Vodafone 2012 Annual Report Download - page 84

82
Vodafone Group Plc
Annual Report 2012
Cascade to senior management
The principles of the reward policy for executive directors are cascaded,
where appropriate, to the other members of the Executive Committee
as set out below.
Cascade of policy to Executive Committee – 2012 nancial 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.
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.
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 benets
that are consistent with the terms of such plans
Remuneration Salary, pension and benets
Company car or cash allowance
Participation in the GSTIP, GLTI and the employee
share schemes
Non-competition During employment and for 12 months thereafter
Date of service agreement
Vittorio Colao 27 May 2008
Andy Halford 20 May 2005
Michel Combes 1 June 2009
Stephen Pusey 1 June 2009
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 satised. The Remuneration
Committee may also decide that the extent to which an award will vest
will be further reduced pro-rata to reect 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 €24,545 from
Assystem SA and DKK 407,292 from ISS Group (£66,112 in total).
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 an 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 85.
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 executive awards is approximately 3.1% of the Company’s
share capital at 31 March 2012 (3.1% at 31 March 2011), whilst from all
employee share awards it is approximately 0.3% (0.3% at 31 March
2011). This gives a total dilution of 3.4% (3.4% at 31 March 2011).
Funding
A mixture of newly issued shares, treasury shares and shares purchased
in the market by the employee benet trust are used to satisfy
share-based awards. This policy is kept under review.
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 ve 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 77 and not on the graph below.
Five year historical TSR performance growth in the value
of a hypothetical £100 holding over ve years
175
150
125
100
75
50
03/07 03/08 03/09 03/10 03/11 03/12
Vodafone FSTE 100
FTSE 100 comparison based on spot values
100
116
94 100
67
132
101
162
109
170
110
Directors’ remuneration (continued)
Other considerations
In this section we include all other disclosures that are currently required by statute or good practice guidelines.