BT 1999 Annual Report Download - page 52

51
REPORT ON DIRECTORS’ REMUNERATION
Increase in accrued Total accrued pension
pension during year or at year end or at Transfer value of
to date of retirement date of retirement, increase in accrued
in year (a) if earlier (b) benefit (c)
)))%!!!!!))%!!!!!!!0051111!!!0051111!!!0051111
1999 1998 1999 1998 1999 1998
£000 £000 £000 £000 £000 £000
)))%!!!!!))%!!!!!!!0051111!!!0051111!!!0051111
Sir Iain Vallance (d) 19333 332 5159
Sir Peter Bonfield 30 18 72 41 500 276
R P Brace 17 14 118 98 205 173
B Cockburn 15 –23 –258 –
0005111110051111!!!0051111!!!0051111!!!0051111
(a) The increase in accrued pension during the year excludes any increase for inflation.
(b) The pension entitlement is that which would be paid annually on retirement at normal retirement age based on service to the
end of the year or date of retirement if earlier.
(c) The transfer value has been calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note GN11 and
excludes directors’ contributions. The transfer value represents a liability of the company rather than any remuneration due to the
individual and cannot be meaningfully aggregated with annual remuneration, as it is not money the individual is entitled to receive.
(d) Based on service to 31 July 1998, after which no further pension entitlements accrue.
BT Performance Share Plan
The first three-year performance cycle of the PSP ended on
31 July 1998 and, on the basis of the company’s TSR
compared with the FT-SE 100 companies, 90% of the shares
vested on 19 August 1998 in 745 participants and 5 million
shares were transferred to those participants. Further
awards of shares were granted in 1998 under the second
three-year performance cycle of the PSP.
Pensions
The Chairman and all the executive directors, except
Sir Peter Bonfield, are members of the BTPS. In addition to
the company’s contribution, individuals contributed 6% of
salary in the year ended 31 March 1999. Sir Peter’s pension
arrangements are non-approved (by the Inland Revenue)
and unfunded.
When an individual will not achieve the target level of
pension benefit at normal retirement age because of the
Government earnings cap for calculation of pension
benefits, the company may make up the shortfall by
purchasing additional service in the BTPS and/or through
non-approved, unfunded arrangements.
From 1 August 1998, Sir Iain Vallance has been entitled to
receive an annual pension of £333,333 from the company in
accordance with his supplementary pension arrangements.
This pension will be increased in line with future inflation.
The pension paid in the year ended 31 March 1999
amounted to £222,222.
Whilst Sir Iain is part-time Chairman he is a deferred
member of the BTPS and his pension is being paid
entirely by the company. Sir Iain’s pension arrangements
entitle his surviving widow to his full pension until
July 2003 and to two-thirds of his pension after that date.
Sir Peter Bonfield’s pension arrangements provide for a
pension of two-thirds of his final salary at 60, inclusive of
any retained benefits from his previous employment, and
a surviving spouse’s pension of two-thirds of his pension.
He is entitled to a pension of 52% of salary if he were to
retire at 55. If retirement occurs between 55 and 60, the
percentage of salary used to calculate the pension will
increase on a uniform basis.
Bill Cockburn is a member of the BTPS and has an
unfunded and non-approved arrangement to meet the
shortfall resulting from the pensions cap. In addition he
has a funded non-approved retirement benefits scheme
transferred from his previous employer to which the
company made monthly contributions of £10,000 from
1 March 1998 to 30 September 1998. Bill Cockburn’s salary
was reduced, at his request, by £10,000 a month during
this period.
The table below shows the increase in the accrued benefits
to which each director has become entitled during the year
and the transfer value of the increase in accrued benefit.