Aer Lingus 2008 Annual Report Download - page 35

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AER LINGUS GROUP PLC - ANNUAL REPORT 2008
Unaudited information
The Remuneration Committee
The Remuneration Committee of the Board comprises three
independent non-executive Directors. Until March 2008, the
Committee members were Mr Ivor Fitzpatrick (Chairman), Mr
John Sharman and Mr Chris Wall. In March 2008 Ms Anne Mills
replaced Mr Chris Wall on the Committee. In October 2008,
Mr John Sharman resigned and was replaced by Mr Colm
Barrington. Since the year end, Ms Danuta Gray was appointed
Chairman of the Remuneration Committee and Mr Tom
Corcoran was appointed as a member of the committee.
The committee determines, within the agreed terms of
reference, the remuneration policy in respect of the executive
Directors, the Chairman of the Board, the Company Secretary
and the other members of senior management and monitors
and approves these total remuneration packages within the
terms of the agreed policy. The committee is also required
to approve the design of, and determine targets for, any
performance-related pay schemes operated by the Company and
approve the total annual payments made under such schemes.
In making its decisions the committee will take advice from
the Chief Executive who is invited to attend meetings of the
committee as and when appropriate. The Remuneration
Committee can obtain external advice from independent
firms of remuneration consultants where necessary.
The remuneration of non-executive Directors is a matter for the
Chairman and the executive Directors. No Directors or managers
are involved in any decisions as to their own remuneration.
Policy
The aim of the Company’s remuneration policy is to ensure that
senior management are provided with appropriate incentives
to encourage performance and are rewarded for their individual
contributions to the success of the Company in a fair and
responsible manner.
Non-Executive Directors
Non-executive Directors are remunerated by way of Directors’ fees.
For the year ended 31 December 2008, Directors’ fees were set at
€45,000 per annum and Chairman’s fees were set at €175,000
per annum. On 3 February 2009, all Aer Lingus Board members
agreed to reduce their fees by 20%, resulting in Directors fees of
€36,000 and Chairman’s fees of €140,000 for 2009.
Executive Directors
During 2008, Mr Dermot Mannion (Chief Executive), Mr Sean Coyle
(Chief Financial Officer) and Mr Greg O’Sullivan (Finance Director)
were each executive Directors of the Company. Mr Greg O’Sullivan
resigned as a Director on 6 June 2008 and Mr Sean Coyle was
appointed as a Director on 22 August 2008. The remuneration
package for executive Directors consists of basic salaries
(subject to annual review), annual performance related bonuses,
pension contributions, shares awarded under the Company’s
long term incentive plan (LTIP) and other benefits including
health insurance, life assurance and car allowance. As members
of the Board of Directors, they also receive Directors’ fees.
Basic Salary Reviews
The basic salaries of executive Directors are reviewed annually
having regard to personal performance, Company performance,
changes in responsibilities and market practice.
Performance Related Bonuses
Performance related bonuses are payable to executive Directors
for meeting clearly defined and stretching annual profit targets
and strategic goals set and monitored by the Remuneration
Committee.
Long Term Incentive Plan
Conditional awards of shares are granted to executive
Directors under the Company’s LTIP. The LTIP is a share based
performance award scheme which provides for the vesting of
shares subject to the achievement of minimum performance
objectives, as specified by the Remuneration Committee,
measured over a three-year period. The performance objectives
for the awards granted in 2007 and 2008 consist of both Total
Shareholder Return (TSR) and Compound Growth in EBITDAR.
Service Contracts
The Company has a service contract or letter of appointment
with all Board members.
Executive Directors
All service contracts with executive Directors have notice
periods of 12 months or less.
Non-executive Directors
The terms upon which each of the non-executive Directors
have been appointed are set out in letters of appointment which
reflect the form recommended by the 2006 FRC Combined
Code. It is the Company’s policy that each non-executive
Director will be appointed for a fixed period not exceeding three
years (with the potential for a second three year term), subject
to satisfactory performance and re-election at any Annual
General Meeting where this is required. None of the non-
executive Directors is a party to any service contract with the
Company that provides for benefits upon termination.
Employee Share Participation
The Group operates profit share and share ownership schemes
and a long term Incentive plan. See Notes 23 and 24 to the
financial statements for more details.
Directors’ Remuneration
Disclosures regarding Directors’ remuneration have been
drawn up on an individual Director basis in accordance with
the requirements of both the Combined Code and the Irish
Stock Exchange.
Directors’ Shareholdings
The interests of the Directors in office at 31 December 2008 in
the shares of the Group are outlined in Table 2.3.
Report of the Remuneration Committee on
Directors’ Remuneration