Vodafone 2013 Annual Report Download - page 71

Meetings
The Remuneration Committee had ve formal meetings during the year. Outside these meetings there are frequent discussions usually by phone.
The principal agenda items at the formal meetings were as follows:
Meeting Standing agenda items Other agenda items
May 2012 Annual bonus short-term incentive (‘GSTIP’):
Approval of 2012 achievement.
Approval of 2013 targets and ranges.
Long-term incentives (‘GLTI’):
Approval of 2009 GLTI vesting.
Approval of performance targets and ranges for the 2012 GLTI grant.
Approval of expected share awards and impact on dilution.
Approval of 2012 Sharesave.
Approval of 2012 directors’ remuneration report.
Review and approval of revised
terms of reference for non-
executive directors.
July 2012 Long-term incentives:
Review of actual share awards, accounting costs for 2012 awards and dilution levels.
Sharesave invitation and option price.
Review of large local market CEO rewards.
Consideration of remuneration
governance changes proposed by
the Secretary of State for the
Department of Business Innovation
and Skills (‘BIS’).
November 2012 Approval of the 2014 reward strategy.
Long-term incentives:
Approval of share ownership GLTI awards made to senior leadership team members.
Approval of interim share awards.
Approval of revised dividend policy
on employee share awards.
Approval to reduce maximum
leverage on GLTI awards made to
Executive Committee members
from 2013.
Consideration of published
shareholder views with respect to
executive remuneration.
January 2013 Approval of the 2014 GSTIP framework.
Long-term incentives:
Approval of interim share awards.
Consideration of published and
circulated voting guidelines from
shareholder advisory services
including ABI, ISS and NAPF.
March 2013 Approval of Executive Committee 2014 reward packages.
Review of non-executive director fee levels.
Review of preliminary 2014 GSTIP targets and ranges.
Review of risk assessment.
Approval of shareholder consultation packs.
Review of the revised draft of the
new remuneration reporting
regulations released by BIS, as well
as consideration of guidance on
executive remuneration from PIRC
and more prescriptive broader
themes on remuneration emerging
from across Europe.
The Committee’s effectiveness is reviewed on an annual basis as part of the evaluation of the Board.
Assessment of risk
One of the primary activities of the Remuneration Committee is to be aware and mindful of any potential risk. Vodafone seeks to provide a structure
of rewards that encourages acceptable risk taking and high performance through optimal pay mix,performance metrics and calibration, and timing.
With that said, itisprudent practice to ensure that our reward programmes achieve this and do not encourage excessive or inappropriate risk taking.
Onaregular basis, the Remuneration Committee has considered therisk involved in the incentive schemes and is satised that the following design
elements and governance procedures mitigate the principal risks:
a the heavy weighting on long-term incentives with overlapping performance periods which reward sustained performance;
a the proportionately higher incentive opportunity paid in shares rather than incash;
a the need for a signicant annual investment and holding in company shares in order to fully participate in the long-term arrangements;
a the short-term plan contains four performance measures (nancial and non-nancial) and the long-term plan contains two measures (internal
absolute and external relative targets) thus ensuring executives are focused on all the key drivers of business success and are not overly rewarded
for success in just one area;
a the inclusion of non-nancial measures in the short-term plan which provides an external perspective on our performance by focusing on
customer satisfaction and performance relative to our competitors;
a the fact that executives do not participate in sales commission or uncapped incentive schemes; and
a the fact that the Committee has the ability to exercise discretion to adjust payments and vesting levels downwards if they believe circumstances
warrant it.
The Remuneration Committee will continue to consider the risks involved in the incentive plans on an ongoing basis.
69 Vodafone Group Plc
Annual Report 2013
Overview Business review Performance Governance Financials Additional information