BT 2000 Annual Report Download - page 53

Report on directors' remuneration
52 Annual report and Form 20-F
In the 1999 ¢nancial year, Robert Brace exercised
options over 175,855 shares, resulting in a gain of
»891,000. Sir Alan Rudge, who retired as a director on
31 October 1997, exercised options over 14,593 shares
resulting in a gain of »41,000. (The gains are based on the
amount by which the market value of the shares on the
date of exercise exceeded the option price and also included
the employee compensation for the special dividend (see
Note 4 to the ¢nancial statements).
On 2 August 1999, total awards of 65,724 and 78,874
shares under the ESP vested in Robert Brace and Sir Alan
Rudge. The value of those shares on the vesting date was
»694,966 and »834,014 respectively.
On 2 August 1999, an award of 29,878 shares under
the PSP vested in Bill Cockburn. The value of those shares
on the vesting date was »315,930.
June de Moller was appointed a director on
1 September 1999 and Louis R Hughes on 1 January 2000.
In the previous year, Malcolm Argent retired on
31 December 1998 and Sir Ewen Fergusson on 31 March
1999. Yve Newbold, who retired in June 1997, remains on
the Community Support Committee, for which she received
fees of »5,000 in the 2000 ¢nancial year (1999 ^ »5,000).
Pensions
The Chairman, Robert Brace and Bill Cockburn are
members of the BTPS. In addition to the company's
contribution, individuals contributed 6% of salary in the
2000 ¢nancial year. Sir Peter Bon¢eld's pension
arrangements are non-approved by the Inland Revenue
and unfunded.
When an individual will not achieve the target level of
pension bene¢t at normal retirement age because of the
Government earnings cap for calculation of pension
bene¢ts, the company may make up the shortfall by
purchasing additional service in the BTPS and/or through
non-approved, unfunded arrangements.
From l August 1998, Sir Iain Vallance, when he retired
from full-time employment with the company, has been
entitled to receive an annual pension in accordance with
his supplementary pension arrangements. This pension will
be increased in line with future in£ation. The pension paid
in the 2000 ¢nancial year amounted to »340,433 (1999 ^
»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 Bon¢eld's pension arrangements provide for
a pension of two-thirds of his ¢nal salary at 60, inclusive
of any retained bene¢ts from his previous employment, and
a surviving spouse's pension of two-thirds of his pension.
He would have been entitled to a pension of 54% of salary
if he had retired on 31 March 2000. If his retirement occurs
before 2004, the percentage of salary used to calculate the
pension will increase on a uniform basis to the target at 60.
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 bene¢ts 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
bene¢ts to which each director has become entitled during
the year and the transfer value of the increase in
accrued bene¢t.
Increase in accrued pension
during year or to date of
retirement in year(a)
Total accrued pension
at year end or at date of
retirement, if earlier(b)
Transfer value of increase
in accrued benefit(c)
2000
£000
1999
£000
2000
£000
1999
£000
2000
£000
1999
£000
Sir lain Vallance (d) N/A 1N/A 333 N/A 5
Sir Peter Bon®eld 119 30 192 72 2,204 500
R P Brace 17 17 137 118 246 205
B Cockburn 17 15 41 23 317 258
(a) The increase in accrued pension during the year excludes any increase for in¯ation.
(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.