Vodafone 2012 Annual Report Download - page 81

Business review Performance Governance Financials Additional information
79
Vodafone Group Plc
Annual Report 2012
The remuneration package
The table below summarises the main components of the reward package for executive directors.
Objective and practice Performance period Award size and performance conditions
Base salary a To attract and retain the best talent.
a Base salaries are reviewed annually and
set on 1July.
n/a a Salaries are reviewed against:
a level of skill, experience and scope of responsibilities of
individual and business performance, economic climate and
market conditions; and
a European peer group of comparably sized companies and
other telecom businesses.
Benets a To aid retention and remain competitive
within the market place.
n/a a Executive directors may choose to participate in the dened
contribution pension scheme or to receive a cash allowance
inlieu of pension. The cash payment or pension contribution
isequal to 30% of annual gross salary. From 6 April 2011
contributions into the dened contribution pension scheme
wererestricted to £50,000 per annum. Any residual of the 30%
pension benet is delivered as a cash allowance.
a Company car or cash allowance worth £19,200 per annum.
a Private medical insurance.
a Chauffeur services, where appropriate, to assist with their role.
Global Short-Term
Incentive Plan
(‘GSTIP’)
a To motivate employees and incentivise
delivery of performance over the
one-year operating cycle.
a Bonus levels and the appropriateness of
measures and weightings are reviewed
annually to ensure they continue to
support our strategy.
a The annual bonus is paid in cash in June
each year for performance over the
previous nancial year.
1 year a Performance over the nancial year is measured against
stretching nancial and non-nancial performance targets
setatthe start of the nancial year.
a Summary of the plan:
a service revenue (25%);
a EBITDA (25%);
a adjusted free cash ow (20%); and
a competitive performance assessment (30%).
a Bonuses can range from 0 – 200% of base salary, with 100%
paidfor on-target performance. Maximum is only paid out for
exceptional performance.
Global Long-Term
Incentive Plan
(‘GLTI’) base
awards
a To motivate and incentivise delivery
ofsustained performance over the
long-term.
a Award levels and the framework for
determining vesting are reviewed
annually to ensure they continue to
support our strategy.
a Long-term incentive base awards consist
of performance shares which are granted
each year in June/July and vest three
years later based on Group operational
and external performance.
3 years a Performance over three nancial years is measured against
stretching targets set at the beginning of the performance
period.
a Vesting is determined based on a matrix of two measures:
a adjusted free cash ow as our operational performance
measure; and
a relative TSR as our external performance measure.
a Awards vest to the extent performance conditions are satised,
three years from grant. An additional cash payment in lieu of
dividends is also paid at vesting.
a The Chief Executive’s base award will have a target face value
of137.5% of base salary. The base award for the other executive
directors will have a target face value of 110% ofbase salary.
a Minimum vesting is zero times and maximum vesting is three
times the base award level.
Global Long-Term
Incentive Plan
(‘GLTI’) co-
investment
matching awards
a To support and encourage greater
shareholder alignment through a high
level of personal nancial commitment.
a Individuals may purchase Vodafone
shares and hold them in trust for three
years in order to receive additional
performance shares in the form of a GLTI
matching award.
a GLTI matching awards are granted each
year in June/July in line with the
investment made and vest three years
later based on Group operational and
external performance.
3 years a GLTI matching awards are subject to the same performance
conditions as the main GLTI award and also receive an additional
cash payment in lieu of dividends.
a Executive directors can co-invest up to their annual gross salary.
a Matching awards will be granted on a one-for-one basis at target
performance.
a Minimum vesting is zero times and maximum vesting is three
times the target award level.