Vodafone 2015 Annual Report Download - page 79

Remuneration policy
In this forward-looking section we describe our remuneration policy for the Board. This includes our considerations when determining policy,
a description of the elements of the reward package and an indication of the potential future value of this package for each of the Executive
Directors. In addition we describe our policy applied to the Chairman and Non-Executive Directors.
Our remuneration policy was approved by shareholders at the 2014 annual general meeting, and took effect from this point. Whilst we do not
envisage making any changes to our policy prior to the 2017 annual general meeting, we conduct annual reviews to ensure that it continues
to support our Company strategy. If we feel it is necessary to make a change to our policy prior to the end of this three year period, we will seek
shareholder approval.
No changes have been made to our policy since its approval at the 2014 annual general meeting which was held on 29 July 2014. Our approved
Policy Report is available on our website at vodafone.com, and has been included in full below as set out in the 2014 Annual Report.
Considerations when determining remuneration policy
Our remuneration principles which are outlined on page 76 are the context for our policy. Our principal consideration when determining
remuneration policy is to ensure that it supports our Company strategy and business objectives.
The views of our shareholders are also taken into account when determining executive pay. In advance of asking for approval for the remuneration
policy we have consulted with our major shareholders. We invited our top 20 shareholders to comment on remuneration at Vodafone and several
meetings between shareholders and the Remuneration Committee Chairman took place. The main topics of consultation were as follows:
a new share plan rules for which we will seek shareholder approval at the 2014 annual general meeting;
a changes to executive remuneration arrangements (reduction of maximum long-term incentive vesting levels and pension provision); and
a impact of Project Spring on Free Cash Flow performance under the global long-term incentive plan (‘GLTI’).
We have not consulted with employees on the executive remuneration policy nor is any xed remuneration comparison measurement used.
However, when determining the policy for Executive Directors, we have been mindful of the pay and employment conditions of employees
in Vodafone Group as a whole, with particular reference to the market in which the executive is based. Further information on our remuneration
policy for other employees is given on page 80.
Performance measures and targets
Our Company strategy and business objectives are the primary consideration when we are selecting performance measures for our incentive plans.
The targets within our incentive plans that are related to internal nancial measures (such as revenue, prot and cash ow) are typically determined
based on our budgets. Targets for strategic and external measures (such as competitive performance and Total Shareholder Return (‘TSR’)) are set
based on Company objectives and in light of the competitive marketplace. The threshold and maximum levels of performance are set to reect
minimum acceptable levels at threshold and very stretching but achievable levels at maximum.
As in previous remuneration reports we will disclose the details of our performance targets for our short and long-term incentive plans. However,
our annual bonus targets are commercially sensitive and therefore we will only disclose our targets in the remuneration report following the
completion of the nancial year. We will disclose the targets for each long-term award in the remuneration report for the nancial year preceding
thestart of the performance period.
At the end of each performance period we review performance against the targets, using judgement to account for items such as (but not limited
to) mergers, acquisitions, disposals, foreign exchange rate movements, changes in accounting treatment, material one-off tax settlements etc.
The application of judgement is important to ensure that the nal assessments of performance are fair and appropriate.
In addition, the Remuneration Committee reviews the incentive plan results before any payments are made to executives or any shares vest and
has full discretion to adjust the nal payment or vesting downwards if they believe circumstances warrant it. In particular, the Committee may use
discretion to clawback any unvested share award (or vested but unexercised options) as it sees appropriate, in which case the award may lapse
wholly or in part, may vest to a lesser extent than it would otherwise have vested or vesting may be delayed.
Overview Strategy review Performance Governance Financials Additional information Vodafone Group Plc
Annual Report 2015
77