Annual Report 2012 - Development Securities PLC

In addition, the Committee must be satisfied that there has been a sustained
improvement in the Company’s underlying financial performance over the
performance period (typically by considering the change in net asset value).
For awards from 2010, a risk underpin (as previously described) will also apply.
On 22nd March 2011, awards were made under the Performance Share Plan
to M H Marx of 130,862 shares in the Company, representing 75.0 per cent
of salary, and to C J Barwick, M S Weiner and G Prothero of 70,883 shares,
each representing 50.0 per cent of salary. In total, 624,508 shares were,
at the discretion of the Committee, awarded to 33 employees and the four
Executive Directors.
Following feedback from shareholders the Committee determined that for
the 2012 award a wider range of performance measures should be used.
The performance condition for the 2012 award will be as follows:
Proportion Threshold
of the vesting
Performance measure
Relative TSR against the constituents
of the FTSE Real Estate Investment
Trust Index and the FTSE Real Estate
award (%) (25%)
Investment Services Index 50% Median
RPI+3%
NAV per share growth 50% per annum
Maximum
vesting
(100%)
85th
Percentile
RPI+10%
per annum
Pro-rating vesting will apply between points. The underpins described above
will also apply.
The performance condition under the award made on 8th May 2009 has
now been assessed and the award did not vest.
Historical Total Shareholder Return Performance
120
100
80
60
40
20
0
Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12
120
100
80
60
40
20
Development Securities
FTSE Real Estate Investment Trust Index
Development Securities
FTSE Real Estate Investment Services Index
0
Dec 06 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12
Remuneration Report
The graphs demonstrate the Company’s TSR performance over five financial
periods as represented by share price growth plus reinvested dividends,
against both the FTSE Real Estate Investment Trust Index and the FTSE Real
Estate Investment Services Index. The FTSE All Share Real Estate Index
used in previous years has ceased to be published and, having reviewed the
constituents of the previous index, it is considered that the constituents of
these two indices are the most appropriate for comparison of the Company’s
business performance against that of its competitors. The Company is a
constituent of the FTSE Real Estate Investment Services Index, but a number
of constituents of the FTSE Real Estate Investment Trust Index are also
considered as within the Company’s peer group.
h) Option Scheme 1993
The Option Scheme 1993 is a share based bonus scheme approved by
shareholders in that year. It allows individuals to benefit from movements in
the price of the Company’s shares over the period between the third and
tenth year following grant. The Directors may at the date of grant limit the
aggregate notional bonus which may become payable.
No new grants have been made during the period and none are currently
outstanding.
i) Share option schemes
The Executive Share Option Scheme 1995 was approved by shareholders in
that year. This was replaced by the Executive Share Option Plan 2005 which
was approved by the shareholders at the 2005 Annual General Meeting on
12th May 2005. The options under both schemes were granted on the basis
that they may only be exercised if a performance condition is satisfied.
No share options were granted during the period.
The performance condition for those options outstanding is to measure the
average net asset growth of the Company over three consecutive financial
years against the growth in the Investment Property Databank Index (All
Property). The options will vest on a sliding scale with 50.0 per cent if average
net asset growth is at least equal to that of the Index, 100.0 per cent if in
excess of the Index by 4.0 per cent per annum and pro-rata vesting in
between. The performance condition will not be retested after the end of the
performance period. The performance condition is considered appropriate as
the Index measures against the Company’s added value.
It is the intention of the Committee that no further grants be made to
Executive Directors unless in exceptional circumstances, for example, a new
appointment or an acute retention requirement. Grants to senior managers
may continue in the future as appropriate.
Following the declaration of a 28.5 pence special dividend on 19th February
2003, the Committee resolved that option holders may receive, upon exercise
of those options then outstanding, a cash bonus equivalent to the special
dividend as equitable compensation.
j) Savings Related Option Scheme
The Save As You Earn Option Plan 2005 was approved by shareholders at
the 2005 Annual General Meeting. The fourth grant under the plan was made
on 24th October 2011 for a total of 193,205 options over shares at 152.0
pence per share to 45 employees, including M H Marx, G Prothero and M S
Weiner for options over 5,921 shares each. The Option Plan was open to all
employees who had been employed by the Group in excess of one month.
The options may be exercised after three years at a price not less than 80.0
per cent of the market value of the shares at the time of invitation.
Development Securities PLC / Annual Report 2012 61