Brambles 2006 Annual Report - Alle jaarverslagen

70
Brambles
2006 Annual Report DIRECTORS’ REPORT – REMUNERATION REPORT
The Non-executive Directors do not participate in
Brambles’ short or long term incentive plans, and do
not receive benefits in kind. With the exception of the
retirement benefit contracts of certain Directors outlined in
Section 6.3, the Non-executive Directors do not participate
in Brambles’ pension schemes.
Details of the Non-executive Directors’ dates of
appointment, letters of appointment and the year in which
they are next expected to be subject to re-election by
shareholders are shown in the Corporate Governance
Report on pages 44 to 53.
6.3 NON-EXECUTIVE DIRECTORS’ RETIREMENT
BENEFITS
Under Australian law and corporate practice, it is
permissible for public companies to pay retirement benefits
to non-executive directors, subject to certain financial
limits. In the UK, however, such payments are generally
not accepted practice.
Over several years before the DLC was formed, BIL
entered into retirement benefit contracts in Australia with
its Non-executive directors. Under these contracts, BIL
agreed on certain conditions to pay a retirement benefit to
those Non-executive directors, up to the maximum amount
allowed under Australian law – that is, an amount equal to
the total remuneration paid to the Non-executive director
for the three years before they retire. These amounts are
not transferable. Messrs Argus and Burrows are party to
such contracts. Mr McDonald, who retired during the Year,
was also party to such a contract.
After the formation of the DLC and in recognition of the
Corporate Governance requirements in the UK, a decision
was taken not to enter into any more retirement benefit
contracts with Brambles’ newly-appointed Non-executive
Directors, although the retirement benefits contracts
already in existence had to be honoured.
Because of the increase in fees payable to the
Non-executive Directors when the DLC was formed, the
basis on which the retirement benefits would be calculated
had to be clarified. The Board determined that the amount
of the retirement benefit would be calculated by reference
to the lower pre-DLC fees paid by BIL to the Non-executive
Directors concerned, rather than to the new increased fee
level. This was confirmed by amendments to the existing
retirement contracts in early 2002, with the agreement of
the relevant Non-executive Directors.
On the proposed unification of the DLC, BIL and BIP will
become wholly owned subsidiaries of Brambles Limited.
The Non-executive Directors of BIL and BIP will, at that
point, retire as Directors of BIL and BIP and, thereafter,
will be Directors solely of Brambles Limited as the publicly
listed entity in the Brambles Group. Under the terms of the
retirement benefit contracts, retirement from the Board of
BIL in these circumstances will entitle Messrs Argus
and Burrows to payment of their respective retirement
benefits. The amounts payable, assuming that Unification
is completed on 4 December 2006, are as follows:
D R Argus AO – A$892,829; M D I Burrows – A$616,374.
In the case of Mr Argus, the payment will be made to a
complying superannuation fund, in which Brambles has
no interest, which provides superannuation and retirement
benefits to Mr Argus.
6.4 NON-EXECUTIVE DIRECTORS’ REMUNERATION
FOR THE YEAR
Fees payable to the Non-executive Directors for their
directorships of both BIL and BIP are denominated in
sterling. As a consequence of the fees being converted
into each Non-executive Director’s local currency at the
foreign exchange rate applicable at the time of payment,
and those amounts being converted to US dollars for
reporting purposes, the amounts reported will fluctuate
from year to year.
Any contributions to personal superannuation or pension
funds on behalf of the Non-executive Directors are
deducted from their overall fee entitlement.
No compensation or termination or other non-cash
benefits were provided to the Non-executive Directors
for the Year, except to Mr McDonald, who retired on
11 November 2005.
The fees and other benefits provided to Non-executive
Directors during the Year, and during the prior year,
were as follows: (23)
US$’000
Name
D R Argus AO
R D Brown
M D I Burrows
H-O Henkel
Short term
employee
benefits
Post employment
benefits
Share-based
payment
Year
Directors’
fees
Superannuation
Change in
provision
for future
retirement
benefits (21) Other
Total before
equity
Options/
awards (22)
Total
2006 420 9 35 – 464 – 464
2005 413 9 35 – 457 – 457
2006 103 – – – 103 – 103
2005 101 – – – 101 – 101
2006 201 – 31 – 232 – 232
2005 201 – 30 – 231 – 231
2006 103 – – 13 116 – 116
2005 50 – – – 50 – 50