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REMUNERATION REPORTIntroductionThis report and the recommendations of the remuneration committeehave been approved without amendment by the board forsubmission to shareholders.Other than as is specifically indicated in this report, the committeeintends to apply the same policies to each component of executivedirector remuneration in the future as in the year under review.This report complies with the Directors’ Remuneration ReportRegulations 2002, and, except where noted below, the companyapplied throughout the reporting year the provisions of the 2003Combined Code relating to remuneration.Information not subject to auditComposition and terms of reference of the remunerationcommittee (the committee)During the financial year ended 31 March 2007, the membersof the committee were Mr Morland (Chairman), Lord Fellowes,Mr Manser and Mr Manzoni. Lord Renwick of Clifton, Mr Bible,Mr Santo Domingo and Mr Kahn joined meetings as observers andalso present were the Chief Executive, Mr Mackay, the CompanySecretary, Mr Davidson, and the Deputy Company Secretary,Mr Shapiro, other than when their own remuneration was discussed.The committee deals with the remuneration of the executive directorsand other members of the executive committee, as well as approvingall grants and awards under the company’s share incentive plans,in accordance with terms of reference approved by the board.Consideration is also given to the company’s groupwidecompensation and incentive policies to ensure alignment.AdvisersIn the course of its deliberations, the committee has considered theviews of the Chief Executive on the remuneration and performance ofthe members of the executive committee. The Company Secretary,the Human Resources Director and the Head of Compensationand Benefits have also provided information to the committee relatingto the co-ordination of global pay policies, expatriate and local payfor international deployments, and equity usage through shareincentive plans.Kepler Associates and Mercer Human Resource Consulting havebeen appointed by the committee to provide advice on marketinformation and other remuneration matters. Kepler Associates doesnot provide any other advice or services to the group. Mercer alsoprovides advice to the company on pensions and risk matters.Remuneration policiesThe overall policy of the committee has been to ensure that executivedirectors and senior managers are rewarded for their contribution tothe group’s operating and financial performance at levels which takeaccount of industry, market and country benchmarks. The basicobjective of the policy is that members of the executive committeeshould receive remuneration which is appropriate to their scale ofresponsibility and performance, and which will attract, motivate andretain individuals of the necessary calibre. The committee takesaccount of the need to be competitive in the different parts of theworld in which the company operates.The committee has implemented its policy of agreeing aremuneration package for each executive director comprising anannual base salary, an annual cash bonus plan, long-term incentivesthrough participation in share option and performance share plans,pension contributions, other security and health benefits, and benefitsin kind. The base salaries, pensions and other benefits provided areintended to establish a level of ‘fixed’ pay which is competitive withappropriate comparators. The variable pay elements provided byshort-term and long-term incentives form a significant proportion ofexecutive directors’ pay and are intended to provide the opportunityfor executives to earn superior total pay for superior company andindividual performance. The table and charts below show the ratiosof performance-related compensation to base salary and benefitsof the executive directors, and the relative value of the differentelements, including the target bonus and fair value of the long-termshare-based compensation awarded in the year under review. Theratios are in line with the committee’s policy on the balance betweenfixed and variable pay.In order to align the interests of the executive directors and executivecommittee members with the interests of shareholders, shareincentives are considered to be critical elements of executiveremuneration policy. The committee considers that all elementsof the package are of importance in supporting the group’sremuneration policy.Target remuneration levels for the executive directors are set withreference to a group of 30 FTSE companies being ranked in the 15places either side of SABMiller plc in terms of market capitalisation.The committee continued to have regard to pay levels and practicesin the company’s principal international competitors and incompanies in the USA and South Africa comparable to its divisionsin those countries.Salary £ Retirement £ Benefits £ Bonus £ LTI £ Total £ % Fixed Variable %EAG Mackay 950,000 285,000 120,032 1,450,000 2,373,984 5,179,016 26.2 73.8MI Wyman 575,000 172,500 152,227 565,000 1,445,034 2,909,761 30.9 69.1Performance related compensation (%)EAG MackayMI WymanSalary 18.3%Pension 5.5%Bonus 28.0%LTI 45.9%Benefits 2.3%Salary 19.8%Pension 5.9%Bonus 19.4%LTI 49.7%Benefits 5.2%48SABMiller plc Annual Report 2007 Remuneration report