BT 2004 Annual Report Download - page 59

Download and view the complete annual report

Please find page 59 of the 2004 BT 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 160

  • 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
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

The review is divided into the following
sections:
59 Remuneration policy (Not audited)
(i) Packages
(ii) Annual package – 2005 financial year
(iii) Other Matters
Executive share ownership
Pensions
Other benefits
Service agreements
Termination payments
Outside appointments
Non-executive directors’ letters of
appointment
Non-executive directors’ remuneration
Directors’ service agreements and
contracts of appointment
Directors’ interests
Performance graph
65 Remuneration review (Audited)
Directors’ remuneration
Former directors
Loans
Pensions
Share options
Share awards under long-term incentive
schemes
Deferred Bonus Plan
Share awards under all-employee share
ownership plans
Operating Committee
The Remuneration Committee is made up wholly of
independent non-executive directors. Throughout the
year, the company has applied the principles in
Section 1 of the 1998 version of the Combined Code
on Corporate Governance (the Code) and complied
with the Code. The Committee also adopted the main
principles set out in the Higgs Report, reviewing the
role and effectiveness of non-executive directors, and
this report explains how the company has complied
with the principles and provisions of the new Combined
Code on Corporate Governance which will begin to
apply for the company in the 2005 financial year.
Shareholders will be invited to approve this report at
the company’s 2004 AGM.
The Board is ultimately responsible for both the
structure and amount of executive remuneration, but it
has delegated prime responsibility for executive
remuneration to the Committee. The terms of
reference of the Committee are available on the
company’s website at www.bt.com. The Committee’s
role is to set the remuneration policy and individual
remuneration packages for the Chairman and the
senior management team, comprising the executive
directors, members of the Operating Committee (OC)
and other senior executives reporting to the Chief
Executive. This includes approving changes to the
company’s long-term incentive plans, recommending
to the Board those plans which require shareholder
approval and overseeing their operation. In this role
the Committee also monitors the structure of reward
for executives reporting to the senior management
team and determines the basis on which awards are
granted under the company’s executive share plans.
The Committee met four times during the 2004
financial year. Sir Anthony Greener has chaired the
Committee since 18 July 2001. Other members of the
Committee who served during the financial year were:
&Maarten van den Bergh
&Louis Hughes
&Margaret Jay
&Carl Symon
The Chairman and Chief Executive are invited to
attend meetings. They are not present when matters
affecting their own remuneration arrangements are
considered. No director is involved in any decision
relating to his or her remuneration.
Non-executive directors who are not members of
the Committee are entitled to receive papers and
minutes of the Committee.
The Committee has access to professional
advisers, both from within the company and externally.
Towers Perrin (HR consultants); Ben Verwaayen, Chief
Executive; Ian Livingston, Group Finance Director; Alex
Wilson, Group HR Director and Larry Stone, Company
Secretary, provided advice that materially assisted the
Committee in relation to the 2004 financial year. The
Committee has agreed that Towers Perrin may advise
both the Committee and BT, and should be invited to
attend meetings when major remuneration policy
issues are being discussed. Towers Perrin provides BT
with a range of data and advisory services covering all
aspects of executive pay, bonus arrangements, shares
and benefits.
BT Annual Report and Form 20-F 200458
Report on directors’ remuneration