Directors' Report: Governance - British American Tobacco

www.bat.com/annualreport2009
policy that Non-Executive Directors do not receive additional fees for
attendance at Board Committee meetings. It is expected that all Non-
Executive Directors will sit on the Remuneration and the Nominations
Committees and will either be a member of the Audit Committee or
the Corporate Social Responsibility Committee.
Non-Executive Directors’ fees (including those of the Chairman) are
determined within the overall aggregate annual limit of £2,500,000
authorised by shareholders with reference to the Company’s Articles
of Association. The Board as a whole considers the policy and structure
for the Non-Executive Directors’ fees on the recommendation of the
Chairman and the Chief Executive. The Non-Executive Directors do
not participate in discussions on their specific levels of remuneration.
Non-Executive Directors receive no other pay or benefits (with the
exception of reimbursement of expenses incurred in respect of their
duties as Directors of the Company). It is the policy of the Board that
the spouses of the Executive Directors and Non-Executive Directors
may accompany the Directors for business purposes on designated
trips and functions during the year.
Anthony Ruys is a non-executive director of ITC Limited (ITC) (an
associated undertaking of the Company). During the year ended
31 December 2009, Anthony Ruys received INR196,712 (£2,475)
in fees from ITC. This amount is the subject of an annual supplement
from the Group so that he receives a total annual fee for this
appointment of £75,000.
Chairman’s terms of appointment and remuneration
The Remuneration Committee is responsible for determining the terms
of engagement and fees payable to the Chairman. This process takes
into account the breadth of that role coupled with its associated levels
of commitment and expertise.
Jan du Plessis resigned as a Director and as Chairman of the Company
on 31 October 2009. His terms of appointment provided that he held
the office of Chairman with effect from 1 July 2007 for a period of
three years unless terminated earlier by: (1) the Company giving three
months’ notice or a discretionary compensation payment in lieu of
notice; or (2) by the Chairman giving one month’s written notice with
the Company having discretion to make a compensation payment in
lieu of such notice. Any such compensation payment would have been
limited to any fees which were payable for such part of the relevant
notice period as the Board did not require the Chairman to perform
his duties. Jan du Plessis did not receive any compensation payment
upon his departure from the Company.
Directors’ report: Governance
British American Tobacco Annual Report 2009
The terms of Jan du Plessis’ appointment provided for: (1) an annual
fee of £620,000 (from 1 April 2009); (2) the use of a driver; and
(3) private medical insurance and personal accident insurance benefits.
He did not participate in the British American Tobacco share schemes,
bonus schemes or incentive plans and was not a member of any Group
pension plan.
Richard Burrows was appointed as a Director and Chairman Designate
of the Company with effect from 1 September 2009 and as Chairman
of the Company from 1 November 2009. The terms of his appointment
provide that he holds the appointment for an initial term of two years
unless terminated earlier by: (1) the Company giving three months’
notice or a discretionary compensation payment in lieu of notice; or
(2) by him giving one month’s written notice; with the Company
having discretion to make a compensation payment in lieu of such
notice. The compensation payment is limited to any fees which are
payable for such part of the relevant notice period as the Board does
not require him as Chairman to perform his duties.
As a Director of the Company, the Chairman is subject to the
reappointment of Directors provisions contained in the Company’s
Articles of Association. A resolution for Richard Burrows’ reappointment
as a Director will be put to the Annual General Meeting to be held on
28 April 2010.
The terms of Richard Burrows’ appointment provide for: (1) an annual
fee of £525,000; (2) the use of a driver; (3) private medical insurance
and personal accident insurance benefits; (4) the reimbursement by the
Company of the cost of return airline tickets to London from Ireland
in connection with his duties as Chairman; and (5) the provision by
the Company of temporary accommodation in London for a maximum
period of six months from the date of his appointment to the Board. In
common with the Non-Executive Directors, Richard Burrows does not
participate in the British American Tobacco share schemes, bonus schemes
or incentive plans and is not a member of any Group pension plan.
The Remuneration Committee has concluded that, as his fees had been
benchmarked immediately prior to his appointment, the next review
of Richard Burrows’ fees would not take place until February 2011.
Copies of service contracts and terms of appointment
Copies of the Executive Directors’ service contracts and the details
of the terms of appointment of each Non-Executive Director and the
Chairman are available for inspection during normal business hours at
the Company’s registered office and will also be available for inspection
at the Annual General Meeting on 28 April 2010.
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