Notes to the financial statements - Plasmon

Remuneration report
This report has been prepared in accordance with the provisions of
Schedule B of the Combined Code and only the details of Directors’
emoluments, pension entitlements and share options have been
subject to audit.
The Remuneration Committee (“the Committee”) is composed entirely
of the non-executive Directors identified on page 17. On
19 September 2002, Christopher McFadden was appointed Chairman
of the Committee, replacing John Barrie Morgans who remains a
member of the Committee. In determining its remuneration policy,
service contracts and compensation for Directors, full consideration
has been given to the provisions of the Combined Code.
The Committee meets as required during the year and its terms of
reference are to determine the Company’s policy on executive
remuneration and to consider and approve the individual terms and
conditions of employment for the executive Directors. The Committee
takes advice where appropriate from the Chief Executive of the
Company on matters other than his personal remuneration. No
external advice was sought during the year ended 31 March 2003.
Remuneration policy
Basis of the remuneration policy
In forming the remuneration policy and the remuneration packages of
the executive Directors, the Committee balances the requirement to
align the interest of the Directors with those of the shareholders, with
the creation of a culture of linking reward to the Company’s
performance and with the need to recruit and retain management of
the highest calibre.
The executive Directors’ remuneration consists of four components –
basic salary, performance-related bonus, share options and pension
provisions. The performance related components comprising the
annual bonus and share option schemes are designed to incentivise
the executive Directors to perform at the highest level, and to align
executive rewards with enhanced shareholder value in both the short
and long-term.
Basic salary is reviewed annually by the Committee after a review of
the individual executive Director’s performance and the overall
performance of the business. Where appropriate, the Committee has
regard to published remuneration information and to specific advice
from independent remuneration consultants. Inflation is also taken into
consideration.
The Committee determines a bonus for each executive Director based
on criteria agreed with that executive Director at the beginning of the
financial year. These criteria include the achievement of budgeted
profits and earnings per share. Bonuses are uncapped. The
Committee also awards one-off bonuses for any major activities, such
as acquisitions, not taken into consideration in the budget.
Plasmon Plc
Annual Report 2003
Remuneration report
20
Performance chart
The chart below compares the growth in value of £100 invested in
ordinary shares in Plasmon Plc on 1 April 1998 with the performance
of a similar investment in the shares of the constituents of the FTSE
Small Cap index. The Directors are of the view that this constitutes a
relevant broad equity market.
600
500
400
300
200
100
0
April
1998
April
1999
April
2000
April
2001
Plasmon Plc Ordinary Shares FTSE Small Cap Index
April
2002
April
2003
Pension provisions
The executive Directors receive pension contributions equal to 15 per
cent of basic salary which are paid into their personal money purchase
pension plans. Details of the schemes are given in Note 26.
Service contracts
The executive Directors are employed under the terms of service
agreements dated 19 July 1996 which may be terminated by
12 months’ notice from either party. None of the Directors’ service
contracts provides for predetermined amounts of compensation in the
event of early termination.
Policy on outside appointments
It is the policy of the Committee that executive Directors should not
take more than one outside appointment, which it is believed can
provide valuable experience. Nigel Street is a non-executive Director of
Streason Limited, the holding company of his family’s business
interest.
Non executive fees
The Board determines remuneration of the non-executive Directors.
The Company has a contract with MAHE-Morgans Limited, dated
1 July 1997, which provides the services of John Barrie Morgans as a
non-executive Director and which can be terminated by 6 months’
notice from either party. Henri Zinsli and Christopher McFadden have
contracts with the Company, dated 1 April 1999 and 19 July 2001,
respectively, terminable by three months’ notice from either party.