Annual Report and Accounts 2012 - Speedy Hire plc

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42 Governance Remuneration report continued Remuneration policy and objectives The remuneration policy with respect to the Executive Directors has been designed to ensure that pay practices at the Company remain appropriate for both the Company and its shareholders. The principal objectives of the policy are to attract and retain the best talent to deliver the Company’s strategy and to drive shareholder value within a framework of good corporate governance and the Company’s risk profile. 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 designed to promote the long-term success of the Company 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, linked to corporate and individual performance, to provide both a focus on business performance and alignment with the interests of shareholders. The Committee acknowledges that the principle with respect to lower to median quartile salaries for Executive Directors has become more difficult to maintain given the reduction of the Company’s market capitalisation from previous levels. However, to counter-balance this effect, the Committee has limited Executive Director base salary increases since 2008 by not applying any annual increases from that date and only in FY2012 allowing a review in line with all other employees if Company performance met certain financial targets. 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 the Company 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. Speedy Hire Plc Annual Report and Accounts 2012 The Committee believes that it is incumbent upon it to ensure that the remuneration policy as it applies to the senior executives is effectively delivered in a manner that takes full account of the Company’s specific and developing circumstances. This continues to prove a challenge for the Committee against a backdrop of the continuing difficult economic climate. Additionally, in determining the remuneration arrangements of the Executive Directors, the Remuneration Committee takes into consideration not only the performance of the Executive Directors but also pay and employment conditions elsewhere in the Group, through regular interaction with the Company’s HR function and senior operational executives. As a result, the Remuneration Committee has determined that the remuneration of Executive Directors will provide an appropriate balance between fixed and performance-related pay elements. The chart below illustrates the average mix between the fixed (i.e. salary, benefits and pension) and variable (i.e. bonus, Performance Plan shares and Co-Investment Plan shares) elements of remuneration of the Executive Directors at an on-target and maximum performance. The Remuneration Committee will continue to review the remuneration policy to ensure it takes due account of best remuneration practice and is aligned with shareholders’ interests. Stretch Target 0% 20% 40% 60% 80% 100% Fixed pay Bonus Long-term incentives
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 Annual bonus > > Incentivise delivery of specific Group, divisional and personal annual goals > > Deferred share element aids retention and alignment with shareholders’ interests Long-term incentives > > Encourage long-term value creation > > Encourage co-investment > > Align executives’ interests with those of shareholders > > Retention Benefits > > Provide competitive benefits > > Retention Pension > > Provide competitive post-retirement benefits Share ownership guidelines > > Align the interests of Executive Directors with those of shareholders > > Cash > > Monthly > > Pensionable > > Annual payment (subject to performance) > > Cash up to 50% of salary, rest in shares > > Performance-related > > Non-pensionable > > Share-based > > Annual awards > > Shares may be released after three years > > Performance-related > > Non-pensionable Governance 43 > > Normally reviewed annually on or around 1 April and benchmarked against comparable companies > > The Company has limited Executive Director base salary increases since 2008 > > It is currently intended that base salary increases will be limited to employees earning base salaries less than £60,000. However, the Remuneration Committee may use its discretion to apply an increase to Executive Director base salaries no greater than that awarded to other employees should Company performance exceed certain financial targets during the year > > For FY2013 payments based on Group profit before tax, performance and personal KPIs > > Bonus potential of up to 100% of salary > > Any bonus above 50% of salary paid in shares linked to Co-Investment Plan Performance Plan > > 70% of salary maximum award for FY2013, vesting based on comparative TSR targets (with an underpin) Co-Investment Plan > > Matching shares, based on investment of bonus, up to 2:1 > > Vesting for awards to date based on real EPS growth > > No awards made in the past three years and there will be no award in 2012 > > Ongoing > > Car allowance, medical insurance and life assurance > > Ongoing > > Payable on retirement > > 10%-20% of basic salary depending on length of service > > Executive Directors have been offered cash in lieu of pension > > Ongoing > > Should build a shareholding of 100% of salary Speedy Hire Plc Annual Report and Accounts 2012 Governance
Page 1 and 2: Measured progress Annual Report and
Page 3 and 4: Measured progress Actions count. Re
Page 5 and 6: Measured progress Financial highlig
Page 7 and 8: Financial KPIs Revenue £m 600 500
Page 9 and 10: New build 2010 18.1% 25.7% New buil
Page 11 and 12: 1 3 2 4 Thames Water Speedy is a st
Page 13 and 14: Majors By 2013 the top 100 construc
Page 15 and 16: Products and services ePod Speedy p
Page 17 and 18: Costs Speedy has remained focused o
Page 19 and 20: 2 Actions Over 70% of our carbon fo
Page 21 and 22: We remain committed to our strategy
Page 23 and 24: The Group will maintain its focus o
Page 25 and 26: Risk description Potential impact S
Page 27 and 28: Our performance UK & Ireland Asset
Page 29 and 30: Our performance International Asset
Page 31 and 32: Exceptional items Exceptional items
Page 33 and 34: Ishbel Macpherson Non-Executive Cha
Page 35 and 36: Substantial shareholders As at 11 M
Page 37 and 38: Articles of association The Company
Page 39 and 40: Matters requiring Board or Committe
Page 41 and 42: Performance evaluation During the y
Page 43: Remuneration report This report has
Page 47 and 48: Benefits under the Performance Plan
Page 49 and 50: Emoluments of the Directors The emo
Page 51 and 52: 1 The interests at 1 April 2011 are
Page 53 and 54: Review of the work of the external
Page 55 and 56: Independent auditor’s report to t
Page 57 and 58: Financial statements 55 Consolidate
Page 59 and 60: Consolidated statement of changes i
Page 61 and 62: Notes to the financial statements F
Page 63 and 64: Financial statements 61 1 Accountin
Page 65 and 66: Financial statements 63 1 Accountin
Page 67 and 68: Financial statements 65 2 Segmental
Page 69 and 70: Financial statements 67 3 Exception
Page 71 and 72: 7 Financial expense Financial state
Page 73 and 74: 10 Dividends The aggregate amount o
Page 75 and 76: Financial statements 73 12 Intangib
Page 77 and 78: Financial statements 75 18 Financia
Page 79 and 80: Financial statements 77 18 Financia
Page 81 and 82: 20 Provisions Financial statements
Page 83 and 84: Financial statements 81 23 Share in
Page 85 and 86: Financial statements 83 27 Commitme
Page 87 and 88: Company statement of changes in equ
Page 89 and 90: Notes to the Company financial stat
Page 91 and 92: 36 Deferred tax Financial statement
Page 93 and 94: Shareholder information Annual Gene
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Awards 2012 NOEA - Event Innovation
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Memberships Professional body and t
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Printing and paper: this report has
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