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Directors’ Remuneration<br />
Dear Shareholder<br />
The <strong>Vodafone</strong> Remuneration Committee commissioned a review of <strong>the</strong> reward<br />
package for <strong>the</strong> executive directors during <strong>the</strong> 2008 financial year. The objective<br />
was to consider <strong>the</strong> effectiveness of <strong>the</strong> reward arrangements in aligning with<br />
our strategy and shareholder interests. As a result, <strong>the</strong> Remuneration Committee<br />
has updated <strong>the</strong> remuneration policy, reward structure and market positioning<br />
for <strong>the</strong> coming years.<br />
The key principles adopted for <strong>the</strong> updated <strong>Vodafone</strong> remuneration policy are<br />
as follows:<br />
•<br />
•<br />
•<br />
•<br />
ensure a competitive total remuneration package as benchmarked against<br />
relevant companies and markets;<br />
provide <strong>the</strong> opportunity for significant reward upside only if:<br />
– truly exceptional performance is delivered; and<br />
– participants invest <strong>the</strong>ir own money;<br />
deliver a high proportion of total remuneration through performance related<br />
equity payments; and<br />
drive alignment to our strategy, to create shareholder value, and reinforce<br />
shareholder alignment.<br />
In order to fulfil this policy, <strong>the</strong> following key changes are being made to <strong>the</strong><br />
components of directors’ remuneration:<br />
•<br />
•<br />
•<br />
<strong>the</strong> long term incentive structure is being simplified – awards will be made in<br />
performance shares only;<br />
<strong>the</strong> vesting of performance shares will be based upon a combination of<br />
operational and equity performance measures; and<br />
participants will be invited to invest <strong>the</strong>ir own money in order to maximise <strong>the</strong>ir<br />
long term award.<br />
The Remuneration Committee continues to monitor how well incentive awards<br />
made in previous years align with <strong>the</strong> Company’s performance. We are confident<br />
that forecast rewards are commensurate with performance. This financial year<br />
we have taken <strong>the</strong> opportunity to fur<strong>the</strong>r align <strong>the</strong> <strong>Vodafone</strong> reward package to<br />
<strong>the</strong> strategy and shareholder interests. In particular, this Remuneration Report<br />
outlines <strong>the</strong> detailed changes to <strong>the</strong> Global Long Term Incentive Plan (“GLTI”)<br />
for <strong>the</strong> 2009 financial year. This plan operates under <strong>the</strong> existing plan rules<br />
which were approved in 2006. As a result <strong>the</strong>re will be no separate resolution<br />
for <strong>the</strong> amendments. However, <strong>the</strong> Remuneration Committee always takes an<br />
active interest in shareholder views and <strong>the</strong> voting on <strong>the</strong> Remuneration Report.<br />
As such, it hopes to receive your support at <strong>the</strong> AGM on 29 July 2008.<br />
Luc Vandevelde<br />
Chairman of <strong>the</strong> Remuneration Committee<br />
27 May 2008<br />
Remuneration Committee<br />
The Remuneration Committee is comprised to exercise independent judgement<br />
and consists only of independent non-executive directors. The Remuneration<br />
Committee had five scheduled and a number of o<strong>the</strong>r ad hoc meetings during<br />
<strong>the</strong> year. For fur<strong>the</strong>r details, <strong>the</strong> terms of reference can be found on page 68.<br />
Remuneration Committee<br />
Chairman Luc Vandevelde<br />
Committee members Dr Michael Boskin (left on 23 July 2007)<br />
Simon Murray (joined on 25 July 2007)<br />
Professor Jürgen Schrempp<br />
Anthony Watson<br />
Philip Yea<br />
Management attendees<br />
Chief Executive Arun Sarin<br />
Group HR Director Terry Kramer<br />
Group Reward & Recognition Director Tristram Roberts<br />
External advisers<br />
During <strong>the</strong> year, Towers Perrin supplied market data and advice on market practice<br />
and governance. PricewaterhouseCoopers LLP and Kepler Associates provided<br />
performance analysis and advice on plan design and performance measures.<br />
The advisers also provided advice to <strong>the</strong> Company on general human resource<br />
and compensation related matters. In addition, PricewaterhouseCoopers LLP also<br />
provided a broad range of tax, share scheme and advisory services to <strong>the</strong> Group<br />
during 2008.<br />
Contents<br />
The detail of this Remuneration Report is set out over <strong>the</strong> following pages, as follows:<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
Review of <strong>the</strong> executive directors’ remuneration<br />
How <strong>the</strong> executive directors were paid in <strong>the</strong> 2008 financial year<br />
Changes to how <strong>the</strong> executive directors will be paid in <strong>the</strong> 2009 financial year<br />
Grants made and payouts received in <strong>the</strong> 2008 financial year<br />
O<strong>the</strong>r elements of directors’ packages<br />
Non-executive directors’ remuneration<br />
O<strong>the</strong>r considerations<br />
Audited information.<br />
<strong>Vodafone</strong> Group Plc Annual Report 2008 71