Marks and Spencer 2012 Annual Report Download - page 58

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Governance Marks and Spencer Group plc Annual report and financial statements 2012 56
Remuneration report continued
What are the key elements of remuneration for executive directors?
The Committee considers the key elements in total to ensure there is the right balance between reward for short-term success
and long-term growth. For executive directors, this can be summarised as follows:
Fixed remuneration Policy for 2012/13 Delivery in 2012/13
Base Pay Reviewed against:
–salary levels in comparably sized companies
and major retailers e.g. FTSE 25-75;
–economic climate, market conditions and
Company performance;
–the level of pay awards in the rest of the
business; and
–the role and responsibility of the
individual director.
–monthly in cash
–reviewed annually with any increases normally
awarded from 1 January
Benefits –provided on a market-competitive basis
–aligned to total reward structure for
all employees
–salary supplement in lieu of membership
of the Group Pension Scheme
–life assurance cover
–car or car cash allowance plus driver
–all-employee share schemes (Save As
You Earn)
–employee product discount
Variable remuneration Policy for 2012/13 Delivery in 2012/13
Annual Bonus Scheme:
with compulsory deferral
into shares
–drive profitability and strategic change
across the whole organisation
–stretching targets required to achieve
maximum payment
–Group PBT with an individual
performance element linked to delivery
of key strategic objectives.
–aligned to shareholder interests through
annual financial performance as well as
delivery of the overall business strategy
–bonus potential of up to 200% of salary
for ‘maximum’ performance
–60% of bonus based on Group PBT targets
–40% of bonus based on individual objectives
–compulsory deferral of 50% of bonus earned
into shares
–deferred shares vest after three years, subject
to continued employment
Performance
Share Plan
–primary long-term incentive
–link individual reward with long-term
performance of the Company
–aligned to shareholder interests and specifically
with the Company’s stated strategic objectives.
–targets based on cumulative EPS (Earnings
Per Share), ROCE (Return on Capital
Employed), and Revenue growth across
UK, International and Multi-channel
business segments
–annual awards
–plan provides for an individual awards of
up to 300% of salary, although the Committee’s
intention is that awards will conventionally be
referenced to 250% of salary.
–awards may vest after three years subject to
achievement of performance targets
–each element of performance will be assessed
independently