Experian 2014 Annual Report Download - page 86

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Directors’ remuneration policy continued
Element and
link to strategy Operation
Maximum potential value
and payment at target
Performance metrics,
weightings, relevant time
period and clawback
Share Option Plan (‘SOP’)
Provides focus on increasing
Experian’s share price over
the medium to longer term.
Options are granted with an exercise price equivalent to
market value of an Experian share at the date of grant. These
vest subject to achieving performance targets that are tested
over a three-year period and are exercisable for a seven-year
period thereafter.
No option grants have been made since 2009 and the
Committee has agreed that no further awards will be made,
unless warranted by exceptional circumstances such as
recruitment.
Normal maximum awards
are 200% of salary, however
the rules of the SOP allow
awards of up to 400% of
salary.
Minimum vesting of awards
is zero.
Nothing vests for below-
target performance.
For target performance, 25%
of the options vest.
For maximum performance,
100% of the options vest.
The vesting of options
is based on financial
performance targets.
Chairman and non-executive director (‘NED’) fees
Attract individuals
with a broad range of
experience and skills,
to oversee the
implementation
of our strategy.
The Chairman is paid a fee in equal instalments. The
Group provides the Chairman with a limited range of
benefits which includes a company car or allowance,
healthcare and tax advice.
The NEDs are paid a basic fee plus additional fees for
chairing a Board Committee and for the role of Deputy
Chairman / Senior Independent Director.
NED fees are paid in equal instalments during the year.
NEDs receive an additional fee where attendance at
Board meetings involves intercontinental travel from
their home location. The Company may settle any tax due
on travel expenses incurred by the Chairman and NEDs.
The Committee sets the
Chairman’s fees and benefits
at a level it considers
appropriate against
comparable roles in
similar companies.
NED fees are set by the
Board as a whole.
Fees are normally reviewed
every two years, against
those of Chairmen and
NEDs in companies of
similar size, international
reach and complexity.
No performance-related
arrangements are in
place for the Chairman
or the NEDs.
Notes
The remuneration policy for executive directors, and indeed for around 600 members of our senior management, is more
heavily weighted towards variable pay than for other employees. This makes the greater part of their remuneration conditional
on successfully delivering our business strategy and, in turn, high levels of corporate performance and shareholder returns.
This underpins the link between creating value for shareholders and the pay of our most senior leaders.
The performance measures used in the annual bonus and the long-term incentive plans are all financial or share-based. The
performance-management process, which we use throughout Experian, assesses executives against both financial and non-
financial objectives. Performance against these individual objectives ultimately supports our financial performance, so the
Committee believes it is appropriate that financial metrics remain the key measures. These seek to ensure the underlying
financial performance of the business, while clearly aligning shareholders and executive directors.
For all elements of variable pay, the growth targets are based on benchmarks that reflect stretching internal and external
expectations. These benchmarks include brokers’ earnings estimates, competitors’ earnings estimates, straight-line profit
growth consistent with median or upper-quartile shareholder returns, latest projections for the current year, budget and
strategic plan. Targets are structured as a sliding scale with maximum rewards only payable for the achievement of significant
levels of performance. We use external consultants to calculate the extent to which the performance conditions have been met.
Governance • Report on directors’ remuneration