including the statement of remuneration policy for the year ended 30 September 2009
The Board presents its Remuneration report, which has been prepared on the recommendation of the Remuneration Committee (‘the committee’) and in accordance with the requirements of the Companies Act 2006 (‘CA 2006’). Shareholders will be invited to approve the Report at the Annual General Meeting on 5 February 2010. The Report covers the following matters:
With the exception of the annual performance-related award, service agreement details, the first shareholder return graph below, disclosure of remuneration to other senior executives and external directorships, the information set out below represents the auditable disclosures referred to in the Independent auditors’ report as specified by the UK Listing Authority and under Regulation 11 of and Schedule 8 to the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008.
The Board sets the Company’s remuneration policy and the committee is responsible, within the authority delegated by the Board, for determining specific remuneration packages and the terms and conditions of employment for the members of the Executive Committee, which comprises the executive directors and other senior executives. The committee ensures that the members of the Executive Committee are provided with the appropriate incentives to enhance the Group’s performance and to reward them for their personal contribution to the success of the business. The committee reviews the remuneration arrangements for Group employees whose salaries exceed a specified level and administers the Company’s share incentive plans. The committee also determines the Chairman’s remuneration although the Board itself determines the level of fees paid to the non-executive directors. No directors are involved in deciding their own remuneration.
The committee also maintains an active dialogue with shareholder representatives and its full terms of reference are set out on the Company’s website at www.compass-group.com.
The committee consists entirely of independent non-executive directors (as defined in the Code). During the year the committee comprised the following non-executive directors:
Biographical details of the current members of the committee are set out in the Board of directors. The General Counsel and Company Secretary acts as the secretary to the committee. The committee met on four occasions during the year. Details of attendance are given in the Meetings attendance table.
Non-executive directors who are not members of the committee are entitled to receive the papers discussed at meetings and the minutes.
The committee has access to detailed external information and research on market data and trends from independent consultants. During the year PricewaterhouseCoopers LLP (who also provide expatriate assignment advice) was engaged by the committee to advise on the design of incentive arrangements and general human resource and compensation related matters. Alithos Limited provided information for the testing of the total shareholder return performance conditions for the Company’s Long-Term Incentive Plan (‘LTIP’).
The Chairman and the Group Chief Executive together with Jane Kingston, the Group Human Resources Director, and David Walker, Director of Group Reward, are normally invited to attend each committee meeting and provide advice and guidance to the committee (other than in respect of their own remuneration).
During the year the committee conducted its annual review of remuneration philosophy and reviewed the Company’s remuneration practice to ensure that the overall remuneration structure continues to promote the Company’s business strategy. The performance targets of all the Company’s share plans were reviewed, as was the headroom available in issued share capital before each grant was made. The committee also reconfirmed that no bonus matching awards or share option grants would be made to executive directors without seeking shareholder approval.
During the year, the committee formally reviewed the LTIP and Management Share Option Plan (‘MSOP’) which are due to end in July 2010 and February 2012 respectively. The Company proposes to replace the LTIP and MSOP and details of the principal terms and conditions of the replacement plans can be found in the Notice of Annual General Meeting. The structure, shape and quantum of any future awards under the proposed new rules will remain broadly similar to those under the existing rules. Any proposed amendments have been drafted to take account of current governance and shareholder guidelines.
Directors are not eligible to receive grants under the current MSOP and this principle will also apply to the proposed new plan.
Select the sections of the Annual Report 2009 you wish to include in your customised report.
