Aer Lingus 2014 Annual Report Download - page 65

Download and view the complete annual report

Please find page 65 of the 2014 Aer Lingus annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 146

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146

63
Performance Related Pay Scheme
2014 awards
The 2014 bonus award was based on Company financial and strategic non-financial performance. The financial criteria comprised stretching
operating profit targets to align with the goal of maintaining profitability. The strategic non-financial performance criteria set stretching
goals in the areas of punctuality targets and an employee engagement target.
Performance against these targets is illustrated below:
Performance
measure
Weighting
Performance
Below Threshold
Performance between
Threshold and Target
Target
performance
Performance
between Target
and Maximum
Performance
at Maximum
Operating profit
70.00%

Punctuality
targets -
departures
5.63%
Punctuality
targets - arrivals
5.63%
Employee
Engagement
target
18.75%
Operating profit (before net exceptional items) for 2014 was €72 million, an increase of 17.8% from 2013. This exceeded the
maximum performance target.
Punctuality targets are based on the percentage of Aer Lingus departures and arrivals that are on time. This is assessed on an absolute
and relative basis. For 2014, performance was below threshold for departures and on target, based on relative performance, for arrivals
People targets are based on improvements in employee engagement. For 2014, performance was below threshold.
For the corporate performance element, based on this performance, the bonus awards for 2014 was 73% of maximum.
Individual bonus awards for Executive Directors were 75% based on the corporate performance and 25% based upon the achievement of
individual targets.
Particular achievements in the year were:
Resolution of the significant and long running issues arising from the funding deficit in the Irish Airlines (General Employees)
Superannuation Scheme (IASS);
Successful expansion of transatlantic routes;
Refresh of the executive team with the recruitment of four executive committee members in 2014.
Based on this performance, the bonus awards to Executive Directors were:
2014 bonus award
% of salary
% of maximum award
Mr. Christoph Mueller
€523,000
110%
73%
Mr. Bernard Bot (1)
€133,087
31%
74%
(1) Mr. Bot’s 2014 bonus award is pro-rated based on his service as an Executive Director from 1 September 2014 to 31 December 2014.
2015 awards
The structure of the 2015 Performance Related Pay Scheme for Executive Directors will remain broadly unchanged to that which applied in
2014. The Remuneration Committee believes that this structure continues to be appropriate. The majority of the bonus is based on the
delivery of Company profitability, punctuality and people (employee and customer) targets. Delivering sustainable profit performance is a
key goal of the business and the Committee believes that this should form the main part of the bonus. However, the Committee also
recognises that how we deliver our service to customers today impacts our future profitability. Therefore the Committee continues to believe
that executives should be incentivised to meet punctuality and people targets through the bonus plan. Therefore the 2015 plan will also
include a customer related target; the Committee decided that it was appropriate to include this additional strategic non-financial measure.
This measure will be linked to customer feedback based on our survey, Voice of the Customer. At Aer Lingus, customer service is at the
heart of generating long-term shareholder value and therefore the Committee felt that it was important that this was included as a
performance measure. The non-financial measures will continue to account for 30% of the corporate scorecard.