NATS-Annual-Report-2015

Annual Report and Accounts 2015 | NATS Holdings Limited
Governance 64
Reports from Board Committees
(continued)
Annual incentive schemes
An annual performance related pay scheme is in
place for executive directors and all staff in the Personal
Contract Group.
The annual performance related pay scheme opportunity
is set at a range of levels for Personal Contract Group staff
depending on role, responsibilities and accountabilities,
generally in the range from 15% to 55% of salary (70% for
the Chief Executive Officer (CEO)). For the group in general,
50% of the performance related pay scheme is determined
by company performance on key targets and the remaining
50% is dependent on individual performance against
targets and leadership behaviours.
For executive directors of the company and members of
the executive team, more weighting is given to company
performance: 75% with 25% dependent on personal
performance. The scheme incorporates an overarching
event clause whereby a reduced or zero payment will be
made if there has been an incident which is sufficiently
serious, in the view of the majority of the non-executive
Board members, to justify such action.
The Company Performance Related Pay (CPRP) scheme
is available to all employees (including fixed term
contractors) and is linked to the achievement of the
company’s annual EBITDA target in line with the annual
business plan. The scheme will pay out up to a maximum
of £1,027 per employee for 105% achievement of EBITDA
regardless of seniority, grade or salary level, payable in
July 2015 (subject to performance). The first cycle of the
scheme paid out £1,000 per employee in July 2014.
Annual performance related pay scheme
outcome for 2014/15
Targets relating to the company element of the
management performance related pay scheme for 2014/15
were almost fully achieved (yielding 73.8% out of an
available 75% of the award) and personal performance
ratings for the Board ranged between 6.3% and 25% (out of
an available 25%). However, the Remuneration Committee
considered that the technical failure on 12 December 2014
was sufficiently serious that the overarching event clause
should be invoked and therefore annual bonus payments
for the entire Executive team were reduced accordingly
by 25%.
Long term incentive scheme
A Long Term Incentive Plan (LTIP) is in place for executive
directors and members of the NATS executive team. The
LTIP is based on the achievement of a set of financial and
strategic targets for rolling three year periods. For cycle
4 this period commenced on 1 April 2014. The scheme
provides for a deferred performance related payment in the
event of achieving profitability, growth and strategic targets,
all subject to the overarching event clause and adjusted to
take account of traffic levels.
During 2015/16 the Committee has committed to a review
of the existing long term incentive practice and amongst
other things will consider whether there is sufficient long
term focus and that the measures adopted are aligned with
the business strategy.
Governance