How is share price performance factored into the Directors’ remuneration?
It is factored in through the long-term incentive plan and also through awarding part of the annual bonuses in the form of deferred shares which vest after three years. However, it is not considered best practice to make share price performance a major incentive. This could encourage Directors to make decisions that bolster the share price in the short-term rather than decisions that benefi t the Company and its shareholders in the long term. However, all Executive Directors must, within five years of joining the Board, own shares with a value of at least 1.5 x basic salary – and for the Group Chief Executive 2.0 x basic salary – to ensure their interests are aligned with those of shareholders.
