BT 2016 Annual Report Download - page 133

Overview The Strategic Report Governance Financial statements Additional information
139
The Remuneration Committee
This section describes the membership and role of the committee.
Who we are
Tony Ball chairs the Remuneration Committee , made up of
independent non-executive directors, which met six times during
the year.
Our membership and meeting attendance are set out below.
Committee members
Meetings
Member Eligible to attend Attended
Tony Ball (Chairman) 6 6
Karen Richardson 6 6
Nick Rose 6 6
Other Remuneration Matters
In addition to the committee members, the Chairman and Chief
Executive are invited to attend meetings, except in instances where
their own remuneration is discussed, or other circumstances where
their attendance would not be appropriate.
The committee regularly consults the Chief Executive, the Group
HR Director, the HR Director, Reward and Pensions, and the Group
General Counsel & Company Secretary.
Advisers
During the year, the committee received independent advice
on executive remuneration matters from Deloitte LLP. Deloitte
received £117,950 in fees for these services. The fees are charged
on a time spent basis in delivering advice that materially assisted
the committee in their consideration of matters relating to
executive remuneration.
Deloitte is a founder member of the Remuneration Consultants
Group and as such, voluntarily operates under the code of conduct
in relation to executive remuneration consulting in the UK.
The committee appointed Deloitte to the role of independent
advisers to the committee in 2012 following a competitive tender
exercise conducted by the committee.
The committee is comfortable that the Deloitte engagement
partner and team, who provide remuneration advice to the
committee, do not have connections with BT that may impair
their independence or objectivity.
In addition, during 2015/16, Deloitte also provided the company
with advice on corporate and indirect taxes, assistance with
regulatory, risk and compliance issues and additional
consultancy services.
Dilution
For a number of years we generally used treasury shares to satisfy
the exercise of share options and the vesting of share awards under
our employee share plans. We intend to use both treasury shares
and shares purchased by the BT Group Employee Share Ownership
Trust (the Trust) for share option exercises, and shares purchased
by the Trust for the vesting of executive share awards in 2016/17.
At the end of 2015/16, shares equivalent to 1.98% (2014/15:
3.81%) of the issued share capital (excluding treasury shares)
would be required for all share options and awards outstanding.
Of these, we estimate that for 2016/17, shares equivalent to
approximately 0.30% (2014/15: 0.72%) of the issued share
capital (excluding treasury shares) will be required for the
all-employee share plans.
Outside appointments
The committee believes that there are significant benefits, to
both the company and the individual, from executive directors
accepting non-executive directorships of companies outside BT.
The committee will consider up to two external appointments
(of which only one may be to the board of a major company),
for which a director may retain the fees.
Gavin Patterson is a non-executive director of British Airways
for which he receives an annual fee of £50,000 and the benefit
of free BA ights.
Voting at the 2015 Annual General Meeting
The votes cast in respect of the Annual Remuneration Report at
the Annual General Meeting held on 15 July 2015 were:
Votes cast in
favour %Votes cast against %
Approve Annual
Remuneration Report 5,144,960,474 98.60% 72,885,498 1.40%
74,716,964 votes were withheld against approving the Annual
Remuneration Report. A vote withheld is not counted when
calculating voting outcomes.
Committee evaluation
The committee reviews its performance with Board members and
other participants, including through the annual Board evaluation.
Independent non-executive directors’ letters
of appointment
Each independent non-executive director has an appointment
letter setting out the terms of his or her appointment. They do
not have service contracts. The letter includes membership of any
Board committees, the fees to be paid and the time commitment
expected. We ask each non-executive director to allow a minimum
commitment of 22 days each year, subject to committee
responsibilities, and to allow slightly more in the first year in
order to take part in the induction programme. The actual time
commitment required in any year may vary depending on business.
We highlight that additional time may be required if the company
is going through increased activity.
Appointments are for an initial period of three years. During that
period, either party can give the other at least three months’
notice of termination. All Board appointments automatically
terminate in the event of a director not being elected
or re-elected by shareholders at the Annual General Meeting each
year. The appointment of a non-executive director is terminable on
notice by the company without compensation. At the end of the
period, the appointment may be continued by mutual agreement.
Further details of appointment arrangements for independent
non-executive directors are set out on page 140.
The appointment letter also covers matters such as confidentiality,
data protection and BT’s share dealing code.
Tim Höttges was appointed as a non‑independent non‑
executive director, following Deutsche Telekom’s nomination and
his appointment letter reects the terms of the Relationship
Agreement between BT and Deutsche Telekom.