Measuring our performance
We have a wide range of measures and indicators by which the Board assesses performance. To ensure management’s focus is aligned with the interest of our shareholders, our KPIs are reflected in our management incentive schemes. Although our other business measures are not directly included in these incentives, we believe they improve the quality of our business and contribute to shareholder value, particularly over the long term.
We reduced our measures used in the assessment of our performance related bonus scheme from six to four in 2011, following shareholder consultation in late 2010 and in early 2011. While we continue to measure both ‘net revenue’ and ‘overheads and productivity savings’, we no longer include these as KPIs in that assessment.
Using just the four KPIs of ‘Group’s share of key subsidiary markets’, ‘Global Drive Brand volumes’, ‘adjusted profit from operations’ and ‘cash flow from operations’ provides a simplified, straightforward and transparent set of measures. These KPIs still allow the Company to assess the vitality, sustainability and performance of the business while providing clarity for both shareholders and scheme participants about the required areas of performance.