Peachtree 2015 Annual Report Download - page 90

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Statement of implementation of remuneration policy in the following financial year
This section provides an overview of how the Commiee is proposing to implement our remuneration policy in 2016.
Base salary
An annual salary review was carried out by the Commiee inNovember 2015. Following that review, the Commiee approved
Salary 1 January 2016 Salary 1 January 2015 Salary at appointment
Stephen Kelly £790,000(0% increase) £790,000 (0% increase) £790,000 (joined 5 November 2014)
Steve Hare £509,200 (3% increase) £494,400 (3% increase) £480,000 (joined 3 January 2014)
Pension and benefits
As in FY15, the executive directors will receive a pension provision worth 25% of salary as a contribution to a defined contribution plan and / or as
a cash allowance. They will also receive a standard package of other benefits consistent with those received in FY15. In addition, the Company will
continue to cover the cost of Steve Hare’s traveland accommodation for days on which he worksin the Company’s London offices.
Annual bonus
Key features of the executive directors’ annual bonus plan for 2016 are as follows:
– The maximum annual bonus potential will remain unchanged at 125% of salary.
– One-third of any bonus earned will be deferred into shares for two years under The Sage Group Deferred Bonus Plan.
– Annual bonuses awarded in respect of performance in 2016 will be subject to potential withholding (malus) or recovery (clawback) if specified
“trigger events” occur within two years of the payment/ award of the annual bonus. “Trigger events” will comprise a material misstatement of the
audited results, error in calculation of the bonus payout, serious reputational damage or significant financial loss as a result of an individual’s
misconduct or gross misconduct which could have warranted an individual’s summary dismissal.
The annual bonus for 2016 for executive directors will be determined as detailed below:
As a percentage of maximum bonus opportunity
Measure CEO CFO
Recurring revenue growth180% 80%
Strategic goals 20% 20%
1 Payout is dependent upon the satisfaction of underpin conditions based on organic revenue growth, operating margin and subscription growth.
Targets are not disclosed because they are considered by the Board to be commercially sensitive. Many of our competitors are unlisted companies
and not required to disclose targets; our disclosure could provide our competitors with a considerable advantage. It is intended for retrospective
disclosure to be made aer a period of one year, and continue to be made on a rolling basis.
Performance Share Plan (PSP)
The Chief Executive Officer and Chief Financial Officer will be amongst the participants in the PSP award to be granted inMarch2016. Awards will be
over shares worth 250% of salaryat the date of grant.
Vesting of these awards will be subject to satisfaction of the following performance conditions measured over the three financial years to
30 September 2018.
Relative TSR performance condition
(50% of award)
TSR ranking
% of award
vesting
Below target Below median 0%
Target Median 10%
Stretch Upper quartile 40%
Exceptional Upper decile 50%
TSR performance comprises share price growth and dividends paid.
Sage’s TSR performance will be measured relative to the TSR of
the constituents of the FTSE 100, excluding financial services and
extracting companies.
Recurring revenue growth
performance condition (50% of award)
Recurring
revenue growth
(CAGR)
% of award
vesting*
Below target <8% p.a. 0%
Target 8% p.a. 10%
Stretch 10% p.a. 40%
Exceptional 12% p.a. 50%
Recurring revenue isrevenue earned from customers for the provision
of a good or service, where risks and rewards are transferred to the
customer over the term of a contract, with the customer being unable
to continue to benefit from the full functionality of the good or service
without on-going payments.
* For any of this portion of the PSP awards to vest, two “underpin” conditions also
both need to be met:
– Organic revenue growth of 6% p.a. (CAGR) needs to be achieved over the
performance period
– Group EPS growth of 8% p.a. (CAGR) needs to be achieved over the
performance period
Directors’ remuneration report continued
Directors’ annual remuneration report continued
The Sage Group plc | Annual Report & Accounts 2015
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