Tesco 2008 Annual Report Download - page 33

Tesco PLC Annual Report and
Financial Statements 2008 31
Non-executive Directors
Non-executive Directors have letters of appointment setting out their duties
and the time commitment expected. The letters are available to shareholders
to view from the Company Secretary upon request. The Chairman meets
with each Non-executive Director separately to review individual performance.
All Non-executive Directors are subject to re-election by shareholders every
three years at the Annual General Meeting and their appointment can
be terminated by either party without notice. Mr Allen and Dr Einsmann,
each having served over nine years, will going forward submit themselves
for re-election every year subject to the Chairman having reviewed their
performance and concluded that they continue to add value.
The remuneration of the Non-executive Directors is determined by the
Chairman and the Executive Committee after considering external market
research and individual contribution. Non-executive Directors receive a
basic fee of £55,000 per annum. The Chairs of the Audit and Remuneration
Committees receive £30,000 (in addition to their basic non-executive fee)
and Non-executive Directors who are members of these Committees receive
£12,000 for each Committee. The Senior Independent Non-executive
Director, Mr R F Chase, who is also the Deputy Chairman, receives a fee
of £118,000 per annum.
The Remuneration Committee determines the Chairman’s remuneration,
having regard to time commitment and packages awarded to Chairmen
of other companies of a similar size and complexity. Mr D E Reid,
Non-executive Chairman, received an annual fee of £585,000 this year
and has the benefit of a company car and chauffeur.
Compliance
In carrying out its duties, the Committee gives full consideration to best
practice. The Committee was constituted and operated throughout the
period in accordance with the principles outlined in the Listing Rules
of the Financial Services Authority derived from Schedule A and B of the
Combined Code Principles of Corporate Governance and Code of Best
Practice. The auditors’ report, set out on page 41, covers the disclosures
referred to in this report that are specified for audit by the Financial Services
Authority. This report also complies with disclosures required by the Director
Remuneration Report Regulations 2002. Details of Directors’ emoluments
and interests, including Executive and savings-related share options, are set
out on pages 31 to 38.
Charles Allen
Chairman of the Remuneration Committee
Tables 1-11 are audited information.
Table 1 Directors’ emoluments
Fixed emoluments Performance-related emoluments
Share Short-term
Incentive Short-term deferred To t a l Tot a l
Salary Allowances Benefits3Plan cash shares Long-term42007/8 2006/7
£000 £000 £000 £000 £000 £000 £000 £000 £000
Executive Directors
Mr R Brasher 721 – 87 3 679 626 – 2,116 2,004
Mr P A Clarke 738 – 64 3 679 626 639 2,749 2,631
Mr A T Higginson 738 – 94 3 679 626 670 2,810 2,661
Sir Terry Leahy 1,293 – 95 3 1,189 1,690 1,202 5,472 4,618
Mr T J R Mason1738 260 117 3 1,018 991 670 3,797 3,765
Mr T J R Mason1200–––270263–733 –
Mr T J R Mason – total 938 260 117 3 1,288 1,254 670 4,530 3,765
Miss LNeville-Rolfe2485 – 106 3 446 411 – 1,451 239
Mr D T Potts 738 – 33 3 679 626 639 2,718 2,574
Non-executive Directors
MrC LAllen 85––––––85 69
Mr R F Chase 118––––––118 109
Mrs KCook 67––––––67 62
Mr E M Davies 79––––––79 70
Dr H Einsmann 67––––––67 62
MrKJ Hydon 85––––––85 69
Ms C McCall 67––––––67 62
Mr D E Reid (Chairman) 581 – 94––––675 612
Total 6,800 260 690 21 5,639 5,859 3,820 23,089 19,607
1 Mr Mason’s salary consists of a base salary and a non-pensionable salary supplement (shown separately) in respect of certain localisation costs including accommodation and school fees. Allowances
are made up of compensation payments for additional tax due on equity awards made prior to Mr Mason’s move to the US. Mr Mason’s benefits are made up of car, travel, medical and tax-related
costs and services.
2 Miss Neville-Rolfe was appointed on 14 December 2006. The 2006/7 figure in Table 1 is calculated from the date of her appointment.
3 With the exception of Mr Mason, benefits are made up of car benefits, chauffeurs, disability and health insurance, staff discount and gym/leisure club membership.
4 The Long-term bonus figures shown in Table 1 relate to the additional 12.5% enhancements allocated in May 2007 on short-term and long-term awards under the old bonus scheme. The long-term
bonuses awarded on 14 November 2007 under the Performance Share Plan were awarded in the form of nil cost options with the exception of Mr Mason who received an unfunded promise to
deliver shares. Details of these awards are shown in Table 6.