Marks and Spencer 2013 Annual Report Download - page 65

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Governance Marks and Spencer Group plc Annual report and financial statements 2013 63
Overview Strategic review Financial review Governance Financial statements and other information
Individual objectives (40% of total)
Each executive director had four individual objectives for
2012/13, each accounting for 10% of the total bonus.
‘Collective’ individual objectives (20% of total)
Two objectives were ‘collective’ i.e. individual targets set for
each director under shared objectives so that all directors
focused on common goals encouraging collaboration across
the senior management team. The Committee reviewed the
performance of each executive director against the quantifiable
performance targets that were set at the start of the year.
– Delivery against UK operating plan cost targets:
As set out on page 34 of the Annual Report, we managed
the businesses prudently in a challenging market.
Based on the Committee’s assessment of performance
against the individual targets under this objective, payouts to
executive directors were in the range 7.5% – 9% of
maximum bonus opportunity for this element of the bonus,
equating to 15% to 18% of salary.
– Delivery against Plan A commitments:
As detailed on page 32 of the Annual Report, we continued
our progress against our 2015 Plan A targets.
Based on the Committee’s assessment of performance
against the individual targets under this objective, payouts to
executive directors were in the range 4% – 9% of maximum
bonus opportunity for this element of the bonus, equating to
8% – 18% of salary.
Business area individual objectives (20% of total)
The remaining two objectives related to specific programmes
relevant to each executive director’s business area for which
they have primary responsibility.
Performance against these objectives was reviewed by the
Committee against quantifiable individual performance metrics
that were established for each director.
Based on the Committee’s assessment of performance against
these individual targets, payouts to executive directors were in
the range 8.5% – 13% of maximum bonus opportunity for this
element of the bonus, equating to 17% – 26% of salary.
Summary of bonus earned for 2012/13
The Committee believes that the level of bonus payout
appropriately reflects the significant progress made in 2012/13
towards the achievement of the Company’s long-term strategic
goals. The Committee, having carefully considered
performance during the year, further believes that the bonus
payments made are appropriate in the context of a challenging
year for the business and the wider retail sector.
The table below summarises the bonus payments for each
executive director for 2012/13:
Summary of bonus earned in 2012/131
Group PBT
Target
’Collective’
objectives
Business area
objectives Total bonus earned
% of salary % of salary £000
% of maximum
bonus potential
Maximum bonus potential 120% 40% 40% 200% – –
Actual bonus earned
Marc Bolland 33% 26% 26% 85% 829 42.5%
John Dixon 33% 34% 24% 91% 546 45.5%
Steve Rowe233% 34% 17% 84% 221 42.0%
Steven Sharp 33% 25% 19% 77% 531 38.5%
Alan Stewart 33% 28% 24% 85% 492 42.5%
Laura Wade-Gery 33% 26% 26% 85% 469 42.5%
1 Kate Bostock was not entitled to receive any bonus for 2012/13.
2 The bonus amount for Steve Rowe reflects his period of service as an executive director.
Performance Share Plan outcome for 2012/13
2010 Award Final Measurement
The underlying basic EPS figure for 2012/13 was 32.7p which was below the ‘threshold’ targets of RPI + 3% for awards of up to
200% of salary and RPI + 4% for awards of between 200% and 400% of salary. As a result, there was no vesting of awards made
in 2010 and these will lapse in full.
The targets for 2010 awards are shown in the table below:
2010 Awards
Award
Average annual EPS growth in excess of inflation (RPI)
EPS for start of scheme1
20% vesting 100% vesting
2010 (for awards up to 200% of salary) 3% 9% 30.0p
(for awards between 200% and 400% of salary) 4% 12% 30.0p
1 The EPS for the start of the 2010 scheme is based on the 52 week result, ensuring a like-for-like measure.