Vodafone 2010 Annual Report Download - page 59

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Governance
Vodafone Group Plc Annual Report 2010 57
Dear Shareholder
This year the work of the Remuneration Committee took place against a background
of very challenging business conditions in the global economy. In this environment
the Committee maintained its focus on ensuring that the Company’s remuneration
policies in general, and the packages of the executive directors in particular, were
designed to allow the Company to recruit, retain and motivate its talented people and
to ensure those people were fully incentivised to maximise shareholder value.
At the start of the year a key focus for the Company was the generation of cash flow.
This was reflected in the weighting applied to this measure in the short-term plan. As
the focus now moves more to growing revenue and market share the weightings
have been modified for the coming year to appropriately reflect this change.
The structure of the long-term plan has also been reviewed and the Committee
believes that the current design remains appropriate with its strong continued focus
on both cash flow and total shareholder return.
As well as considering the current package, the Remuneration Committee continues
to monitor how well incentive awards made in previous years align with the
Company’s performance. In this regard, the Committee is confident that there is a
strong link between performance and reward.
The Remuneration Committee has appreciated the dialogue and feedback from
investors and has taken account of their views when reviewing the incentive designs.
This has been seen in two ways: i) in the alignment of the senior leadership population
with the Board and the Executive Committee through the cascading down of the free
cash flow performance condition in the long-term plan; and ii) in the greater
differentiation that has been built into both short and long-term plans with individual
performance being more rigorously measured and directly affecting award sizes. The
Committee will continue to take an active interest in investors’ views and the voting
on the remuneration report. As such, it hopes to receive your support at the AGM on
27 July 2010.
Luc Vandevelde
Chairman of the Remuneration Committee
18 May 2010
Contents
The detail of this remuneration report is set out over the following pages, as follows:
Page 57 – Remuneration Committee
Page 58 – Overview of remuneration philosophy
Page 59 – The remuneration package
Page 61 – Awards made to executive directors during the 2010 financial year
Page 61 – Amounts executive directors will actually receive in the 2011 financial year
Page 62 – Other considerations
Page 63 – Audited information for executive directors
Page 66 – Non-executive directors remuneration
Page 66 – Audited information for non-executive directors’ serving during the year
ended 31 March 2010
Page 67 – Beneficial interests
Remuneration Committee
The Remuneration Committee is comprised to exercise independent judgement and
consists only of independent non-executive directors. For further details, the terms
of reference can be found on page 53.
Remuneration Committee
Chairman Luc Vandevelde
Committee members Simon Murray
Anthony Watson
Philip Yea
Management attendees
Chief Executive Vittorio Colao
Group HR Director Ronald Schellekens
Group Reward Director Tristram Roberts (until 31 October 2009)
Head of Group Reward Adam Parsons (1 November 2009 to 31 March 2010)
External advisors
During the year Towers Watson supplied market data and advice on market practice
and governance. PricewaterhouseCoopers LLP provided performance analysis and
advice on plan design and performance measures. Both advisors were appointed by
the Remuneration Committee in 2007.
The advisors 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 the 2010 financial year.
As noted in his biographical details on page 49 of this annual report, during the year
Philip Yea joined an advisory board for PricewaterhouseCoopers LLP. In light of their
role as advisor to the Remuneration Committee on remuneration matters, this
appointment was considered by the Committee and it was determined that there is
no conflict or potential conflict arising.
Meetings
The Remuneration Committee had five meetings during the year.
Directors’ remuneration