BT 2016 Annual Report Download - page 141

Overview The Strategic Report Governance Financial statements Additional information
147
Provision Policy
Notice period • 12 months’ notice by the company, six months’ notice by the executive director or Chairman (there is no
fixed expiry date).
Termination payment • In lieu of giving an executive director or the Chairman 12 months’ notice, BT may terminate the
director’s contract and make a payment in lieu of salary to which the director was entitled if he or she
had received notice and the value of contractual benefits for the period.
• In respect of the executive directors, the payments in lieu will be payable in equal monthly instalments
until the date on which the notice period would have expired or (if earlier) the date on which the
director secures alternate employment with the same or higher basic salary or fee. In the event that
the director secures alternate employment at a basic salary of £30,000 or higher, but lower than their
salary, payment in lieu will be reduced by the amount of the new lower salary received. The Board
retains the right to lower the payment in lieu of the directors new employment if it considers the new
employment terms of the director are not appropriately balanced between basic salary and other
elements, and may cease making payments entirely where the Board is not satisfied the director is
making reasonable eorts to secure alternative employment.
• In respect of the Chairman, the payment in lieu will be payable in equal monthly instalments until the
earlier of 12 months from the date of termination or the date the Chairman secures alternate full-
time employment.
Remuneration and
benets
• Participation in the incentive plans ISP, DBP and annual bonus, saveshare and directshare, is non-
contractual. The Chairman does not participate in the ISP, DBP or any annual bonus.
• Other benefits include pension (including life cover), dental cover, car, private health care (including
spouse and children under age of 18 or 21 if in full time education), telecommunication facilities,
home security and professional subscriptions. The Chairman does not receive pension benefits but is
entitled to all other benefits.
• The Chairman receives an all-inclusive fee for the role.
ISP awards have been shown at face value, with no share price
growth or discount rate assumptions. All-employee share plans
(saveshare and directshare) have been excluded, as have any legacy
awards held by executive directors.
Chief Executive – performance scenario chart
Fixed remuneration Variable remuneration Long-term incentives
8 7 5 26 34 1 0 £m
Minimum
On-target
Maximum
100%
38%
34%28%
17%
31%52%
£3.4m
£7.4m
£1.3m
Group Finance Director – performance scenario chart
Fixed remuneration Variable remuneration Long-term incentives
43.5 2.5 13 1.520.5 0£m
Minimum
On-target
Maximum
100%
43%
34%23%
21%
34%45%
£3.9m
£2.0m
£0.85m
Fixed pay is calculated as follows:
Salary
£000
Benefits
£000
Pension
£000
Total
fixed pay
£000
Chief Executive 950 43 285 1,278
Group Finance Director 630 32 189 851
Other Remuneration Policies
Malus
Under the terms of the DBP and ISP, if following the grant of
an award, facts subsequently become known to the committee
which would justify a reduction in the award, the committee may
reduce the number of shares under award to take account of this,
including to nil. In order to retain exibility, the events under which
this may apply are not formally stipulated in the rules. However,
for illustration, such events may include, for example, miss-
statement of the financial accounts, fraud or material failure of risk
management. Other elements of remuneration are not subject to
recovery arrangements.
Consideration of shareholder views
The committee is strongly committed to an open and transparent
dialogue with shareholders on remuneration matters. We believe
that it is important to meet regularly with our key shareholders to
understand their views on our remuneration arrangements and
discuss our approach going forward.
The committee will continue to engage with shareholders going
forward and will aim to consult on any material changes to the
application of the approved remuneration policy or proposed
changes to the policy.
Non-executive directors
The Board aims to recruit high-calibre Non-Executive Directors
(NEDs), with broad commercial, international or other relevant
experience.
The table of remuneration policy for NEDs is set out on page 110.