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The
Remuneration Committee has decided that there
should be no increase in base pay for executive directors
in 2004. For the achievement of target, performance-related
remuneration will be approximately 67% of total remuneration
(excluding pension) for the Chief Executive and 54%
for the other executive directors.
Under
his current service agreement the Chairman is not entitled
to be paid a bonus, or to participate in the Equity
Incentive Portfolio.
Performance
targets for the 2004 financial year are significantly
more challenging than the outturn of the 2003 financial
year. To increase the proportion of performance-related
remuneration, the maximum bonus level will increase
to 100% of salary for truly exceptional performance
for six executives only. The on-target and maximum bonus
levels for the Chief Executive are unchanged. The threshold
level, below which a bonus payment will not be paid,
has been set at a higher level than the results achieved
in the 2003 financial year. The proportion of the bonus
linked to corporate performance has been increased from
60% to 75% for the lines of business chief executives.
For all other relevant executives, bonuses are based
solely on corporate performance.
The
Committee has decided that in 2004 and subsequent years
the value of the Chief Executive’s DBP awards will
be in line with other executives at 50% of his gross
annual bonus.
The
value of options granted in the 2004 financial year
will not exceed three times salary. Grants will be subject
to the same TSR performance conditions as described
above, except that the number of re-tests will be reduced
to one only, in year five.
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