Annual report 2010 - Imperial Tobacco Group

This Report covers the following:1 the Remuneration Committee’s Objectives, Membershipand Main Activities in 2010;2 Directors’ Emoluments and Share Interests;3 Review of Imperial Tobacco Group’s RemunerationPolicy and Practice;4 Directors’ Service Arrangements;5 Remuneration Practices;6 Executive Directors’ Pensions; and7 Other Information.1 The Remuneration Committee’s Objectives,Membership and Main Activities in 2010The Remuneration Committee operates under clear writtenterms of reference, which can be found on our websitewww.imperial-tobacco.com. The Remuneration Committeeformally confirms that throughout the year it has compliedwith the governance rules and best practice provisionsrelating to remuneration as set out in section 1 of the Code.The Remuneration Committee’s key objectives are to:– ensure the Group’s remuneration arrangements align with ourvalues, support our corporate strategy, including our enhancedsales focus, and drive performance as measured by ourfinancial and non-financial key performance indicators (KPIs),see pages 22 to 24;– maintain a competitive remuneration package appropriate tothe business environment in the countries in which weoperate so we can continue to attract, develop, retain andmotivate a high quality pool of talented employees at all levels,whilst ensuring a clear link between reward and performance;– ensure the remuneration policy motivates employees at alllevels to enhance our performance without encouragingthem to take undue risks; and– align senior executives’ remuneration with the interests ofshareholders and other stakeholders, including customers andemployees, by balancing financial and non-financial elements.MembershipThe Remuneration Committee, which met four times duringthe year, comprises four independent Non-Executive Directors.The Committee members have no personal financial interest inthe matters discussed other than as shareholders. During theyear Mr I J G Napier (Company Chairman) and Mr J-D Comolli(Deputy Chairman) attended by invitation.To reinforce the independence of the Remuneration Committee,a standing item at each meeting allows the members of theCommittee to meet without the Company Chairman, anyExecutive Director or other manager being present.Advice and SupportThe Remuneration Committee is provided with the followinginternal and external advice and support:InternalDuring the year Mrs A J Cooper (Chief Executive from13 May 2010), Mr G Davis (Chief Executive to 12 May 2010)and Mr R Dyrbus (Finance Director) were invited to attendto answer questions. Mr M R Phillips (General Counsel &Company Secretary) also attended as secretary to theCommittee. They were all specifically excluded from anymatter concerning the details of their own remuneration orconditions of service.Mrs K A Turner (Group Human Resources Director), theGroup Compensation and Benefits Manager and the DeputyCompany Secretary also attended and provided internalsupport and advice on market and regulatory developmentsin remuneration practice and our employee share plans.ExternalTo assist the Remuneration Committee in setting theremuneration package for each Executive Directorand member of the Chief Executive’s Committee (from1 October 2010 the Operating Executive) advice is providedby remuneration consultants Hewitt New Bridge Street(part of Aon Hewitt), and Towers Watson, both of whom areengaged by the Remuneration Committee as required. Bothare signatories to the Code of Conduct for RemunerationAdvisers. Neither provides any services to the Group otherthan those explained below.79