1 The above illustration of the Executive Directors’ percentage of fixed and variable remuneration for 2007 is based on a number of assumptions: (1) base salary represents annual salary; (2) pension represents the transfer value of net increase in pension in the UK Pension Fund as disclosed in Table 4; it does not include transfer values accruing in other Group pension funds; (3) benefits are core benefits such as car/car allowance, private medical and personal accident insurance; (4) bonus is the amount expected for delivery of ‘on target’ performance delivered in cash and deferred shares; and (5) LTIP represents the target annualised expected value of long term incentives expressed as a percentage of base salary.
2 Fixed remuneration comprises: salary, pension and benefits. Variable remuneration comprises: bonus (cash and deferred shares), and LTIP.
Status of Remuneration Report
This report has been prepared in accordance with Schedule 7A to the Companies Act 1985. The report also meets the relevant requirements of the Listing Rules of the UK Listing Authority and describes how the Board has applied the Principles of Good Governance relating to Directors’ remuneration as set out in the Combined Code on Corporate Governance referred to in the Corporate Governance Statement. As required by the Companies Act 1985, a resolution to approve the Directors’ Remuneration Report (the Report) will be proposed at the Annual General Meeting of the Company on 30 April 2008, at which the Financial Statements will be presented for approval. The vote will have advisory status, will be in respect of the remuneration policy and overall remuneration packages and will not be specific to individual levels of remuneration. The Companies Act 1985 requires the auditors to report to the Company’s shareholders on the ‘audited information’ within the Report and to state whether, in their opinion, those parts of the Report have been prepared in accordance with the Companies Act 1985. The Auditors’ Report is set out in Report of the Independent Auditors and those aspects of the Report which have been subject to audit have been clearly marked: Table 1, Table 3, Table 4 and Table 5.
On behalf of the Board
Chairman of the Remuneration Committee
27 February 2008