Annual report and financial statements 2011 - Analist.nl

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54 Governance Remuneration report continued What has the Committee done during the year? continued Other items: – review of and agreement to all executive director and senior manager joining and leaving arrangements, covering all elements of their reward package. In particular, the Committee approved the joining arrangements for Alan Stewart (Chief Finance Officer) and Laura Wade-Gery (Executive Director, Multi-channel E-commerce) as well as the leaving arrangements for Sir Stuart Rose and Ian Dyson; – selection and appointment of new external advisors to the Committee; – review of the current senior remuneration strategy and incentive arrangements and the design and development of a new remuneration package for all executives for 2011/12, as described in the introduction to this report; and – review of pension arrangements for executive directors and senior managers in response to changes to tax relief. What is the action plan for 2011/12? As a result of a full review of the Committee’s performance and effectiveness, the following actions points have been agreed for next year: – review Committee composition; – review learning / training and induction of Committee members and ensure appropriate and timely updates on market developments; and – continue focus on shareholder engagement following implementation of the new senior remuneration framework. Senior remuneration framework How is the senior remuneration framework aligned to Company strategy? As highlighted in the introduction to this Remuneration report, the Committee has undertaken a thorough and comprehensive review of the senior remuneration framework to ensure that is aligned to the Company strategy. The Company must be able to attract and retain leaders who are focused and encouraged to deliver the evolving business priorities within a framework that continues to be aligned with the interests of the Company’s shareholders, for example through bonus deferral and shareholding requirements. In addition, the Committee has ensured that the incentive plans are effective in not only delivering the required financial results, but are integrally aligned to the current business strategy; in driving behaviours that uphold the Company’s high ethical standards; and adequately take account of risk. When completing the strategic review of the remuneration framework, the Committee considered that the existing incentive framework was fundamentally fit for purpose but that it required key changes to the performance measures, together with a rebalance to provide greater emphasis on medium to long-term performance. In setting the remuneration for directors, the Committee has the discretion to take into account performance on environmental, social and governance matters. Having reviewed the performance targets for 2011/12, the Committee has decided that these should continue to be an integral part of strategic individual objectives. All executive directors and senior managers have individual objectives aligned not only to the business strategy and operating plan but also to Plan A. What are the key elements of remuneration for executive directors? The key elements of remuneration are: – base salary and benefits; – Annual Bonus Scheme with compulsory deferred shares; and – Performance Share Plan (PSP), the Company’s long-term incentive plan. The Committee considers these components in total to ensure there is the right balance between reward for short-term success and long-term growth. Marks and Spencer Group plc Annual report and financial statements 2011
55 Chairman’s introduction For executive directors, based on the proposed senior remuneration framework, this can be summarised as follows: Fixed remuneration Policy for 2011/12 Delivery in 2011/12 Base salary Benefits Variable remuneration Annual Bonus Scheme: with compulsory deferral into shares Performance Share Plan Reviewed against: – salary levels in comparably-sized companies and major retailers e.g. FTSE 25–75; – economic climate, market conditions and Company performance; – the level of salary awards in the rest of the business; and – the role and responsibility of the individual director – provided on a market competitive basis – aligned to total reward structure for all employees – affordability – monthly in cash – reviewed annually with any increases normally awarded from 1 January – Group Pension Scheme: This comprises both a defined benefit and a defined contribution section (depending on date of engagement). Executive directors who are not part of the scheme receive a salary supplement in lieu of pension – life assurance cover where the executive director is not a member of the Group Pension Scheme – car or car cash allowance plus driver – all-employee share schemes (Save As You Earn) – employee product discount – drive profitability and strategic change across – bonus potential of up to 200% of salary for the whole organisation ‘maximum’ performance – stretching targets required to achieve – 60% of bonus based on PBT targets ‘maximum’ payment – 40% of bonus based on strategic individual – PBT, with an individual performance element objectives linked to delivery of key strategic objectives – compulsory deferral of 50% of bonus earned – aligned to shareholder interests through annual into shares financial performance as well as delivery of the – deferred shares vest after three years, subject overall business strategy to continued employment – primary long-term incentive – annual awards – link individual reward with long-term – plan provides for an individual award limit of performance of the Company 300% of salary, although the Committee’s – aligned to shareholder interests and specifically intention is that awards will conventionally be with the Company’s stated strategic objectives. referenced to 250% of salary – targets based on cumulative adjusted – awards may vest after three years based on (underlying basic) earnings per share (EPS), achievement of performance targets Return On Capital Employed (ROCE) and Revenue growth across UK, International and Multi-channel business segments Our strategy Our performance & marketplace Operating review Financial review Governance Financial statements & other information To find out more visit marksandspencer.com/annualreport2011 Directors’ report
Page 1 and 2:
Annual report and financial stateme
Page 3 and 4:
What’s in this report? P04 Read a
Page 5 and 6: How we’re governed Group Board Th
Page 7 and 8: 05 Overview Investment in our UK bu
Page 9 and 10: 07 Overview Total investment in our
Page 11 and 12: 09 Overview Do Your Thing In April
Page 13 and 14: 11 Overview Underlying Group profit
Page 15 and 16: 13 Overview Consumer confidence ind
Page 17 and 18: Our campaigns highlight how we adap
Page 19 and 20: Lingerie and Beauty Value lingerie
Page 21 and 22: Fun fashion Our Autograph striped s
Page 23 and 24: We are never complacent and we cont
Page 25 and 26: Terribly Clever In September we lau
Page 27 and 28: Try it - then buy it In November we
Page 29 and 30: 27 Overview Myleene’s Makeovers
Page 31 and 32: Made to measure Shoppers in our Sky
Page 33 and 34: 31 Overview Autograph Leaves collec
Page 35 and 36: 33 Overview Keeping up to date We
Page 37 and 38: 35 Overview Summary of results Grou
Page 39 and 40: 37 Overview Capital expenditure Yea
Page 41 and 42: 39 Overview Progress has begun on s
Page 43 and 44: 41 Overview What is our approach to
Page 45 and 46: 43 Overview Ensuring the Board is r
Page 47 and 48: Accountability 45 Overview We belie
Page 49 and 50: 47 Overview Risk description Mitiga
Page 51 and 52: Governance report Our Pensions 49 O
Page 53 and 54: Audit Committee 51 Overview Chairma
Page 55: 53 Chairman’s introduction PART 1
Page 59 and 60: 57 Chairman’s introduction Deputy
Page 61 and 62: 59 Chairman’s introduction Execut
Page 63 and 64: 61 Chairman’s introduction Contra
Page 65 and 66: 63 Chairman’s introduction PART 2
Page 67 and 68: 65 Chairman’s introduction Share
Page 69 and 70: 67 Chairman’s introduction Direct
Page 71 and 72: 69 Overview A special resolution wi
Page 73 and 74: 71 Overview treatment regardless of
Page 75 and 76: Independent auditors’ report to t
Page 77 and 78: 75 Consolidated statement of financ
Page 79 and 80: 77 Consolidated cash flow informati
Page 81 and 82: 79 1 Accounting policies continued
Page 83 and 84: 81 1 Accounting policies continued
Page 85 and 86: 83 3 Expense analysis Underlying £
Page 87 and 88: 85 7 Income tax expense A. Tax char
Page 89 and 90: 87 10 Employees A. Aggregate remune
Page 91 and 92: 89 11 Retirement benefits continued
Page 93 and 94: 91 12 Marks & Spencer UK Pension Sc
Page 95 and 96: 93 14 Intangible assets Goodwill £
Page 97 and 98: 95 16 Investment property Cost At s
Page 99 and 100: 97 22 Borrowings and other financia
Page 101 and 102: 99 23 Financial instruments continu
Page 103 and 104: 101 23 Financial instruments contin
Page 105 and 106: 103 25 Deferred tax Deferred tax is
Page 107 and 108:
105 29 Analysis of net debt A. Reco
Page 109 and 110:
107 Company statement of financial
Page 111 and 112:
109 C5 Investments continued B. Pri
Page 113 and 114:
Shareholder information 111 Overvie
Page 115 and 116:
Index A Page Accountability 45 Acco
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Annual report and financial statements 2011 - Analist.nl

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