Vodafone 2007 Annual Report Download - page 84

82 Vodafone Group Plc Annual Report 2007
Board’s Report to Shareholders on Directors’ Remuneration
continued
In addition, an allowance of £6,000 is payable each time a non-Europe
based non-executive director is required to travel to attend Board and
Committee meetings, to reflect the additional time commitment involved.
A full review of non-executive directors’ fees was carried out in February
2007 taking into account market data and current market trends provided
by Towers Perrin. The previous review was in 2005. As a result of this review
the revised fees payable from 1 April 2007 are as follows:
Fees payable
from 1 April 2007
£’000
Chairman 525
Deputy Chairman and Senior Independent Director 145
Basic Non-Executive Director fee 105
Chairmanship of Audit Committee 25
Chairmanship of Remuneration Committee 20
Chairmanship of Nominations and Governance Committee 15
Details of each non-executive director’s remuneration for the 2007 financial
year are included in the table on page 83.
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 use of a car and a driver whenever
and wherever he is providing his services to or representing the Company.
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. All current executive directors’ contracts have an indefinite term (to
normal retirement date) and one year notice periods. 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.
All the UK based executive directors have, whilst in service, entitlement
under a long term disability plan from which two-thirds of base salary, up to
a maximum benefit determined by the insurer, would be provided until
normal retirement date.
Vittorio Colao
Vittorio Colao was appointed as the Company’s Deputy Chief Executive with
effect from 9 October 2006.
Thomas Geitner
Thomas Geitner left the Company on 31 December 2006 and received
salary and compensation for loss of office in accordance with his legal
entitlement. The total payment was £1.7 million. His pro-rated annual
bonus for the 2007 financial year was waived in return for a series of six
equal monthly payments of £95,723. These payments are contingent on
Mr Geitner not joining a competitor. The Remuneration Committee has
exercised discretion to allow him access to long term incentive awards,
pro-rated for time and performance. He is eligible to draw his pension from
1 January 2008 as set out in the pensions section of this report on page 84.
Sir Julian Horn-Smith
Sir Julian Horn-Smith retired after the AGM on 25 July 2006. He received his
bonus for the year to date of retirement, payment in lieu of holiday accrued
and awards vested under his long term incentive plans under the normal
rules for retirement.
Peter Bamford
Peter Bamford left the Company’s on 1 April 2006. He received compensation
for loss of office in accordance with his legal entitlement of £1.06 million.
Fees retained for non-executive directorships in other companies
Some executive directors hold positions in other companies as
non-executive directors. The fees received in respect of the 2007 financial
year and retained by directors were as follows:
Fees retained by the
Company in which individual in the 2007
non-executive directorship is held financial year £’000(1)
Arun Sarin The Bank of England 6.0
Thomas Geitner(2) Singulus Technologies AG 7.7
Sir Julian Horn-Smith(3) Smiths Group plc 17.0
Lloyds TSB Group plc 28.6
Sage Group plc 14.0
Notes:
(1) Fees were retained in accordance with Company policy.
(2) Fees were retained in the period to 31 December 2006.
(3) An option over 400,000 shares granted to Sir Julian in November 2005 by China Mobile Limited
for his duties as non-executive director, and held for the benefit of the Company, lapsed on his
retirement on 25 July 2006. Fees shown are for the period 1 April to 25 July 2006.
Chairman and non-executive directors
Lord MacLaurin retired as the Company’s Chairman following the AGM on
25 July 2006. Lord MacLaurin continued to receive fees in accordance with
his service contract until 31 December 2006. The Company has entered
into an agreement with Lord MacLaurin that he will provide advisory
services to the Company for a period of three years following his retirement.
During this period he will receive an annual fee of £125,000, which he has
confirmed to the Company he intends to donate to charity.
Sir John Bond was appointed as Chairman of the Company with effect from
the AGM on 25 July 2006. As Chairman for 2006 he received a pro-rated fee
equivalent to £475,000 per annum having received standard non-executive
director fees up to the date of appointment. His appointment is indefinite
and may be terminated by either party on one year’s notice.
Paul Hazen stepped down from the role of Deputy Chairman following the AGM
on 25 July 2006. John Buchanan was appointed into this role on the same date.
Penny Hughes stepped down from the Board on 25 July 2006.
Anthony Watson, Alan Jebson and Nick Land were appointed to the Board as
non-executive directors with effect from 1 May 2006, 1 December 2006 and
1 December 2006 respectively, and hold office on the same terms as other
non-executive directors.
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 AGM (for 15 minutes prior to the
meeting and during the meeting).
TSR performance
The following chart shows the performance of the Company relative to the
FTSE100 index and the FTSE Global Telecommunications index, which are
the most relevant indices for the Company.
Graph provided by Towers Perrin and calculated according to a methodology that is compliant with
the requirements of Schedule 7A of the Companies Act of 1985. Data Sources: FTSE and Datastream
Note: Performance of the Company shown by the graph is not indicative of vesting levels under the
Company’s various incentive plans.
20
40
60
80
100
120
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160
180
Mar07Mar 06Mar 05Mar 04Mar 03Mar 02
Value of hypothetical £100 holding
Historical TSR Performance
Growth in the value of a hypothetical £100 holding up to March 2007
FTSE Global Telecoms and FTSE 100 comparison based on spot values.
FTSE Global Telecoms
FTSE 100 Vodafone Group Plc