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80 Experian Annual Report 2011
Report on directors’ remuneration continued
In addition, vesting of matching shares will be subject to the Committee being satisfied that the vesting is not based on financial results
which have been materially misstated.
Annual bonus and CIP in respect of the year ending 31 March 2012
It is intended that annual bonus arrangements and the operation of the CIP for executive directors will remain unchanged for the year ending
31 March 2012. For matching shares awarded under the CIP, the final performance measures and targets will be determined shortly before
the awards are made in June 2012 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, are sufficiently stretching in
order to deliver significant shareholder value.
Experian Performance Share Plan (the ‘PSP’)
Under the PSP, shares are awarded to participants subject to the achievement of performance conditions, which are measured over a
three-year period. The maximum award under the PSP is normally 200% of base salary, although up to 400% of salary may be awarded under
exceptional circumstances. Any vesting occurs three years from the date of grant. Performance conditions for awards under the PSP are
determined by the Committee in advance of grant. Dividend equivalents accrue on these awards. Awards under the PSP may vest early in
the event of a change of control.
PSP awards made in the year ended 31 March 2011
Details of PSP awards made to executive directors in June 2010 are given in the table entitled ‘Performance Share Plan’. 75% of these
awards are subject to a growth in PBT performance condition, measured over a three-year period (25% vesting for growth in PBT of 5%
p.a. on average, increasing to 100% vesting for growth in PBT of 11% p.a. on average). The Committee considers this to be an appropriate
performance measure as it reflects one of Experian’s key strategic objectives (driving profitable growth). The remaining 25% of the awards
made in June 2010 are subject to a TSR performance condition, with vesting according to the percentage extent to which Experian’s TSR
out-performs the TSR of the FTSE 100 Index, measured over a three-year period (25% vesting for TSR performance equal to that of the
FTSE 100 Index increasing to 100% vesting for TSR performance which out-performs the FTSE 100 Index by 25% or more). The Committee
determined that TSR was an appropriate performance measure as it represents value delivered for shareholders relative to Experian’s
peers. These performance conditions are illustrated in the graphs below.
PSP awards made in the year ended
31 March 2011 (25% of an award)
100%
75%
50%
25%
0%
% extent to which Experian’s TSR outperforms
the TSR of the FTSE 100 Index over three years
% of shares vesting
0% 25%
PSP awards made in the year ended
31 March 2011 (75% of an award)
100%
75%
50%
25%
0%
Experian’s average annual PBT growth over three years
% of shares vesting
5% 11%
In addition, vesting of these awards will be subject to satisfactory ROCE performance, to ensure that earnings growth is delivered in a
sustainable and efficient way.
87