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Experian Annual Report 2010 Governance72
2009/10 bonus
The Remuneration Committee set stretching targets for the annual bonus in 2009/10 which required broadly upper quartile
levels of performance in order for maximum bonus to be earned. In what continued to be an extremely challenging business
environment for both Experian and our clients, the performance of the Group exceeded the stretching performance targets
set by the Committee. In the light of this excellent achievement, in uncertain and testing market conditions, maximum bonus is
payable to the executive directors in respect of 2009/10.
The executive directors have all elected to defer 100% of their bonus earned in respect of the 2009/10 nancial year into the CIP.
For this year, the Committee has determined that matching shares will be awarded on a 2:1 basis. It is intended that the release of
50% of the matching share awards will be subject to the achievement of a growth in PBT performance condition and will vest as
shown in the table below. The Committee considers growth in PBT to be an appropriate measure as this represents one of the
key drivers of the business and is aligned with Experian’s core growth strategy.
In order to broaden the success factors against which long-term performance is assessed, it is intended that the other 50% of
the matching share awards will vest subject to the achievement of a stretching three-year cumulative operating cash ow target.
This target has been calibrated to be similarly stretching as the growth in PBT ranges shown above and is based on a cash
conversion rate of at least 90% on average, representing what is expected by the Committee to be broadly equivalent to upper
quartile performance. The Committee considers cumulative operating cash ow to be an appropriate measure as it is a key
metric for the business, particularly in the more challenging economic climate.
2010/11 bonus
It is intended that annual bonus arrangements and the operation of the CIP for executive directors will remain unchanged
for the 2010/11 nancial year. The nal performance conditions and targets for matching shares awarded under the CIP will
be determined shortly before the awards are made in June 2011 and will be disclosed at the appropriate time. However, the
Committee undertakes to ensure that any targets, whilst they must be seen as achievable to retain and motivate executives
during the deferral period, must be sufciently stretching to deliver signicant shareholder value.
Experian performance share plan (‘Experian PSP’)
The Experian PSP was approved by GUS plc shareholders at the Extraordinary General Meeting (‘EGM’) held on 29 August 2006.
Performance shares are Experian shares for which no exercise price is payable. Shares are allocated subject to performance
conditions, which are measured over a three-year performance period, with any vesting occurring three years from the date of
grant. Performance conditions for awards under the Experian PSP will be determined by the Committee in advance of grant.
Dividend equivalents accrue on these awards.
2009/10 Experian PSP awards
Details of Experian PSP awards made to executive directors in June 2009 are given in the table titled ‘Performance share plans’.
75% of these awards are subject to a growth in PBT performance condition measured over a three-year period as shown in the
table below. The Committee considers growth in PBT to be an appropriate measure as this represents one of the key drivers of
the business and is aligned with Experian’s core growth strategy.
Report on directors’ remuneration (continued)
Average annual growth in PBT over three years Percentage of award vesting
Less than 5% 0%
5% 25%
11%* 100%
Between 5% and 11% Between 25% and 100% pro rata
* This level of growth in PBT is expected by the Committee to be broadly equivalent to upper quartile performance
Average annual growth in PBT over three years Percentage of award vesting
Less than 4% 0%
4% 25%
8%* 100%
Between 4% and 8% Between 25% and 100% pro rata
* This level of growth in PBT was expected by the Committee to be broadly equivalent to upper quartile performance, at the time of grant
80