The way ahead? - Vodafone

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74 The remuneration package for the 2014 financial year The table below summarises the main components of the reward package for executive directors. Base salary Benefits Vodafone Group Plc Annual Report 2013 Directors’ remuneration (continued) Global Short-Term Incentive Plan (‘GSTIP’) Global Long-Term Incentive Plan (‘GLTI’) base awards and co-investment awards (further details can be found on page 76). Purpose and link to strategy Operation a To attract and retain the best talent. a To aid retention and remain competitive within the market place. a To drive behaviour and communicate the key priorities for the year. a To motivate employees and incentivise delivery of performance over the one-year operating cycle. a The three financial metrics are designed to both drive our growth strategies whilst also focusing on improving operating efficiencies. Measuring competitive performance with its heavy reliance on net promoter score means providing a great customer experience remains at the heart of what we do. a To motivate and incentivise delivery of sustained performance over the long-term. a To support and encourage greater shareholder alignment through a high level of personal financial commitment. a The use of free cash flow as the principal performance measure ensures we apply prudent cash management and rigorous capital discipline to our investment decisions, whilst the use of TSR along with the three year performance period and the subsequent holding of vested shares means that we are focused on ensuring these decisions are value enhancing for our shareholders. a Salaries are reviewed annually and fixed for 12 months commencing 1 July. Decision is influenced by: a level of skill, experience and scope of responsibilities of individual and business performance, economic climate and market conditions; a increases elsewhere within the Group; and a an external comparator group (which is used for reference purposes only) made up of companies of similar size and complexity to Vodafone, and is principally representative of the European top 25 companies and a few other select companies relevant to the sector. The comparator group excludes any financial services companies. a Executive directors may choose to participate in the defined contribution pension scheme or to receive a cash allowance in lieu of pension. a Company car or cash allowance. a Private medical insurance. a Chauffeur services, where appropriate, to assist with their role. a Bonus levels and the appropriateness of measures and weightings are reviewed annually to ensure they continue to support our strategy. a Performance over the financial year is measured against stretching financial and non-financial performance targets set at the start of the financial year. a The annual bonus is paid in cash in June each year for performance over the previous financial year. a Award levels and the framework for determining vesting are reviewed annually to ensure they continue to support our strategy. a Long-term incentive base awards consist of performance shares which are granted each year in June/July. a Individuals must co-invest Vodafone shares and hold them in trust for three years in order to receive the full target award. a Dividend equivalents are paid in cash after the vesting date. a All awards vest three years later based on Group operational and external performance.
Overview Opportunity Performance metrics Changes in year There are no proposed salary increases for any executive directors during the 2014 financial year compared to a salary increase budget in the UK of 1.75%. a Vittorio Colao £1,110,000 a Andy Halford £700,000 a Stephen Pusey £575,000 Business review Performance Governance Financials The cash payment or pension contribution is equal to 30% of annual gross salary. From 6 April 2011 contributions into the defined contribution pension scheme were restricted to £50,000 per annum. Any residual of the 30% pension benefit is delivered as a cash allowance. a £19,200 per annum. a £1,500 per annum a Bonuses can range from 0–200% of base salary, with 100% paid for on-target performance. Maximum is only paid out for exceptional performance. a The Chief Executive’s full award will have a target face value of 237.5% of base salary. The award for the other executive directors will have a target face value of 210% of base salary. a Minimum vesting is zero times and maximum vesting is three times the target award level. a To receive the full target award, executive directors must co-invest up to their annual gross salary. If they are unable to commit up to their annual gross salary, awards will be reduced accordingly, to a target base award of 137.5% (CEO) and 110% (other executive directors). a The awards that vest accrue cash dividend equivalents over the three year vesting period. a Awards vest to the extent performance conditions are satisfied over the three year period. Additional information None. No change during the year. None. No change during the year. a Service revenue (25%); a EBITDA (25%); a adjusted free cash flow (25%); and a competitive performance assessment (25%). This is an assessment encompassing both net promoter score and market share against the competitors in each of our markets. a Performance over three financial years is measured against stretching targets set at the beginning of the performance period. a Vesting is determined based on a matrix of two measures: a adjusted free cash flow as our operational performance measure; and a relative TSR against a peer group of companies as our external performance measure. 75 Vodafone Group Plc Annual Report 2013 Weighting changed for adjusted free cash flow (20% to 25%) and competitive performance assessment (30% to 25%) The peer group has been expanded to include AT&T.
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Vodafone Group Plc Annual Report fo
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The way ahead? - Vodafone

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