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Directors’ remuneration report continued the entire ‘shadow dividend’ re-invested in shares within an employee benefit trust. Performance conditions Performance conditions for the Performance Share Plan are as follows: 25% of the award vests if the Company achieves an average ROE of 10% post-tax for each of the three years; 100% vests if the average three-year return exceeds 17.5% post-tax; and vesting will occur on a straight-line basis between these points. The Remuneration and Nomination Committee believes that using ROE as the long-term performance condition better aligns the interests of employees with shareholders as ROE best captures the efficiency with which the Company is using shareholder funds to generate earnings. The Remuneration and Nomination Committee believes that an average ROE performance requirement over the three-year period smoothes out any cyclical fluctuations in earnings and ensures that over any given period shareholders will receive a minimum return on equity before awards granted to employees will vest. ROE has been calculated as profit after tax and goodwill amortisation divided by shareholders funds at the beginning of each year, excluding foreign currency items on economic hedges and intragroup borrowings. Save as You Earn The sharesave scheme and international sharesave scheme are offered to all employees and currently have a 60% participation. Shareholding guidelines We strongly believe that senior managers within Hiscox should be aligned with Hiscox shareholders by owning a reasonable number of Hiscox shares. Formal shareholding guidelines are in place which mean that within five years of becoming an Executive Director, Hiscox Partner (the top 5% of employees in the company) or a member of a subsidiary board, the employee will be expected to own Hiscox shares valued at 100% of salary for Hiscox Partners and members of subsidiary boards and 150% of salary for Executive Directors. The table at the end of the remuneration report details Directors’ interests in the long-term incentive plans. Executive Director reward Executive Directors’ reward packages are consistent with the rest of the business. The actual compensation paid to the four Executive Directors in 2009 is outlined in the table below. Details of their contractual notice periods is contained in the table opposite. RRS Hiscox BE Masojada RS Childs SJ Bridges 40 Directors’ remuneration report Hiscox Ltd Report and Accounts 2009 23% 18% 59% 51% 31% 18% 16% 58% 26% 20% 50% 30% Base Annual cash incentive Share incentive scheme ‘Base’ refers to base salary for the year. ‘Annual cash incentive’ is the annual amount allocated from the profit bonus pool. ‘Share incentive scheme’ is the estimated value at award of the Performance Share Plan awards made during the year.
Remuneration of Executive Directors Service contract table 2009 2009 2009 2009 2008 2008 2008 2008 Basic salary Benefits Bonus Total Basic salary Benefits Bonus Total £000 £000 £000 £000 £000 £000 £000 £000 RRS Hiscox 310 2 800 1,112 308 2 175 485 BE Masojada 436 2 1,250 1,688 428 2 200 630 RS Childs 356 73 1,250 1,679 348 221 200 769 SJ Bridges 326 2 800 1,128 318 2 175 495 External Non Executive Directorships No external appointments may be accepted by an Executive Director where such appointment may give rise to a conflict of interest. The consent of the Chairman is required in any event. During the year, RRS Hiscox has been a Non Executive Director of Grainger Trust plc and was paid £35,000 for his services and AGICM Ltd and was paid £10,000. During the year, RS Childs has been a Non Executive Director of HIM Capital Limited and HIM Capital Holdings Limited and did not receive any payment for his services. SJ Bridges and BE Masojada did not hold any Non Executive Director positions during the year. Effective date of Unexpired term Director Hiscox Ltd contract and notice period RRS Hiscox 12 Dec 2006 12 months BE Masojada 12 Dec 2006 6 months RS Childs 12 Dec 2006 6 months SJ Bridges 12 Dec 2006 6 months DM Healy 11 Oct 2006 3 months ER Jansen 20 Nov 2008 3 months Dr J King 11 Oct 2006 3 months Sir Mervyn Pedelty 11 Oct 2006 3 months AS Rosen 11 Oct 2006 3 months G Stockholm 20 Nov 2008 3 months DA Stuurop 11 Oct 2006 3 months Directors’ remuneration report Hiscox Ltd Report and Accounts 2009 41
Page 1 and 2: Hiscox Ltd Report and Accounts 2009
Page 3 and 4: Corporate highlights Group key perf
Page 5 and 6: Chairman’s statement It is an eno
Page 7 and 8: Chief Executive’s report In 2009
Page 9 and 10: Hiscox London Market Hiscox London
Page 11 and 12: We have also worked hard to develop
Page 13 and 14: We have continued to invest in trai
Page 15 and 16: Hiscox London Market Hiscox London
Page 17 and 18: Group financial performance Group f
Page 19 and 20: The expense ratio deteriorated by 7
Page 21 and 22: High quality and well diversified p
Page 23 and 24: Risk management The risk management
Page 25 and 26: Credit Reinsurance counterparties T
Page 27 and 28: Boxplot and whisker diagram of Hisc
Page 29 and 30: in essence a non-bureaucratic organ
Page 31 and 32: Cougar Syndicate 6104 Cougar Syndic
Page 33 and 34: Hiscox Insurance Company (Bermuda)
Page 35 and 36: Independent Non Executive Directors
Page 37 and 38: ecent and relevant financial experi
Page 39 and 40: Directors’ remuneration report Th
Page 41: Executive Directors’ cash incenti
Page 45 and 46: Share options Number of Number of M
Page 47 and 48: Directors’ report The Directors h
Page 49 and 50: Report of the independent registere
Page 51 and 52: Consolidated balance sheet At 31 De
Page 53 and 54: Consolidated statement of cash flow
Page 55 and 56: 2 Significant accounting policies c
Page 63 and 64: 3 Management of risk continued 3.1
Page 75 and 76: 4 Operating segments continued (a)
Page 77 and 78: 5 Net asset value per share 2009 20
Page 79 and 80: 12 Auditors’ remuneration continu
Page 81 and 82: 15 Intangible assets continued Othe
Page 83 and 84: 19 Reinsurance assets 2009 2008 Not
Page 85 and 86: 22 Derivative financial instruments
Page 87 and 88: 23 Fair value measurements continue
Page 89 and 90: 25 Share capital continued Share op
Page 91 and 92: 27 Insurance liabilities and reinsu
Page 93 and 94:
27 Insurance liabilities and reinsu
Page 95 and 96:
30 Deferred tax continued (b) Group
Page 97 and 98:
31 Employee retirement benefit obli
Page 99 and 100:
36 Contingencies and guarantees con
Page 101 and 102:
38 Principal subsidiary companies o
Page 103 and 104:
To request a copy of the 2009 Hisco
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