Vodafone 2008 Annual Report Download - page 73

Dear Shareholder
The Vodafone Remuneration Committee commissioned a review of the reward
package for the executive directors during the 2008 financial year. The objective
was to consider the effectiveness of the reward arrangements in aligning with
our strategy and shareholder interests. As a result, the Remuneration Committee
has updated the remuneration policy, reward structure and market positioning
for the coming years.
The key principles adopted for the updated Vodafone remuneration policy are
as follows:
ensure a competitive total remuneration package as benchmarked against
relevant companies and markets;
provide the opportunity for significant reward upside only if:
truly exceptional performance is delivered; and
participants invest their own money;
deliver a high proportion of total remuneration through performance related
equity payments; and
drive alignment to our strategy, to create shareholder value, and reinforce
shareholder alignment.
In order to fulfil this policy, the following key changes are being made to the
components of directors’ remuneration:
the long term incentive structure is being simplified – awards will be made in
performance shares only;
the vesting of performance shares will be based upon a combination of
operational and equity performance measures; and
participants will be invited to invest their own money in order to maximise their
long term award.
The Remuneration Committee continues to monitor how well incentive awards
made in previous years align with the Company’s performance. We are confident
that forecast rewards are commensurate with performance. This financial year
we have taken the opportunity to further align the Vodafone reward package to
the strategy and shareholder interests. In particular, this Remuneration Report
outlines the detailed changes to the Global Long Term Incentive Plan (“GLTI”)
for the 2009 financial year. This plan operates under the existing plan rules
which were approved in 2006. As a result there will be no separate resolution
for the amendments. However, the Remuneration Committee always takes an
active interest in shareholder views and the voting on the Remuneration Report.
As such, it hopes to receive your support at the AGM on 29 July 2008.
Luc Vandevelde
Chairman of the Remuneration Committee
27 May 2008
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Remuneration Committee
The Remuneration Committee is comprised to exercise independent judgement
and consists only of independent non-executive directors. The Remuneration
Committee had five scheduled and a number of other ad hoc meetings during
the year. For further details, the terms of reference can be found on page 68.
Remuneration Committee
Chairman Luc Vandevelde
Committee members Dr Michael Boskin (left on 23 July 2007)
Simon Murray (joined on 25 July 2007)
Professor Jürgen Schrempp
Anthony Watson
Philip Yea
Management attendees
Chief Executive Arun Sarin
Group HR Director Terry Kramer
Group Reward & Recognition Director Tristram Roberts
External advisers
During the year, Towers Perrin supplied market data and advice on market practice
and governance. PricewaterhouseCoopers LLP and Kepler Associates provided
performance analysis and advice on plan design and performance measures.
The advisers also provided advice to the Company on general human resource
and compensation related matters. In addition, PricewaterhouseCoopers LLP also
provided a broad range of tax, share scheme and advisory services to the Group
during 2008.
Contents
The detail of this Remuneration Report is set out over the following pages, as follows:
Review of the executive directors’ remuneration
How the executive directors were paid in the 2008 financial year
Changes to how the executive directors will be paid in the 2009 financial year
Grants made and payouts received in the 2008 financial year
Other elements of directors’ packages
Non-executive directors’ remuneration
Other considerations
Audited information.
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Vodafone Group Plc Annual Report 2008 71
Directors’ Remuneration