Vodafone 2013 Annual Report Download - page 76

The remuneration package for the 2014 nancial year
The table below summarises the main components of the reward package for executive directors.
Purpose and link to strategy Operation
Base salary a To attract and retain the best talent. a Salaries are reviewed annually and xed for 12months
commencing 1 July. Decision is inuenced by:
a level of skill, experience and scope of responsibilities
ofindividual and business performance, economic
climate and market conditions;
a increases elsewhere within the Group; and
a an external comparator group (which is used for
reference purposes only) made up of companies
ofsimilar size and complexity to Vodafone, and is
principally representative of the European top
25companies and a few other select companies
relevant to the sector. The comparator group excludes
any nancial services companies.
directors during the 2014 nancial year compared to a
salary increase budget in the UK of 1.75%.
Vittorio Colao £1,110,000
Andy Halford £700,000
Stephen Pusey £575,000
Benets a To aid retention and remain competitive
within the market place.
a Executive directors may choose to participate in the
dened contribution pension scheme or to receive a cash
allowance inlieu of pension.
a Company car or cash allowance.
a Private medical insurance.
a Chauffeur services, where appropriate, to assist with
theirrole.
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.
£19,200 per annum.
£1,500 per annum
Global Short-Term Incentive
Plan (‘GSTIP’)
a To drive behaviour and communicate the key
priorities for the year.
a To motivate employees and incentivise
delivery of performance over the one-year
operating cycle.
a The three nancial metrics are designed to
both drive our growth strategies whilst also
focusing on improving operating efciencies.
Measuring competitive performance with its
heavy reliance on net promoter score means
providing a great customer experience
remains at the heart of what we do.
a Bonus levels and the appropriateness of measures and
weightings are reviewed annually to ensure they
continue to support our strategy.
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 The annual bonus is paid in cash in June each year for
performance over the previous nancial year.
Bonuses can range from 0–200% of base salary, with
100% paidfor on-target performance. Maximum is only
Service revenue (25%);
EBITDA (25%);
adjusted free cash ow (25%); and
competitive performance assessment (25%).
adjusted free cash ow (20% to
25%) andcompetitive
performance assessment (30%
to 25%)
Global Long-Term Incentive
Plan (‘GLTI’) base awards and
co-investment awards (further
details can be found on
page76).
a To motivate and incentivise delivery
ofsustained performance over the
long-term.
a To support and encourage greater
shareholder alignment through a high level
ofpersonal nancial commitment.
a The use of free cash ow as the principal
performance measure ensures we apply
prudent cash management and rigorous
capital discipline to our investment decisions,
whilst the use of TSR along with the three
year performance period and the subsequent
holding of vested shares means that we are
focused on ensuring these decisions are
value enhancing for our shareholders.
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.
a Individuals must co-invest Vodafone shares and hold
them in trust for three years in order to receive the full
target award.
a Dividend equivalents are paid in cash after the
vestingdate.
a All awards vest three years later based on Group
operational and external performance.
The Chief Executive’s full award will have a target face
value of237.5% of base salary. The award for the other
executive directors will have a target face value of 210%
ofbase salary.
Minimum vesting is zero times and maximum vesting is
To receive the full target award, executive directors must
co-invest up to their annual gross salary. If they are
unable to commit up to their annual gross salary, awards
will be reduced accordingly, to a target base award of
137.5% (CEO) and 110% (other executive directors).
satised over the three year period.
Performance over three nancial years is
Vesting is determined based on a matrix of
two measures:
adjusted free cash ow as our operational
performance measure; and
relative TSR against a peer group of
expanded to include AT&T.
74 Vodafone Group Plc
Annual Report 2013
Directors’ remuneration (continued)