Vodafone 2014 Annual Report Download - page 75

The table below summarises the main components of the reward package for executive directors.
Purpose and link to strategy Opportunity Performance metrics
Base salary To attract and retain the best talent. Salaries are usually reviewed annually and xed for
12months commencing 1 July. Decision is inuenced by:
level of skill, experience and scope of responsibilities
ofindividual;
business performance, scarcity of talent, economic
climate and market conditions;
increases elsewhere within the Group; and
external comparator groups (which are used for
reference purposes only) made up of companies
ofsimilar size and complexity to Vodafone.
a Average salary increases for existing Executive Committee members (including executive
directors) will not normally exceed average increases for employees in other appropriate parts
of the Group. Increases above this level may be made in specic situations. These situations
couldinclude (but are not limited to) internal promotions, changes to role, material changes
to the business and exceptional company performance.
None.
To remain competitive within the marketplace. Executive directors may choose to participate in the
dened contribution pension scheme or to receive a cash
allowance inlieu of pension.
a The pension contribution or cash payment is equal to 30% of annual gross salary. In light
of pension levels elsewhere in the Group we have decided to reduce the pension benets level
from 30% to no more than 24% from November 2015.
None.
Benets To aid retention and remain competitive within
the marketplace.
Travel related benets. This may include (but is not limited
to) company car or cash allowance, fuel and access
to a driver where appropriate.
Private medical, death and disability insurance and annual
health checks.
In the event that we ask an individual to relocate we would
offer them support in line with Vodafone’s relocation
or international assignment policies. This may cover
(but is not limited to) relocation, cost of living allowance,
housing, home leave, education support, tax equalisation
and advice.
Legal fees if appropriate.
Other benets are also offered in line with the benets
offered to other employees for example, all-employee
share plans, mobile phone discounts, maternity/paternity
benets, sick leave, paid holiday, etc.
a Benets will be provided in line with appropriate levels indicated by local market practice in the
country of employment.
a We expect to maintain benets at the current level but the value of benet may uctuate
depending on, amongst other things, personal situation, insurance premiums and other
external factors.
None.
Annual Bonus –
Global Short-
Term Incentive
Plan (‘GSTIP’)
To drive behaviour and communicate the key priorities for
To motivate employees and incentivise delivery
of performance over the one year operating cycle.
The 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 (‘NPS’) means providing a great customer
experience remains at the heart of what we do.
Bonus levels and the appropriateness of measures and
weightings are reviewed annually to ensure they continue
to support our strategy.
Performance over the nancial year is measured against
stretching nancial and non-nancial performance targets
set at the start of the nancial year.
The annual bonus is usually paid in cash in June each year
for performance over the previous nancial year.
a Bonuses can range from 0–200% of base salary, with 100% paidfor on-target performance.
Maximum is only paid out for exceptional performance.
a Performance over each nancial year
is measured against stretching targets set
at the beginning of the year.
a The performance measures normally
comprise of a mix of nancial and
strategic measures. Financial measures
may include (but are not limited to) prot,
revenue and cash ow with a weighting
of no less than 50%. Strategic measures
may include (but are not limited to)
competitive performance metrics such
as net promoter score and market share.
Long-Term
Incentive – Global
Long-Term
Incentive Plan
(‘GLTI’) base
co-investment
awards (further
details can be
this table)
To motivate and incentivise delivery ofsustained
performance over the long term.
To support and encourage greater shareholder alignment
through a high level ofpersonal nancial commitment.
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 a performance
focused on the long-term interests of our shareholders.
Award levels and the framework for determining vesting
are reviewed annually to ensure they continue to support
our strategy.
Long-term incentive base awards consist of performance
shares which are granted each year.
Individuals must co-invest in Vodafone shares and hold
them in trust for at least three years in order to receive the
full target award.
All awards vest not less than three years after the award
based on Group operational and external performance.
Dividend equivalents are paid in cash after the
vestingdate.
a The basic target award level is 137.5% of base salary for the Chief Executive (110% for other
executive directors).
a The target award level may increase up to 237.5% of base salary for the Chief Executive
(or 210% for others) ifthe individual commits to a co-investment in shares equal in value to their
base salary.
a Minimum vesting is 0% of target award level, threshold vesting is 50% and maximum vesting
is250% of the target award level.
a Maximum long-term incentive face value at award of 594% of base salary for the Chief Executive
(237.5% x 250%) and 525% for others.
a The awards that vest accrue cash dividend equivalents over the three year vesting period.
a Awards vest to the extent performance conditions are satised. There is 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 Performance is measured against
stretching targets set at the beginning
of the performance period.
a Vesting is determined based on a matrix
of two measures:
a adjusted free cash ow as our
operational performance measure;
and
a relative TSR against a peer group
of companies as our external
performance measure.
73Overview
Strategy
review Performance Governance Financials Additional information