Marks and Spencer 2013 Annual Report Download - page 64

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Governance Marks and Spencer Group plc Annual report and financial statements 2013 62
Remuneration report continued
Executive Share Option Scheme: long-term incentive
The Executive Share Option Scheme was adopted at the 2005
AGM but there is currently no intention to use the scheme on a
regular basis. No grants were awarded under the Scheme for
2012/13. The Committee will continue to review the use of the
scheme and retain the flexibility to grant awards if appropriate.
A malus provision will take effect for any awards granted
from 2013.
All-Employee Share Schemes: long-term incentive
Sharesave, the Company’s Save As You Earn (SAYE) scheme,
was approved by shareholders at the 2007 AGM for a ten year
period. Executive directors can participate in the scheme which
is open to all employees.
What were the outcomes in 2012/13 for the short-term and long-term incentive schemes?
Annual Bonus Scheme outcome for 2012/13
In 2012/13, 60% of the executive directors’ bonus was based on Group PBT performance with the remaining 40% based on the
achievement of individual objectives, independent of Group PBT (and subject to achieving the ‘threshold’ Group PBT target).
Summary of bonus objectives
Marc Bolland John Dixon Steve Rowe Steven Sharp Alan Stewart Laura Wade-Gery
Financial
measure
Group PBT Group PBT Group PBT Group PBT Group PBT Group PBT
Collective
objectives
Total UK operating
costs
Total UK operating
costs
Total UK operating
costs
Total UK operating
costs
Total UK operating
costs
Total UK operating
costs
GM & Food
operating costs
Food operating
costs
Marketing operating
costs
Finance, IT and
Logistics operating
costs
Multi-channel
operating costs
Individual Plan A
objectives
Individual Plan A
objectives
Individual Plan A
objectives
Individual Plan A
objectives
Individual Plan A
objectives
Individual Plan A
objectives
Examples of
achievement
against
business area
objectives
Increased online and
International
GM and Food sales
Increased food
innovation and
focused on value
Continued food
innovation and
focused on value
Improved in-store
presentation
Enhanced reporting
for information and
planning
Increased UK online
sales and customer
satisfaction
Restructured
Executive Board and
strengthened senior
leadership team
Restructured GM
senior leadership
team
Increased
International Food
sales
Developed marketing
strategy to increase
online awareness
Improved supply
chain and delivered
new distribution
centre
Launched new
International websites
Launched M&S
Bank
Delivered new
multi-channel platform
key milestones
Group PBT objective (60% of total)
Group PBT targets were set by the Committee at the start of the year with reference to the Company’s own internal operating
plan, external forecasts for the retail sector and analysts’ profit forecasts. Targets were designed to be stretching in order to
increase motivation and focus and drive desired behaviours.
Following the conclusion of dialogue with the Financial Reporting Review Panel (FRRP), the Company changed the terms of the
Scottish Limited Partnership (SLP) as detailed on page 95 of the Annual Report. As a result of the revised operating plan, the
2012/13 Annual Bonus Scheme targets were recalibrated and the Committee agreed revised PBT targets.
The underlying Group PBT performance was £665.2m which was above the minimum target set by the Remuneration Committee.
As a result, the percentage of salary for the Group PBT objective was 33% for all executive directors.