Christopher Gent formally stepped down as Chief Executive at the end of the AGM
on 30 July 2003. To enable a smooth transition, he continued as an adviser until he
retired from the Company on 31 December 2003. Sir Christopher received no
severance payment and his entitlements under the incentive and retirement plans in
which he participated were determined by the standard rules applicable to retirement.
All long term incentive awards under the current remuneration policy and the previous
global market-related policy provide for awards to be pro-rated for both time and
performance in the event of retirement. Sir Christopher received no salary increase in
the 2004 financial year, nor did he participate in the short term incentive plan after
30 July 2003. No long term incentive awards were made to him during 2003/04. In
accordance with the standard Rules of the Scheme he received an immediate pension
based on his accrued benefit with no actuarial penalty or any enhancement.
The Remuneration Committee agreed that ownership of Sir Christopher Gent’s
company car would transfer to him on retirement. The taxable value of the car is
included in the benefits column of the Remuneration table.
Arun Sarin commenced employment as Chief Executive Designate on 1 April 2003. He
became Chief Executive on 30 July 2003.
Arun Sarin was employed with a basic salary of £1.1 million. The incentives and
benefits that formed the remainder of his remuneration package are consistent with
the existing executive director remuneration policy described previously and
comparable in quantum to those received by Sir Christopher Gent for the year ended
31 March 2003. In accordance with the Company’s normal policy it was agreed to
meet the costs of Arun Sarin relocating to the UK and these costs are included in the
benefits column of the Remuneration table.
Arun Sarin has entered into a service contract that 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.
Arun Sarin is required to give the Company one year’s notice if he wishes to terminate
the contract. There are no specific provisions for termination payments under the
terms of the service contract.
Vodafone Group Plc Annual Report 2004
58
Board’s Report to Shareholders on Directors’ Remuneration continued