united-utilities-annual-report-2015

UNITED UTILITIES GROUP PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015Stock Code: UU.unitedutilities.comPolicy table for directors continuedLong Term Plan (LTP)Purpose and link to strategy: To incentivise long-term value creation and alignment with longer term returns toshareholders.OperationAwards under the Long Term Plan are rights to receivecompany shares, subject to certain performanceconditions.Each award is measured over a three-year performanceperiod starting at the beginning of the financial year inwhich awards are granted.An additional two-year holding period applies after theend of the three-year performance period.Vested shares accrue dividend equivalents.Shares under the LTP are subject to malus in suchnegative circumstances as the committee considersare appropriate. For example: material misstatementof audited financial results, serious failure of riskmanagement or serious reputational damage.Non-executive directors’ fees and benefitsRead more on Long Term Plan on pages 95 to 98Maximum opportunity130 per cent of salary per annum.In exceptional circumstances the committee retains thediscretion to grant awards up to plan limits of 200 per cent ofsalary.Performance measuresOne-third of awards vest based on relative total shareholderreturn (TSR), one-third based on customer service excellenceand one–third based on a sustainable dividends performancecondition.Any vesting is also subject to the committee being satisfiedthat the company’s performance on these measures isconsistent with underlying business performance.100 per cent of awards vest for stretch performance,25 per cent of an award vests for threshold performance andno awards vest for below threshold performance.Purpose and link to strategy: To attract non-executive directors with a broad range of experience and skills to oversee thedevelopment and implementation of our strategy.OperationThe remuneration policy for the non-executive directors(with the exception of the Chairman) is set by a separatecommittee of the board. The policy for the Chairman isdetermined by the remuneration committee (of whichthe Chairman is not a member).Fees are reviewed annually taking into account the levelsof fees paid by companies of a similar size and complexity.Any changes are effective from 1 September.Additional fees are paid to the chairs of certain boardsub-committees and for the senior independent nonexecutivedirector.No eligibility for bonuses, long-term incentive plans,pension schemes, healthcare arrangements or employeeshare schemes.The company repays any reasonable expenses that a nonexecutivedirector incurs in carrying out their duties as adirector. In addition, travel, hospitality-related and othermodest benefits will be payable on occasion.Read more on Non-executive directors’ fees and benefits on page 101Maximum opportunityCurrent fee levels are shown in the annual report onremuneration.The value of benefits may vary from year to year according tothe cost to the company.Performance measuresNon-executive directors are not eligible to participate in anyperformance-related arrangements.SHAREHOLDER INFORMATION FINANCIAL STATEMENTS GOVERNANCESTRATEGIC REPORT89