Vodafone 2014 Annual Report Download - page 72

Letter from the Remuneration Committee Chairman (continued)
Key decisions on executive remuneration
The Remuneration Committee considers every decision around executive director remuneration very carefully. Some of the major decisions made
this year were as follows:
a Nick Read was promoted to Chief Financial Ofcer during the year and we determined his new remuneration package. Our decision to give
Nick a base salary of £675,000 was made in the context of the existing executive directors’ remuneration levels and reviewed against the
external market;
a the Remuneration Committee considered the impact of the Verizon Wireless transaction and Project Spring on executive remuneration and
decided to remove the impact of Project Spring on pre-existing long-term incentive awards to ensure an appropriate comparison to the original
targets that were set. Please see page 84 for more details;
a we decided to reduce the maximum vesting level of our long-term incentive opportunity for our Executive Committee. For the 2015 long-term
incentive awards, the maximum vesting level will reduce from three times to two and a half times the target vesting level. We have also introduced
a mandatory holding period where 50% of the post-tax shares are released after vesting, a further 25% after the rst anniversary of vesting,
and the remaining 25% will bereleased after the second anniversary;
a following a review of the pension levels in the context of pension provision for our broader employee population, from November 2015 pension
levels for our Executive Committee will reduce from 30% of salary to 24% of salary. This brings our Executive Committee pension level in line with
our UK senior management; and
a the Remuneration Committee took account of business performance, salary increases for other UK employees and external market information
when deciding to increase the annual base salaries of the Chief Executive (Vittorio Colao) and the Chief Technology Ofcer (Stephen Pusey)
by 3.6% and 4.3% respectively from 1 July 2014. This is the rst salary increase that either individual has received for three years.
Assessment of risk
One of the activities of the Remuneration Committee is to continually be aware and mindful of any potential risk associated with our reward
programmes. 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. The Committee has considered therisk involved in the incentive schemes and is satised
that the design elements and governance procedures mitigate the principal risks.
Share ownership
For many years Vodafone has had demanding share ownership goals for our executive directors. These goals, and our achievement against the
goals, are set out on page 80. We are delighted that, collectively, our Executive Committee own shares with a value of over £50 million. We are proud
that the high level of shareholding by our Executive Committee has been maintained despite the Verizon Wireless transaction and the associated
share consolidation. After the transaction our Executive Committee members individually elected to reinvest the vast majority of their post-tax
proceeds from the transaction back into Vodafone shares. Owning shares is part of our culture and each year we expect the number of shares
owned by our Executive Committee members 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, during the year we invited our largest shareholders to meet with me in person and the resulting
meetings were very helpful for us to better understand our shareholders’ viewpoint. We were delighted that last year theremuneration report
received a 96.36% vote in favour. This compares with 96.44% support in the prior year. We sincerely hope to receive your continued support at the
AGM on 29 July 2014.
Luc Vandevelde
Chairman of the Remuneration Committee
20 May 2014
Contents of the remuneration report
Remuneration policy
The remuneration policy table
Chairman and non-executive directors’ remuneration
Page 71
Page 72
Page 76
Annual report on remuneration
Remuneration Committee
2014 remuneration
2015 remuneration
Further remuneration information
Page 77
Page 77
Page 78
Page 84
Page 85
Vodafone Group Plc
Annual Report 201470
Directors’ remuneration (continued)