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Remuneration

Remuneration Policy and Objectives

The remuneration policy with respect to the Executive Directors has been designed to ensure that pay practices at Speedy remain appropriate for both the Group and its shareholders.

The principal objective of the policy is to attract and retain the best talent to deliver Speedy's strategy and to drive shareholder value within a framework of good corporate governance.

The key principles of this policy are:

  • between lower quartile and median salaries, but with the potential to earn upper quartile rewards for sustained exceptional performance provided stretching and demanding performance conditions are met;
  • a reward structure that balances short-term and long-term performance; and
  • competitive incentive arrangements that are underpinned by a balance of financial and operational performance metrics to provide both a focus on business performance and alignment with the interests of shareholders.

There is no restriction on the Committee which prevents it from taking into account performance on environmental, social and governance issues. The Committee notes with approval the continued effort being made by Speedy in motivating responsible behaviour in relation to these issues by encouraging reduced energy consumption and providing incentives to choose more efficient Company vehicles. In addition, the Committee seeks to ensure that the Company's pay policies do not encourage inappropriate operational risk-taking.

Components of Remuneration

The main components of the remuneration packages of the Executive Directors consist of the following elements:

Purpose Delivery Detailed policy
Basic salary
  • Reflect the value of the individual and his or her role, skills, experience
    and performance
  • Cash
  • Monthly
  • Pensionable
  • Normally reviewed annually on or around 1 April and benchmarked against comparable companies
  • No increases were made in April 2009 or April 2010
  • Executives have been given the opportunity to earn increases in base salary for 2011/12 if certain targets are met, see below.
Annual bonus
  • Incentivise delivery of specific Group, divisional and personal annual goals
  • Deferred share element aids retention and alignment with shareholders
  • Annual payment (subject to performance)
  • Cash up to 50% of salary, rest in shares
  • Performance-related
  • Non-pensionable
  • For 2011/12 payments based on Group profit before tax performance and project-based KPIs
  • Bonus potential of up to 100% of salary
  • Any bonus above 50% of salary paid in shares linked to Co-Investment Plan
Long-term incentives
  • Encourage long-term value creation
  • Encourage co-investment
  • Align executives' interests with those of shareholders
  • Retention
  • Share-based
  • Annual awards
  • Shares may be released after three years
  • Performance-related
  • Non-pensionable

Performance Plan

  • 70% of salary maximum for 2011/12, vesting based on comparative TSR targets (with an underpin)

Co-Investment Plan

  • Matching shares, based on investment of bonus, up to 2:1
  • Vesting based on real EPS growth
  • No awards were made in the past three years and there will be no award in 2011
Benefits
  • To provide competitive benefits
  • Retention
  • Ongoing
  • Car allowance, medical insurance and life assurance
Pension
  • To provide competitive post-retirement benefits
  • Ongoing
  • Payable on retirement
  • 10%-20% of basic salary depending on length of service
  • Executive Directors have been offered cash in lieu of pension
Share ownership guidelines
  • To align the interests of Executive Directors with shareholders
  • Ongoing
  • Must build a shareholding of 100% of salary