Experian 2014 Annual Report Download - page 82

78 Governance • Report on directors’ remuneration
Report on directors’ remuneration
Chairman’s introduction
and highlights
The Remuneration Committee (the
‘Committee’) is pleased to present its
annual report on directors’ remuneration
(the ‘Report’) for the year ended
31 March 2014. Shareholders will be
invited to approve the Report at the
Company’s Annual General Meeting
(‘AGM’) on 16 July 2014.
Although Experian plc is incorporated
and registered in Jersey we have drawn
up this Report in line with the UK
Large and Medium-sized Companies
and Groups (Accounts and Reports)
(Amendment) Regulations 2013, as well
as the UK Financial Conduct Authority
Listing Rules and the UK Corporate
Governance Code.
The Report is in two sections:
• the Directors’ remuneration
policy report which explains the
remuneration policy that we propose
to apply from the 2014 AGM, subject
to obtaining shareholder support at
that meeting; and
• the Annual report on remuneration
which sets out how we implemented
our remuneration policy for the
year ended 31 March 2014 and how
we propose to implement it from
16 July 2014 on the assumption that
shareholder support is given at the
2014 AGM.
The Company’s remuneration policy has
been in place since our flotation in 2006.
Its longevity is testament to its success in
balancing the twin objectives of:
• supporting our strategic aims to
deliver long-term sustainable growth
resulting in superior total shareholder
returns; and
• providing sufficient remuneration
and appropriate reward to our
executive directors.
The Committee believes that the policy
is flexible enough to achieve this. It is
also comfortable that the policy does not
encourage undue risk taking, given that a
substantial part of the total remuneration
package is weighted towards long-term
performance, the annual bonus includes
a significant deferred element, and
clawback provisions are in place.
As a result of the Board changes detailed
in the Corporate governance report, the
Committee has devoted considerable
time to determining appropriate
remuneration packages for the directors.
Details of these are set out in the Annual
report on remuneration.
The Company has performed well over
the past year and our results again
demonstrate Experian’s ability to perform
strongly despite facing pressures in some
markets and against a backdrop of low
global economic growth. Having achieved
Benchmark PBT growth of 8%, for bonus
purposes, on a constant currency basis,
the executive directors are eligible for a
bonus of 100% of salary, equivalent to
50% of the maximum. Don Robert and
Brian Cassin have elected to defer all of
their bonus into the Co-investment Plans
(‘CIP’), which is a strong signal of their
confidence in Experian and strengthens
the alignment of their interests with those
of shareholders.
Longer-term performance has also
been strong. Over the three years ended
31 March 2014, Benchmark PBT has
grown by an annual average of 13.1%
on a constant currency basis, and our
cumulative operating cash flow was
US$3.6bn.
In addition, the Company’s total
shareholder return (‘TSR’) over that period
was 18.8% above that of the FTSE 100.
These are the performance measures
on which the vesting of the Performance
Share Plan (‘PSP’) and the CIP awards are
based. As a result of this performance,
88.1% of the awards under the PSP
and 96.8% of the awards under the CIP
will vest in June 2014. Full details of the
outcomes are set out in the Annual report
on remuneration.
The Committee is comfortable that the
levels of vesting are commensurate with
the underlying financial performance of
the business and therefore considers
that the payouts reflect our view that
exceptional rewards should only be
paid for exceptional performance.
We will continue to set performance
targets that are both appropriately
challenging and, if met, will represent
value creation for shareholders, while
being achievable and motivational for
management. We will aim to ensure
that they are equally stretching from
year to year, whatever the change in the
economic climate or trading conditions.
In summary, the Committee seeks to
balance the interests of stakeholders and
considers that its aims are currently being
met. We hope that our shareholders agree
with our approach and look forward to
their support at the 2014 AGM.
Roger Davis
Chairman of the
Remuneration Committee
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