Punch Taverns plc 2007 Annual Report and Financial Statements

Introduction
This report has been prepared in accordance with The Directors’ Remuneration Report Regulations 2002 (‘the Regulations’). The report
also meets the relevant requirements of the Listing Rules of the Financial Services Authority and describes how the Board
has complied with the provisions of the Combined Code (‘the Code’) relating to remuneration matters.
The report is divided into two parts. The first part contains the commentary of remuneration policy, which is not required to be audited.
The second part contains the remuneration tables that have been audited in accordance with the relevant statutory requirements.
Unaudited information
The Remuneration Committee
The Committee members are:
Fritz Ternofsky (Chairman)
Mike Foster
Peter Cawdron
They are all independent Non-executive Directors, or, in the case of Peter Cawdron, was independent on his appointment as Chairman
of Punch Taverns plc. The Committee members have no personal financial interest, other than as shareholders, in the matters to be
decided. There are no potential conflicts of interest arising from cross-directorships and no day-to-day involvement in running the
business. The Committee determines the remuneration packages of Executive Directors and any changes to their service contracts,
as well as the remuneration of other senior executives. The Committee also governs any annual bonus plans, long term incentives
and employee share plans. The Committee’s terms of reference are available on the Company’s website.
Advisers to the Committee
In respect of the 2006 review, the Committee received independent remuneration advice from Halliwell Consulting (Halliwell) and in
respect of the 2007 review, the Committee received independent remuneration advice from Hewitt Associates (Hewitt). These advisers
were appointed by the Committee and are accountable to it. Halliwell continue to provide administration services connected to the
Company’s Executive and all employee share plans and Hewitt provide consulting advice to the Company in respect of its Spirit pension
schemes and actuarial, investment and other advice to the trustee of the two Spirit pension schemes. The Committee does not believe
that the independence of its advisers are compromised by these appointments. The Committee also consulted with the Chief Executive, the
Company Secretary and the Group Director of Human Resources. However, no executive was permitted to participate in discussions
about their personal remuneration.
The Committee met five times during the course of the year.
Remuneration policy
The Committee’s reward policy is designed to drive business performance and maximise shareholder value. It is based on the
following principles:
that remuneration should be viewed holistically (Total Reward), taking account of all reward elements;
that Total Reward should be set at a market competitive level to retain and recruit people of the required talent and experience;
that the package should be structured to allow the majority of Total Reward to be dependent on performance;
that Total Reward liabilities and costs should be monitored and controlled; and
that Total Reward should support the creation of shareholder value.
Remuneration is benchmarked against two relevant comparator groups:
Comparator group 1 Comparator group 2
UK pub, restaurant and hotel sector companies
(examples provided below)
Enterprise Inns plc
Mitchells & Butlers plc
J D Wetherspoon plc
Whitbread plc
Greene King plc
Marstons plc
Restaurant Group plc
Luminar plc
Millennium &
Copthorne Hotels plc
UK companies of similar size and complexity
to Punch Taverns in other relevant sectors
Punch Taverns plc Annual Report and Financial Statements 2007 333