BT 2016 Annual Report Download - page 130

BT Group plc
Annual Report 2016
136
Comparison of Chief Executive remuneration
to Total Shareholder Return
This graph illustrates the performance of BT Group plc measured
by TSR relative to a broad equity market index over the past seven
years. We consider the FTSE100 to be the most appropriate
index against which to measure performance, as BT has been a
constituent of the FTSE100 throughout the seven‑year period,
and the index is widely used. TSR is the measure of the returns that
a company has provided for its shareholders, reecting share price
movements and assuming reinvestment of dividends.
FTSE100BT
BT’s TSR performance vs the FTSE100
250
150
50
350
450
550
650
750
Mar 16Mar 15Mar 14Mar 13Mar 12Mar 11Mar 10Mar 09
Source: Datastream
The graph shows the relative TSR performance
of BT and the FTSE100 over the past seven years.
History of Chief Executive remuneration
Year end Chief Executive
Total rem
£000
Annual bonus
(% of max)
ISP vesting
(% of max)
2016aGavin Patterson 5,396 45% 82.01%
2015 Gavin Patterson 4,562 58% 67.4%
2014bGavin Patterson 2,901 62% 78.7%
Ian Livingston 4,236 35% 63.4%
2013 Ian Livingston 9,402 65% 100%
2012 Ian Livingston 8,520 73% 100%
2011 Ian Livingston 4,009 79% 0%
2010 Ian Livingston 3,556 71% 0%
a The total remuneration figure includes the ISP award as CEO BT Retail and the first award as Chief
Executive, granted in 2013.
b
Ian Livingston stepped down on 10 September 2013 and Gavin Patterson took over from that
date.
Percentage change in Chief Executive
remuneration (comparing 2014/15
to 2015/16)
The table opposite illustrates the increase in salary, benefits and
annual bonus for the Chief Executive and that of a representative
group of the company’s employees.
For these purposes, we have used the UK management and
technical employee population representing around 21,500
people because they also participate in performance related pay
arrangements on a similar basis as executive directors.
Salary BenefitsaBonusb
% Change in Chief Executive
remuneration 2.5%5.5%–20%
% Change in comparator groupc2.5% 0% –20%
a The increase in benefits for the Chief Executive was around £2,000.
b The bonus comparator is based on cash bonus only to give a better like for like comparison.
c Comparator group is the UK management and technical employee population representing around
21,500 individuals.
Relative importance of spend on pay
The table below illustrates the change in total remuneration and
dividends and share buy‑back paid.
Area 2015/16 (£m) 2014/15 (£m) % Change
Remuneration paid to all
employees 4,639 4,551 2%
Dividends/share buybacks 1,390 1,244 12%
Implementation of Remuneration Policy
in 2016/17
Base salary
The committee continues to position salaries towards the lower
end of market practice for our comparator companies. Comparator
company information is provided by Deloitte, independent adviser
to the committee, and consists of companies of a similar size
or market capitalisation and/or companies which have a similar
business mix and spread as BT or operate in comparable markets.
Gavin Patterson will receive a salary increase to £996,825 per
annum eective June 2016, an increase of 2.5%.
Tony Chanmugam will not receive a salary increase this year.
The incoming Group Finance Director will receive a salary of
£700,000 a year.
Benets
The committee has set benefits in line with the Remuneration
Policy set out on pages 142 to 148. There are no changes
proposed to the benefit framework for 2016/17.
Pension
Current levels of pension provision for 2016/17 are the same as
for 2015/16. Executive directors receive an annual amount equal
to 30% of salary in lieu of pension provision.
Clawback
The clawback provisions introduced in 2015/16 will continue
for annual bonus payments relating to the 2016/17 financial
year paid in May 2017, and for ISP awards made in June 2016.
The annual bonus clawback will apply for one year following
payment. The ISP clawback arrangements may be enforced by the
committee in the two year period post‑vesting of any awards.