Vodafone 2015 Annual Report Download - page 84

Remuneration policy (continued)
Service contracts of Executive Directors
After an initial termof up to two years Executive Directors’ contracts have rolling terms and are terminable on no more than 12months’ notice.
The key elements of the service contract for executives relate to remuneration, payments on loss of ofce (see below), and restrictions during active
employment (and for 12 months thereafter). These restrictions include non-competition, non-solicitation of customers and employees etc.
Additionally, all of the Company’s share plans contain provisions relating to a change of control. Outstanding awards and options would normally
vest and become exercisable on a change of control to the extent that any performance condition has been satised and pro-rated to reect the
acceleration of vesting.
Payments for departing executives
In the table below we summarise the key elements of our policy on payment for loss of ofce. We will of course, always comply both with the
relevant plan rules and local employment legislation.
Provision Policy
Notice period and
compensation for
loss ofofce in
servicecontracts
a 12 months’ notice from the Company to the Executive Director.
a Up to 12 months’ base salary (in line with the notice period). Notice period payments will either be made as normal
(iftheexecutive continues to work during the notice period or is on gardening leave) or they will be made
as monthly payments in lieu of notice (subject to mitigation if alternative employment is obtained).
Treatment of annual bonus
(‘GSTIP’) on termination
under plan rules
a The annual bonus will be pro-rated for the period of service during the nancial year and will reect the extent
to which Company performance has been achieved.
a The Remuneration Committee has discretion to reduce the entitlement to an annual bonus to reect the
individual’s performance and the circumstances of the termination.
Treatment of unvested
long-term incentive awards
(‘GLTI’)and co-investment
awards on termination
underplanrules
a An Executive Director’s award will vest in accordance with the terms of the plan and satisfaction of performance
conditions measured at the normal completion of the performance period, with the award pro-rated for the
proportion of the vesting period that had elapsed at the date of cessation of employment.
a The Remuneration Committee has discretion to vary the level of vesting as deemed appropriate, and in particular
to determine that awards should not vest in the case of a ‘bad leaver’ which may include, at their absolute
discretion, departure in case of poor performance, departure without the agreement of the Board, or detrimental
competitive activity.
Pension and benets a Generally pension and benet provisions will continue to apply until the termination date.
a Where appropriate other benets may be receivable, such as (but not limited to) payments in lieu of accrued holiday
and legal fees or tax advice costs in relation to the termination.
a Benets of relative small value may continue after termination where appropriate, such as (but not limited to)
mobile phone provision.
In exceptional circumstances, an arrangement may be established specically to facilitate the exit of a particular individual albeit that any such
arrangement would be made within the context of minimising the cost to the Group. We will only take such a course of action in exceptional
circumstances and where it is considered to be in the best interests of shareholders.
Chairman and Non-Executive Directors’ remuneration
Our policy is for the Chairman to review the remuneration of Non-Executive Directors annually following consultation with the Remuneration
Committee Chairman. Fees for the Chairman are set by the Remuneration Committee.
Element Policy
Fees a We aim to pay competitively for the role including consideration of the time commitment required. We benchmark
the fees against an appropriate external comparator group. We pay fees to our Chairman and Senior Independent
Director that include fees for chairmanship of any committees. We pay a fee to each of our other Non-Executive
Directors and they receive an additional fee if they chair a committee. Non-executive fee levels are set within the
maximum level as approved by shareholders as part of our articles of association.
Allowances a An allowance is payable each time a non-Europe-based Non-Executive Director is required to travel to attend Board
and committee meetings to reect the additional time commitment involved.
Incentives a Non-Executive Directors do not participate in any incentive plans.
Benets a Non-Executive Directors do not participate in any benet plans. The Company does not provide any contribution
to their pension arrangements. The Chairman is entitled to the use of a car and a driver whenever and wherever
he is providing his services to or representing theCompany. We have been advised that for Non-Executive Directors,
certain travel and accommodation expenses in relation to attending Board meetings should be treated as a taxable
benet therefore we also cover the tax liability for these expenses.
Non-Executive Director service contracts
Non-Executive Directors are engaged on letters of appointment that set out their duties and responsibilities. Theappointment of Non-Executive
Directors may be terminated without compensation. Non-Executive Directors are generally not expected toserve for a period exceeding nine years.
For further information refer to the “Nomination and Governance Committee” section of the Annual Report (pages 69 to 70).
Vodafone Group Plc
Annual Report 2015
82
Directors’ remuneration (continued)