Carphone Warehouse 2007 Annual Report Download - page 29

Download and view the complete annual report

Please find page 29 of the 2007 Carphone Warehouse 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 80

  • 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

Remuneration Report
Compliance
This Remuneration Report has been prepared in accordance with the Directors’ Remuneration Report Regulations 2002 (“Regulations”) and the Combined Code
on Corporate Governance (“Code”). The constitution and operation of the Remuneration Committee are in compliance with the Code. In framing its remuneration
policy the Committee has given full consideration to the matters set out in Schedule A of the Code. As required by the Regulations, a resolution to approve this
Report will be proposed at the Annual General Meeting to be held on 26 July 2007 (“AGM”).
The Regulations require the Company’s auditors to report to the members on the “auditable part” of this Report (marked *) and to state, in their opinion, that this
part of the Report has been properly prepared in accordance with the Companies Act 1985 (as amended by the Regulations).
Remuneration Committee
Responsibility for the establishment of overall remuneration policy for the Group lies with the Board of Directors. The Remuneration Committee is responsible for
making recommendations to the Board on the remuneration of the Chairman, Executive Directors and senior managers. The terms of reference of the Committee
are available on the Group’s website (www.cpwplc.com) or on request from the Company Secretary.
The Committee’s current composition is Sir Brian Pitman (Chairman). Steven Esom, David Mansfield, Baroness Morgan, Adrian Martin and David Grigson (who was
appointed to the Committee on 24 April 2007) all of whom are Independent Non-Executive Directors. None of the members of the Committee has any personal
financial interest, other than as shareholders, in the matters to be decided by the Committee, no potential conflicts of interest arising from cross-memberships and
no day-to-day involvement in running the Group’s business.
Mercer Human Resource Consulting (“Mercer”) were appointed by the Committee as lead advisors in January 2007 and conducted a total reward survey for
Executive Directors and other senior managers. Mercer have no other connection with the Group. Deloitte & Touche LLP (“Deloitte”) provided advice to the
Committee on employment tax and the administration of share option and SAYE schemes. Deloitte are the Group’s auditors and provide other services to the
Group as set out in the Corporate Governance Report on pages 22 to 24. Advice was also provided by New Bridge Street Consultants LLP in relation to the
valuation of share schemes. The Deputy Chairman, the Group Director of Human Resources and the Company Secretary also provided internal advice in respect
of matters raised by the Committee. No Director nor any person advising the Committee plays a part in any discussion about his or her own remuneration.
Remuneration policy
The primary aim of the Committee is to ensure that remuneration aligns the interests of management and shareholders and reinforces behaviour which will lead
to the continued long-term development of the business.
The Committee makes its recommendations to the Board by taking into account:
•The experience of Executive Directors and other senior managers;
•The Group’s competitiveness in the market place, assessed through independent external market comparisons;
•The growing international nature of the Group; and
•The development of new business streams and the added complexity to the business.
The growth of the Group has been such that it continues to be appropriate to compare against companies in the FTSE 100. Alongside this, a benchmark has been
established of the 15 companies above and below the Company in terms of market capitalisation.
The overall remuneration policy is to provide competitive remuneration packages to attract, retain and motivate executives of the calibre required, and to align their
interests with those of shareholders by relating a significant element of the remuneration package to specific performance measures. In particular, the Committee
has recognised that the complexity of the Group continues to evolve and that the remuneration policy should be adjusted to reflect the calibre of executives
needed to continue to develop and grow the business.
The approach is to set fixed remuneration at market median levels and to offer variable rewards, linked to the performance of the Group, which can provide
significant overall levels of remuneration for exceptional performance and shareholder value creation. Approximately 72% of Executive Directors’ total remuneration,
including share awards, earned in the period was performance related. Charles Dunstone does not receive long-term incentive share awards.
Components of remuneration
The main fixed and performance–related elements of remuneration that can be awarded to Executive Directors are as follows:
•basic salary, benefits and pension contribution (fixed);
•annual performance bonus (variable);
•share options (variable); and
•Performance Shares (variable).
The Company operates a minimum shareholding policy, requiring Executive Directors to build up and retain a shareholding in the Company of at least 100% of their
annual salaries.
Salaries and benefits
Executive Directors’ basic salaries are reviewed annually and take into account the roles, responsibilities, performance and experience of the individuals and
information obtained from published market data on the salary rates for similar positions in companies of a similar size. Salaries are reviewed on 1 July each year.
Following the most recent review, salaries from 1 July 2007 will be held at their current levels.
25
Governance Financial Statements
www.cpwplc.com