Vodafone 2013 Annual Report Download - page 69

Letter from the Remuneration Committee
Dear shareholder
This has been a demanding yet effective year for the Committee. As always we have tried to ensure that the compensation policies and practices
atVodafone drive behaviours that are in the long-term interests of the Company and its shareholders. The Committee is of course mindful of the
considerable interest that exists in executive compensation. At Vodafone we are very conscious of the many and varied concerns, we recognise the
need for change, we have engaged in the debate and strive to demonstrate best practice in this area, particularly highlighted by:
Clarity and openness in disclosure
Last year we incorporated some elements of the new reporting requirements into our report. Whilst the requirements are still not nalised they are
now considerably clearer and so this year we have made further modications which enable us to be as transparent as possible without disclosing
sensitive information and at the same time displaying data in a way that we believe to be most helpful to shareholders, including:
a dividing the remuneration report into two parts showing achievement during the year as well as our policies and approach for the year ahead,
both for executives and non-executive directors;
a a single table for remuneration (page 70);
a a graphical display of the spend on pay relative to tax, retained prot and dividends (page 71);
a a comparison of total rewards paid to the CEO over the last ve years with the total shareholder return (‘TSR’) over the same period (page 71);
a a description of each element of the reward package as well as how they link to our strategy (pages 74 and 75); and
a scenarios that show how each of the executive directors will be rewarded under varying performance scenarios (page 77).
Pay for performance
Pay for performance continues to be an important principle for Vodafone when setting remuneration policy. This ensures our incentive plans only
deliver signicant rewards if and when they are justied by performance. For the Remuneration Committee this means two things:
a ensuring the targets we set for incentive plans are suitably challenging (as can be seen by the historic levels of achievement for both short- and
long-term incentive plans shown on page 71); and
a if needed, exercising discretion. The Committee reviews all incentive plans before any payments are made to executives and has full discretion to
adjust payments downwards if they believe circumstances warrant it.
Exercising restraint
We awarded no base pay increases during the 2013 nancial year to any of the executive directors. Furthermore no increases will be awarded in the
2014 nancial year. With all but one or two exceptions a similar pay freeze has also been in place for all members of the Executive Committee over
both years. When considering all what, if any, pay increases to award, the Committee is always mindful of both wider conditions as well as what is
happening elsewhere within Vodafone. For reference the salary increase budget for Vodafone in the UK was 3% last year and will be 1.75% this year.
Share ownership
For many years Vodafone has had demanding share ownership goals both for the executive directors and for all other senior executives. These goals,
and our achievement against the goals, are set out on page 72. We are delighted that, collectively, this group of managers now own shares with a
value of over £81.5 million. Owning shares is part of our culture and each year we expect this number to continue to grow. This level of ownership
bymanagement clearly shows their alignment with shareholders but also indicates their belief in the long-term value creation opportunities of
ourshares.
Consultation with shareholders
The Remuneration Committee continues to have dialogue with our shareholders. The views of all shareholders are taken seriously, and letters
andemails are replied to promptly. In addition the largest shareholders are invited to meet with me in person. We were delighted that last year
theremuneration report received a 96.44% vote in favour. This compares with 96.12% support in the prior year. We sincerely hope to receive your
continued support at the AGM on 23 July 2013.
Luc Vandevelde
Chairman of the Remuneration Committee
21 May 2013
67 Vodafone Group Plc
Annual Report 2013
Overview Business review Performance Governance Financials Additional information
Directors’ remuneration