Experian 2010 Annual Report Download - page 73

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71
Introduction
2 – 11
Business review
12 – 51
Financial statements
85 – 160
Governance
52 – 84
Pensions
The pension age is 60 for directors with dened benet arrangements which broadly provide a pension of two thirds ofnal
salary, ill health and dependants’ pensions in addition to life assurance cover during the period of employment. Incentive
payments (such as annual bonuses) are not pensionable.
The Group has had arrangements in place for a number of years which were designed to ensure that UK directors who were
affected by the 1989 HM Revenue and Customs earnings cap were placed in broadly the same position as those who were not.
With the agreement of the trustees of the pension scheme, the Group decided to retain a notional earnings cap for its existing
and future employees, with the exception of new senior executives who are pensioned on full basic salary up to the Lifetime
Allowance. The Experian Pension Scheme was closed to new members on 31 December 2008, subject only to exceptions
approved by the Remuneration Committee on a case by case basis.
The Group has put security in place for the unfunded pension entitlements of UK executives affected by the earnings cap, by
establishing Secured Unfunded Retirement Benets Schemes (‘SURBS’). Further details are provided under the disclosure of
the arrangements for each director.
In the US, Experian provides a Personal Investment Plan (401k) which all US employees, including directors, are eligible to join.
This is a dened contribution arrangement to which participants are able to contribute up to 50% of salary, up to a maximum
salary and participant contribution limit established by the IRS, each calendar year.
Variable remuneration
Annual bonus plan and co-investment plan
Annual bonuses are awarded for achieving prot growth targets. The Committee believes that linking incentives to prot growth
helps to reinforce Experian’s growth strategy. The maximum bonus opportunity for executive directors is 200% of base salary.
However, this level of annual bonus is only payable if Experian’s nancial performance surpasses stretching nancial targets
designed to deliver exceptional results to shareholders. During the year, Kepler advised on the calibration of these targets using
benchmarks that reect stretching internal and external expectations. The benchmarks used include: broker earnings estimates;
earnings estimates for competitors; straight-line prot growth consistent with median/upper quartile shareholder returns over
the next three to ve years; latest projections for the current year; budget; strategic plan; and long-term nancial goals.
From 2009 onwards, executive directors have been offered the opportunity to defer receipt of between 50% and 100% of their
bonus and invest it in Experian shares (‘invested shares’) under the Experian co-investment plan (‘CIP’). The invested shares
are matched with an additional award of shares (‘matching shares’) with the maximum match being calculated on a 2:1 basis.
The maximum matching opportunity is determined by the Committee at the time the matching share awards are made, taking
into account overall company performance and the fair value of total remuneration. The release of invested shares and matching
shares is deferred for three years and the release of the matching shares is subject to performance conditions which are
measured over a three-year period. Dividend equivalents accrue on these awards. If a participant resigns during the three-year
period they will forfeit the right to the matching shares and the associated dividends, although they would be entitled to retain
any invested shares.
2008/09 CIP awards
The executive directors elected to defer 100% of their annual bonus earned in respect of the 2008/09 nancial year into the CIP
and were given the opportunity to match their deferral on a 1:1 basis. Details of the awards made are given in the table titled ‘GUS
and Experian co-investment plans and Experian reinvestment plans’. The release of the matching shares awarded in June 2009
is subject to the achievement of growth in PBT of 3% per annum on average, measured over a three-year period. The Committee
selected PBT as the performance metric for the matching shares in order to incentivise participants to drive sustained prot
growth in line with the long-term business strategy.