Download full Annual Report and Accounts - Kingfisher

Kingfi sher plc
Annual Report
and Accounts
2009/10
47
Under the PSP, the annual grant of provisional awards of Performance Shares to executive directors are made after the publication of the annual
results. Details of the awards granted during 2009/10 in respect of the prior year are set out on page 49. Details of awards made in respect of the
2009/10 year will be reported in the 2010/11 report. The awards will continue to be split between EPS and TSR, however EPS targets to 2013 have
been agreed as follows:
TSR performance target EPS performance target
Percentage of this Percentage of this
part of the award 50% EPS at part of the award
of performance the end of the of performance
50% TSR at the end of the Performance Period shares that will vest Performance Period shares that will vest
Less than median plus 1 percentage point Nil Less than 20p Nil
Median plus 1 percentage point 15.625% Between 20p and 23p Straight-line vesting
between 15.625% – 100%
Between median plus 1 percentage point Straight-line vesting
and upper quintile plus 1 percentage point between 15.625% and 100% 23p 100%
Upper quintile plus 1 percentage point 100%
Other long-term incentive plans
Apart from the Save As You Earn Option Scheme and those described above, all other option and incentive arrangements have been discontinued,
but awards made under these schemes in previous years will vest over time in accordance with the rules governing the various plans. The details are
shown in the section entitled Closed Incentive Plans on page 50.
Pension provision
Ian Cheshire is a member of the main defi ned benefi t funded arrangement, the Kingfi sher Pension Scheme, and subject to the scheme cap.
Following his appointment as Group Chief Executive, Ian Cheshire also receives a 30% Company contribution, on his salary above the pension cap,
into defi ned contribution arrangements. Kevin O’Byrne commenced after the defi ned benefi t section had closed to new members and thus is a
member of the defi ned contribution arrangements and receives a Company contribution of 20% of salary.
Share ownership guidelines
The Group Chief Executive and Group Finance Director are required to build a shareholding in the Company equivalent to 200% of base salary
and 100% of base salary respectively. Kevin O’Byrne has a fi ve-year period from the date of his appointment as Group Finance Director, on
1 October 2008, to accumulate his threshold shareholding, whilst Ian Cheshire has fi ve years from the date of his appointment as Group Chief Executive,
on 24 January 2008, to increase his shareholding in order to meet the new threshold shareholding equal to 200% of base salary. Shares which have
not yet vested under long term incentive plans are not taken into account in applying this test.
Under the Company’s formal share ownership guidelines, Ian Cheshire and Kevin O’Byrne are prohibited from selling shares obtained through
the KIS Share scheme and long-term incentive plans including the PSP (except to meet tax obligations) until they meet this minimum holding.
The Committee believes that this requirement will ensure that executives acquire a signifi cant personal interest in Kingfi sher shares, effectively
aligning executives’ and shareholders’ interests and encouraging a long-term view of performance.
As at 29 January 2010, based on that day’s closing price of 212.3p, Ian Cheshire’s shareholding of 410,792 shares represented 109% of his basic
salary of £800,000 (his holding of 375,177 shares at 1 February 2009 represented 99.6% of his basic salary of £800,000 using the 29 January 2010
share price). Kevin O’Byrne’s shareholding of 112,994 shares represented 41.7% of his basic salary of £575,000 (his holding of 112,994 shares at
1 February 2009 represented 41.7% of his basic salary of £575,000 using the 29 January 2010 share price).
Executive directors’ remuneration
The remuneration paid to the executive directors for the 2009/10 fi nancial year is set out in the table below:
Total remuneration 1
£000 Base salary Total benefi ts 2 Cash bonus 3,4 2009/10 2008/09
Ian Cheshire 800.0 239.1 1,073.7 2,112.8 1,636.9
Kevin O’Byrne 575.0 143.1 771.8 1,489.9 709.9 5,6
Total 1,375.0 382.2 1,845.5 3,602.7 2,346.8
1 The long-term incentive plan did not meet performance conditions in 2009/10 and did not vest. Accordingly, the long-term incentive plan does not fi gure in the table of executive
directors’ remuneration.
2 Total benefi ts include a contribution to defi ned contribution pension arrangements for both Ian Cheshire and Kevin O’Byrne. Non-cash benefi ts comprise medical and life
insurances and the provision of fi nancial advice. Ian Cheshire receives a company car and a cash payment as he has not taken the full entitlement of his allowance for his car.
Kevin O’Byrne receives a cash payment in lieu of a company car.
3 The contingent shares award under the KIS Share scheme in relation to the fi nancial year ended 30 January 2010 are set out in the table under KIS Share awards.
4 The annual base salaries of the executive directors as at 24 March 2010 are £816,000 for Ian Cheshire and £586,500 for Kevin O’Byrne. The bonus calculation for 2009/10
has been based on these salaries.
5 Kevin O’Byrne’s remuneration in 2008/09 refl ects his service from 1 October 2008 to 31 January 2009.
6 This fi gure has been restated from the £671,600 disclosed in last year’s report, to include the £38,333 employer contributions made to the defi ned contribution scheme.