Directors' Report: Governance - British American Tobacco

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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. 89 From the Chairman Performance and strategy Regional review Financial review Governance Group financial statements Parent Company financial statements Shareholder information
Appendices to the Remuneration report REMUNERATION REPORT CONTINUED Table 1: Aggregate emoluments – audited The emoluments of the Directors of British American Tobacco p.l.c. were as follows: 2009 2008 £ £ Salaries and fees 3,807,417 3,261,829 Benefits: cash and non-cash Performance-related pay 779,927 696,101 – cash bonus 1,572,915 1,816,952 – deferred share bonus 1,572,915 1,816,952 – DSBS and LTIP dividend equivalents 459,222 429,705 – Share Reward Scheme 8,100 4,919 Former Directors 747,543 1,944,240 Total 8,948,039 9,970,698 Table 2: Individual fees of the Chairman and Non-Executive Directors – audited Fees Benefits Total 2009 Total 2008 £ £ £ £ Jan du Plessis (until 31 October 2009) 511,667 73,252 584,919 686,141 Richard Burrows (from 1 September 2009) 1 175,000 3,317 178,317 – Karen de Segundo 110,000 8,082 118,082 104,984 Robert Lerwill 115,000 1,331 116,331 117,435 Ana Maria Llopis 90,000 – 90,000 75,000 Christine Morin-Postel 90,000 – 90,000 75,000 Gerry Murphy (from 13 March 2009) 72,000 958 72,958 – Anthony Ruys 110,000 – 110,000 108,096 Sir Nicholas Scheele Former Non-Executive Directors 115,000 811 115,811 112,110 Kenneth Clarke (until 30 April 2008) – – – 101,450 Thys Visser (until 30 April 2009) 30,000 – 30,000 86,018 Total 1,418,667 87,751 1,506,418 1,466,234 Notes: 1 Richard Burrows was appointed as a Non-Executive Director on 1 September 2009. He succeeded Jan du Plessis as Chairman on 1 November 2009. 2 The Chairman’s benefits comprise the use of a company driver and travel and other expenses incurred in connection with accompanied attendance at business functions. 3 Benefits for the Non-Executive Directors comprise those expenses incurred in connection with accompanied attendance at business functions. 4 In addition, Anthony Ruys received INR196,712 (£2,475) from ITC Limited, the Group’s Indian associated undertaking, in respect of his services as a Non-Executive Director of that company from 20 January 2009. This was supplemented by a further £68,621 paid by the Group for services up to and including 31 December 2009. 90 British American Tobacco Annual Report 2009 Directors’ report: Governance
Page 1 and 2: GOVERNANCE Board of Directors A sum
Page 3 and 4: 1. Richard Burrows (Irish) Chairman
Page 5 and 6: CONTENTS Chairman’s introduction
Page 7 and 8: meeting to address Jan du Plessis
Page 9 and 10: The Board and its Committees receiv
Page 11 and 12: Accountability and audit Audit Comm
Page 13 and 14: The Audit Committee has an establis
Page 15 and 16: Corporate social responsibility CSR
Page 17 and 18: Appointments to the Board Nominatio
Page 19 and 20: CONTENTS Introduction 78 Remunerati
Page 21 and 22: The Remuneration Committee reviewed
Page 23 and 24: For the Executive Directors and Man
Page 25 and 26: in each company’s index over the
Page 27 and 28: The Company also operates the Free
Page 29: Executive Directors’ external app
Page 33 and 34: REMUNERATION REPORT CONTINUED Table
Page 39 and 40: CONTENTS Companies Act 2006 98 Prin
Page 41 and 42: Articles of Association The followi
Page 43 and 44: 2) a Director to accept or continue
Page 45 and 46: The Disclosure and Transparency Rul
Page 47: 106 British American Tobacco Annual

Directors' Report: Governance - British American Tobacco

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