| Remuneration
Policy
Executive Director remuneration packages consist of various
components:
- Basic salary
- Company car
- Performance linked bonus
- Private healthcare insurance
- Pension contributions
- Share options
- Life assurance
- Permanent health insurance
A review of remuneration policy is set out below. In October
2000 the Committee commissioned a comparative review of Executive
Director remuneration, which was carried out by Arthur Andersen.
The recommendations of this review were taken fully into account
when remuneration packages for 2001 were agreed and were again
referred to in deliberations for 2002.
Scope and Objectives
Attracting, retaining and motivating directors and senior
management of appropriate calibre and experience is essential
to the Company's future success. The Remuneration Committee's
primar y objective is to ensure that remuneration policy supports
this objective whilst avoiding unnecessary cost.
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Remuneration
Committee Report
Membership
The Remuneration
Committee consists of the Company's three independent,
non-executive directors:
C. H. McLintock (Chairman)
H. A. Crichton-Miller
P. J. Folkman
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The Committee is responsible for determining the remuneration
packages of the Company's Executive Directors. In addition,
it has a broader remit which includes Executive Director performance,
career development and training requirements together with
stewardship of the Company's share option schemes.
Basic Salary Salaries are
set taking into account performance and appropriate comparatives
in the market place.
Performance Linked
Bonus Bonuses are based on one year performance criteria.
Executive Directors are able to earn a bonus of 35% of their
base salary on achievement of budget targets. A 10% bonus
is paid on achievement of 97% of budget. No bonus is payable
below that figure. The bonus can rise to 65% of salary, but
to reach this level would require exceptional achievement,
substantially outperforming budget targets.
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Pension
Contributions The Company operates contributory money
purchase pension schemes for the benefit of its executives and
most other employees. In all cases, basic salary only is pensionable.
Executives are able to increase pension contributions through
salary sacrifice and benefit from a portion of the savings in
National Insurance charges. Pension contributions on behalf
of Executive Directors are 15% of base salary, before any salary
sacrifice element.
Share Options The
Company believes that share options are an important element
in Executive Director remuneration packages. This is particularly
so where the executive in question holds only a limited number
of Holidaybreak plc shares. Current policy is to grant a moderate
level of options on a regular, annual basis. More information
on the Company's share option schemes is given opposite.
Service Agreements
The Committee regards the stipulated notice periods for its
Executive Directors to be of mutual benefit. The service agreement
for the Group Chief Executive currently provides for a two
year notice period. This is currently under review and agreement
in principle has been reached for the reduction of this notice
period to one year. No other agreements stipulate a notice
period of over one year.
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