IMI plc annual report 2012

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ENGINEERINGADVANTAGERemuneration Report2. Executive Directors’ remuneration and terms of appointment (continued)2.6.2 Performance Share Plan (continued)2.6.2.1 EPS performance conditionEPS was chosen as an appropriate measure because it rewards absolute growth in underlying earnings and because theRemuneration Committee believed it worked well in combination with TSR which is a comparative measure. The performancecondition for one half of the 2012 PSP awards and the intended 2013 PSP awards will be based on the Company’s compoundannual earnings per share growth over a three year period. The Remuneration Committee sets the EPS targets in respect ofeach annual award at the level it considers appropriately stretching given the conditions in which the Company is operating.The vesting schedule for the awards subject to the EPS performance condition proposed to be granted in 2013, which is thesame for the 2012 awards, is as follows:Compound EPS growthVesting15% per annum 100%Between 6% and 15% per annum Pro-rata between 25% and 100%6% per annum 25%Less than 6% per annum 0%As for the 2012 awards, the EPS measure for intended 2013 PSP awards will be based on adjusted basic earnings per sharewhich includes adjustment for the elimination of the after-tax cost of restructuring, acquired intangible amortisation, financialinstruments, but including economic hedge contract gains and losses, and excluding any other items meeting the definitionof an exceptional item as defined in the Group Accounting Policies.2.6.2.2 Total Shareholder Return performance conditionTotal Shareholder Return (TSR) is well understood and accepted as a performance measure for long-term incentives andlinks rewards to shareholder value. IMI’s relative TSR performance at the end of the three year performance period ended31 December 2012 placed it at the top end of the upper quartile of the comparator group.225%200%175%150%125%100%75%50%25%0%-25%-50%TSR Performance2010 2011 2012Three year performance period ended 31 DecemberMedian to top 25% TSRCompany TSR56 Board reports
TSR is defined as the movement in the share price during the performance period on a local currency basis with adjustmentsto take into account changes in capital structure and dividends (which are assumed to be reinvested in shares on theex-dividend date). The vesting schedule for the element of awards subject to the TSR performance conditions is as follows:RankingUpper quartile (top 25%)or aboveBetween median and upperquartileVesting100%Median 25%Below median 0%* Country is shown as country of primary listing.Pro-rata between 25% and 100%To ensure that TSR reflects improvement in the underlying performance of the Company the Remuneration Committee mustbe satisfied that the financial performance of the Company over the performance period warrants the level of vesting ascalculated under the TSR condition. In the event that the Remuneration Committee is not satisfied in this respect on thevesting of a PSP award it has committed to disclose the factors that it reviewed and give a commentary on the exercise of itsoverriding discretion.The TSR comparator group as at 31 December 2012 is as follows:Name Country* Name Country*Amada Japan Manitowoc United StatesAtlas Copco 'A' Sweden Meggitt United KingdomBBA Aviation United Kingdom Metso FinlandBodycote International United Kingdom NSK JapanBorgwarner United States Parker-Hannifin United StatesCobham United Kingdom Pentair United StatesEaton United States Rotork United KingdomEmerson Electric United States Sandvik SwedenFanuc Japan SKF 'B' SwedenFlowserve United States SMC JapanGKN United Kingdom Spectris United KingdomHalma United Kingdom Spirax-Sarco United KingdomHeidelb.Druckmaschinen Germany Sulzer 'R' SwitzerlandHoneywell Intl. United States THK JapanIDEX United States Tyco International United StatesIllinois Tool Works United States Vesuvius + United KingdomIngersoll-Rand United States Weir Group United KingdomInvensys United Kingdom Yaskawa Electric JapanJohnson Matthey United Kingdom+Note: Cookson Group demerged in December 2012 to form two entities: Vesuvius and Alent. The flow control business thatis relevant to IMI is owned by Vesuvius and accordingly the Remuneration Committee has determined that Cookson Group will be removedfrom the listing at the point of demerger and Vesuvius will be added to the list for new awards.The 2013 comparator group will be the same as it was in 2012 subject to any delisting.BUSINESS OVERVIEW GROUP OPERATING REVIEW RESPONSIBLE BUSINESS BOARD REPORTSFINANCIAL STATEMENTSIMI plc Annual Report 201257
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ENGINEERINGADVANTAGEIMI plc annual
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IMI is a global engineering group f
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RetailDispense22%FluidControls78%Fa
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ENGINEERINGADVANTAGECOMPANY BALANCE
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IMI plcLakesideSolihull ParkwayBirm
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IMI plc annual report 2012

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