Cosalt plc Annual report & financial statements 2008

Governance
Remuneration report
Remuneration Committee report to the Members of Cosalt plc
The parts of this report which are subject to audit are indicated
with an asterisk.
Remuneration Committee
The Remuneration Committee consists of Mr Hobdey,
Mr Kelly and is chaired by Mr Powell. The Committee met
three times during the year with all Committee Members in
attendance. The Committee determines the remuneration of
Parent Board Directors and Senior Executives and makes
recommendations to the main Board in connection with the
various Share Option Schemes. In framing its remuneration
policy, the Committee has given full consideration to Section B
of the Combined Code and the report has been prepared in
accordance with the Directors’ Remuneration Regulations
2002. As required by these Regulations, a resolution to approve
the report will be proposed at the Annual General Meeting.
Remuneration policy
Basic policy
The remuneration policy is designed to attract, retain and
incentivise Senior Executives with the appropriate managerial
and professional expertise to realise the Group’s business
objectives.
Remuneration packages consist of fixed elements of basic
salary, pension entitlements and benefits in kind, typically
a car or car allowance and private health insurance, plus
performance related elements being an annual cash bonus
scheme linked to Group or individual business performance
and personal objectives and participation in the Performance
Share Plan.
The Remuneration Committee in setting basic salaries and
fees has used market data on remuneration levels in companies
which it considers to be comparable in the broad business
sectors in which the Group operates and by reference to market
capitalisation and annual turnover.
The remuneration of the Chairman is determined in his absence
by the Remuneration Committee after consultation with the
Chief Executive Officer and reflects the nature and extent of
his part-time responsibilities.
The fees of Non executive Directors are determined by the
Board with individual Non executive Directors abstaining
from voting.
Bonus payments and benefits do not form part of
pensionable salary.
Annual performance related bonus scheme
Performance payments are based upon a combination of profit
and working capital targets linked to base salaries. Targets are
agreed each year with the Remuneration Committee.
Share options
Two Executive Share Option Schemes and Long Term Incentive
Plans were set up in January 1997. The Committee had made
regular awards of options to Executive Directors and other
Senior Executives. The schemes expired in February 2007
and no further options will be issued under the schemes.
Performance criteria have been attached to all options granted
under these schemes. Options will not be exercisable until the
Company’s earnings per share have grown by 2% per annum
above the Retail Price Index, over a rolling three-year period.
A deferred bonus plan involving the issue of matching shares to
Executives was introduced in March 2006, but so far no awards
have been made under this Scheme.
A Performance Share Plan was introduced following approval
by Shareholders at the AGM in March 2007. It provides for
awards of either nil (or nominal) cost share options or restricted
shares. Two awards of restricted shares were made in the
previous year but both awards have now lapsed. Awards
of nil cost options were made during the year to Parent Board
Directors and Senior Executives. The remuneration committee
set a performance target in respect of these options over a
fixed 3 year period ending in October 2011 that the annual
adjusted EPS must increase by 5% plus RPI per annum for
25% of the award to vest and at 13% plus RPI per annum for
100% of the award to vest with a sliding scale operating in
between these two levels.
Cosalt plc Annual report & financial statements 2008
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