Savills plc 2012 Annual Report - (PDF) - Investor relations

Remuneration philosophyIt is essential for Savills continued development and growth that the Group provides remuneration which attracts, retains and motivatesindividuals of the highest quality. Consistent with this approach, the remuneration arrangements for the Executive Directors arestructured to provide a competitive mix of variable performance related (i.e. annual profit share and longer term incentives) and fixedremuneration (principally base salary).In determining the remuneration of the Executive Directors and GEB Members, the Committee takes into account the role andresponsibility of the individual, their performance and the arrangements applying across the wider employee group, alongsideconsideration of sector and broader market practice. The Committee is also able to consider corporate performance on environmental,social and governance issues.Our business Our governance Our resultsThe remuneration policy and its application to the Executive Directors is described in more detail in the following pages. The informationin this report has not been audited unless otherwise stated.Summary policyThe following chart and accompanying table on pages 48 and 49, provide a summary of the different elements of pay, their purpose andlinkage to our strategy, and the key features of each component.Fixed remunerationBase SalaryVariable remunerationNear term – Annual PerformanceRelated Profit ShareLong term – Performance Share Plan(‘PSP’)Pension – Defined contributionBenefits – Private medical insurance andcar/car allowanceDelivered in part incash immediately(subject toclawback)Delivered in partin the form ofshares, deferredfor three years(subject toclawback)Awards vest subject to satisfaction ofperformance conditions, currently TSR(50% of award) and EPS growth (50%of award)Remuneration sensitivity to performanceThe charts below show how the composition of the Executive Directors’ remuneration as a percentage of the total remunerationopportunity will vary at different levels of performance, reflecting the Group’s philosophy that staff should be motivated throughhighly incentive based and therefore variable remuneration.A high proportion of total reward will be awarded through near and long term performance related remuneration. This is demonstratedby the charts below which illustrate that at target performance over 80% of the remuneration of the Group Chief Executive and GroupChief Financial Officer is delivered in the form of variable pay, which rises to 90% and 89% respectively if maximum performanceis achieved.Group Chief ExecutiveGroup Chief Financial OfficerBelow thresholdBelow thresholdTarget100%Target100%19%Maximum81%18%Maximum82%10%90%Fixed (Base salary, pension and benefits)Variable (Performance related, profit share (cash and deferred shares) and PSP)11%89%Fixed pay comprises base salary, benefits and the cost of employer pension contributions, while variable pay comprises theannual profit share and long term incentive opportunity (in relation to the latter, the PSP, no movement in current share pricehas been assumed).Savills plc Report and Accounts 2012 47