RBS 2006 Annual Report Download - page 119
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Please find page 119 of the 2006 RBS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.RBS Group • Annual Report and Accounts 2006
118
Directors’ remuneration report continued
Governance
Chairman and non-executive directors
The original date of appointment as a director of the company and the latest date for the next re-election are as follows:
Latest date for
Date first appointed next re-election
Sir Tom McKillop 1 September 2005 2009
Mr Buchan 1 June 2002 2009
Dr Currie 28 November 2001 2008
Mr Friedrich 1 March 2006 2009
Mr Hunter 1 September 2004 2008
Mr Koch 29 September 2004 2008
Mrs Kong 1 January 2006 2009
Mr MacHale 1 September 2004 2008
Sir Steve Robson 25 July 2001 2008
Mr Scott 31 January 2001 2009
Mr Sutherland 31 January 2001 2009
Except as noted below, in the event of severance of contract
where any contractual notice period is not worked, the
employing company may pay a sum to the executive in lieu of
this period of notice. Any such payment would, at maximum,
comprise base salary and a cash value in respect of fixed
benefits (including pension plan contributions). In the event of
situations involving breach of the employing company’s
policies resulting in dismissal, reduced or no payments may be
made to the executive. Depending on the circumstances of the
termination of employment, the executive may be entitled, or
the Remuneration Committee may exercise its discretion to
allow, the executive to exercise outstanding awards under long-
term incentive arrangements subject to the rules of the
relevant plan. All UK based directors, with the exception of
Guy Whittaker, are members of The Royal Bank of Scotland
Group Pension Fund (‘the RBS Fund’) and are contractually
entitled to receive all pension benefits in accordance with its
terms. The RBS Fund rules allow all members who retire early
at the request of their employer to receive a pension based on
accrued service with no discount applied for early retirement.
The Remuneration Committee has reviewed this provision of
the RBS Fund, which applies equally to executive directors and
other employees. The Remuneration Committee concluded that
a change to the terms of the RBS Fund in respect of early
retirement at the company’s request would not be a cost
effective route to take at this time. The RBS Fund is closed to
employees, including any executive directors, joining the
Group after 30 September 2006.
The exception to these severance arrangements relates only to
Mr Fish. If Mr Fish’s contract is terminated without cause, or if
he terminates the contract for good reason (as defined in the
contract), he is entitled to a lump sum payment to compensate
him for the loss of 12 months salary plus annual bonus.
Mr Fish would also be entitled to receive for this period health,
life insurance and long term disability coverage and any
other benefits determined in accordance with the plans,
policies and practices of Citizens at the time of termination.
The Remuneration Committee has been advised that these
termination provisions are less generous than the current
market practice in the US.
The non-executive directors do not have service contracts or
notice periods although they have letters of engagement
reflecting their responsibilities and commitments. Under the
company’s articles of association, all directors must retire by
rotation and seek re-election by shareholders at least every
three years. The dates in the table above reflect the latest date
for re-election. However, in 2007, at least one-third of the Board
will retire by rotation as required by the company’s articles of
association. No compensation would be paid to the Chairman
or to any non-executive director in the event of early
termination.