Annual Report and Accounts 2007/08

• Unaudited information
  • Remuneration committee
  • Remuneration policy statement
    • Directors' service contracts
    • Basic salary & benefits
    • Annual bonus scheme
    • External appointments
    • Share options & Long Term Incentive Schemes
    • All employee schemes
    • Discretionary schemes
    • Performance conditions
    • Share dilution & headroom
  • Performance graph
  • Service contracts
• Audited information

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Remuneration report

Remuneration policy statement

Our Remuneration Policy applies from 1 April 2008. We aim to base remuneration on both Company and individual performance, while at the same time being sufficiently competitive to ensure that we attract and retain the people we depend upon for success. We aim also to comply with developing best practice wherever possible. The Remuneration Committee reviews our policy annually in the light of market conditions, performance and developments in good corporate governance.

We take into account the levels of pay and benefits throughout the whole Group to achieve a cohesive approach. We aim for a progressive relationship between reward and responsibility with safeguards against anyone receiving unjustified windfall gains. Performance conditions are always carefully considered to achieve a fair balance between shareholder interest and the requirement for Executives to be motivated to achieve agreed targets.

In setting remuneration the principles we follow are:

• remuneration must be closely linked to the Company’s objectives of:
  • achieving agreed short term performance goals
  • continuing to increase shareholder value
  • creating a sustainable position in terms of strategic position, capability to address it and financial resources to support it
• remuneration is set at competitive levels
• performance measures and targets are challenging and robust and measured on a consistent basis
• performance measures are carefully chosen to balance shareholder interest with the requirement of Executives to have a ‘clear line of sight’ to any agreed target
• long term incentives are designed with external advice and in keeping with relevant best practice
• bonuses are always stretching, performance-dependent and can be earned at virtually every level in the Group
• remuneration will also, where appropriate, take account of performance in relation to environmental, social and governance matters
• bonuses and other incentives will not generally be pensionable
• financial incentives (other than salary) are not awarded to Non-Executive Directors (including the Chairman).

Pension benefits are an important element of remuneration packages. We have introduced a retirement policy which provides for requests to continue working beyond normal retirement age and also introduced the ability for all employees to take flexible retirement (the ability to retire from the pension scheme whilst continuing to work), irrespective of which pension scheme they are in.

During the course of 2007 we implemented a performance management scheme throughout the Group. One of the key objectives of that scheme was clarity of personal and business objectives which should improve business performance. Additionally we actively encourage personal development and regular dialogue between employees and their line managers, appropriate for a high performing organisation.