Carphone Warehouse 2014 Annual Report Download - page 47

ELEMENT
PURPOSE AND
LINK TO STRATEGY OPERATION OPPORTUNITY
ASSESSMENT OF
PERFORMANCE
Annual
performance
bonus (short-term
variable)
Annual performance
bonuses are in place
to incentivise the
delivery of stretching,
near-term business
targets based on our
business strategy.
These bonuses
provide a strong link
between reward
and
performance and drive
the creation of further
shareholder value.
The principles and
approach are
consistently applied
across
the Group
ensuring
alignment
to a common vision
and strategy.
They are based on a
balanced approach
ensuring
appropriate
behaviours
are
adopted and
encouraging a
longer-term focus.
All measures and targets are reviewed
andset by the Committee at the beginning
ofthe financial year.
The bonus scheme has targets based on
financial measures including profit and cash
and a balanced scorecard. The balanced
scorecard may include financial, employee,
customer and strategic measures. The
weighting of measures will be determined by
the Committee each year. Financial measures
(e.g. profit) will represent the majority of the
bonus, with other measures representing
the balance.
Bonus payments are subject to a minimum
profit gate being achieved before payment
isdue against any objectives achieved.
The annual bonus is typically paid in June
based on the audited performance over the
previous financial year.
With effect from the 2014–15 financial year
clawback and/or malus provisions will be
introduced to the Group’s annual bonus
scheme enabling performance adjustments
and/or recovery of sums already paid.
The Chairman, Deputy Chairman and
non-executive directors do not receive
anannual performance bonus.
The Committee retains the discretion to
establish additional bonus schemes and
toset stretching targets focused on the
delivery of specific business strategies in
theevent of substantial business change.
Maximum annual
bonus potential
of200% of salary.
No bonus is payable
if the minimum profit
gate is not achieved.
Performance is
reviewed by the
Committee using
itsjudgement
wherenecessary
toassess the
achievement
oftargets.
The Committee
retains the
discretion to adjust
downwards bonus
payments where
achievement of
targets would
result in a payment
of a bonus at a
level which would
not beconsistent
with the interests
of theCompany
and its
shareholders.
Clawback and/or
malus provisions
will be introduced
with
effect from the
2014–15
financial
year.
Mid-term
incentive plan
This incentive
planwill only be
implemented
shouldthe Merger
complete.
The purpose
wouldbe to
motivateselected
key individuals to
deliver specific
objectives relating
tothe Merger
andreward them
fordoing so.
Executive directors and selected other key
individuals would be eligible to participate
inthis scheme.
Pay-outs under this scheme will be made
only if participants deliver exceptional
performance over and above the
businessplan.
Maximum bonus
potential of up to
200% of salary.
The performance
conditions for this
scheme would be
based on the
achievement of
specific objectives
relating to the
successful
implementation
ofthe Merger and
integration of the
businesses, such
asthe delivery of
targeted levels
ofsynergies.
It is intended that
performance
conditions
applicable to this
scheme will be set
at a stretching level
with separate and
incremental targets
to those rewarded
by the annual
bonus plan.
Carphone Warehouse Group plc
Annual Report 2014 45
CORPORATE GOVERNANCE