Vodafone 2011 Annual Report Download - page 70

68 Vodafone Group Plc Annual Report 2011
Five year historical TSR performance growth in the value of a hypothetical £100 holding over five years. FTSE 100 comparison based on spot values
Directors’ remuneration continued
Other considerations
Service contracts of executive directors
The Remuneration Committee has determined that after an initial term of
up to two years’ duration executive directors’ contracts should thereafter
have rolling terms and be terminable on no more than 12 months notice.
The table below summarises the key elements of their service contract:
Provision Detailed items
Notice period 12 months
Retirement date Normal retirement date
Termination
payment
Up to 12 months salary
Bonus paid up to termination day
Entitlements under incentive plans and benefits
that are consistent with the terms of such plans
Remuneration Salary, pension, and benefits
Company car or cash allowance
Participation in the GSTIP, GLTI
and the employee share schemes
Non-competition During employment and for 12 months thereafter
Contract dates Date of service agreement Length of Board service
Vittorio Colao 27 May 2008 2 years 10 months
Andy Halford 20 May 2005 5 years 10 months
Michel Combes 1 June 2009 1 year 10 months
Stephen Pusey 1 June 2009 1 year 10 months
Additionally, all of the Company’s share plans contain provisions relating to
a change of control. Outstanding awards and options would normally vest
and become exercisable on a change of control to the extent that any
performance condition has been satisfied. The Remuneration Committee
may also decide that the extent to which an award will vest will be further
reduced pro-rata to reflect the acceleration of vesting.
Fees retained for external non-executive directorships
Executive directors may hold positions in other companies as non-executive
directors. Michel Combes was the only executive director with such
positions held at Assystem SA and ISS Group, and in accordance with Group
policy he retained fees for the year of €50,223 from Assystem SA and
DKK243,750 from ISS Group (£73,250 in total).
Cascade to senior management
The principles of the policy are cascaded, where appropriate, to the other
members of the Executive Committee as set out below.
Cascade of policy to Executive Committee – 2011 financial year
Total remuneration and base salary
Methodology consistent with the executive directors.
Annual bonus
The annual bonus is based on the same measures. For some individuals
these are measured within a region rather than across the whole Group.
Cascade of policy to Executive Committee – 2011 financial year
Long-term incentive
The long-term incentive is consistent with the executive directors
including the opportunity to invest in the GLTI to receive matching
awards. In addition, Executive Committee members have a share
ownership requirement of two times base salary.
All-employee share plans
The executive directors are also eligible to participate in the all-employee plans.
Summary of plans
Sharesave
The Vodafone Group 2008 Sharesave Plan is a HM Revenue & Customs
(‘HMRC’) approved scheme open to all staff permanently employed
by a Vodafone Company in the UK as of the eligibility date. Options
under the plan are granted at up to a 20% discount to market value.
Executive directors’ participation is included in the option table on
page 71.
Share Incentive Plan
The Vodafone Share Incentive Plan is an HMRC approved plan open
to all staff permanently employed by a Vodafone Company in the UK.
Participants may contribute up to a maximum of £125 per month (or
5% of salary if less) which the trustee of the plan uses to buy shares
on their behalf. An equivalent number of shares are purchased with
contributions from the employing company. UK-based executive
directors are eligible to participate.
Dilution
All awards are made under plans that incorporate dilution limits as set out in
the guidelines for share incentive schemes published by the Association of
British Insurers. The current estimated dilution from subsisting awards,
including executive and all-employee share awards, is approximately 3.4%
of the Company’s share capital at 31 March 2011 (3.1% at 31 March 2010).
Funding
A mixture of newly issued shares, treasury shares and shares purchased in
the market by the employee benefit trust are used to satisfy share-based
awards. This policy is kept under review.
Other matters
The Share Incentive Plan and the co-investment into the GLTI plan include
restrictions on the transfer of shares while the shares are subject to the plan.
Where, under an employee share plan operated by the Company,
participants are the beneficial owners of the shares but not the registered
owner, the voting rights are normally exercised by the registered owner at
the discretion of the participant.
200
175
150
125
100
75
50
100
137
102
118
74
155
111
191
119
109
118
Key:
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FTSE 100
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Vodafone Group
March 2011March 2006 March 2007 March 2008 March 2009 March 2010
TSR performance
The following chart is included in order to be compliant with the requirements of the large and medium sized companies and Groups (Accounts and
Reports) Regulations 2008. Data was provided by FTSE and DataStream and shows performance of the Company relative to the FTSE 100 index over a
five year period, of which we were a constituent throughout the year. It should be noted that the payout from the long-term incentive plan is based on the
TSR performance shown in the graph on page 67 and not on the graph below.