RBS 2007 Annual Report Download - page 110

RBS Group • Annual Report and Accounts 2007
108
Directors’ remuneration report continued
Governance
Information regarding executive directors’ service contracts is summarised in the table and note below. (1)
Date of current contract/ Notice period – Notice period –
Name Employing company from company from executive
Sir Fred Goodwin 1 August 1998 12 months 6 months
The Royal Bank of Scotland plc
Mr Cameron 29 March 1998 12 months 6 months
The Royal Bank of Scotland plc
Mr Fisher 27 February 2007 12 months 12 months
The Royal Bank of Scotland plc
Mr Pell 20 February 2006 12 months 6 months
The Royal Bank of Scotland plc
Mr Whittaker 19 December 2005 12 months 12 months
The Royal Bank of Scotland plc
Note:
(1) With effect from 1 May 2008, Mr Fish will become a non-executive director of the company. In line with other non-executive directors, his appointment will be covered by a letter
of engagement. The appointment will be for an initial term expiring on 9 October 2009 and is terminable earlier by either party upon written notice.
0
20
60
40
Index 100
80
160
140
180
200
RBS
FTSE 100
FTSE banks
2002 20072006
Source: Datastream
200520042003
120
Total shareholder return performance
The undernoted performance graph illustrates the performance
of the company over the past five years in terms of total
shareholder return compared with that of the companies
comprising the FTSE 100 Index. This Index has been selected
because it represents a cross-section of leading UK
companies. The total shareholder return for FTSE banks for the
same period has been added for comparison. The total
shareholder return for the company and the indices have been
rebased to 100 for 2002.
Service contracts
The company’s policy in relation to the duration of contracts
with directors is that executive directors’ contracts generally
continue until termination by either party, subject to the required
notice, or until retirement. The notice period under the service
contracts of executive directors will not normally exceed 12
months. In relation to newly recruited executive directors,
subject to the prior approval of the Remuneration Committee,
the notice period from the employing company may be
extended beyond 12 months if there is a clear case for this.
Where a longer period of notice is initially approved on
appointment, it will normally be structured such that it will
automatically reduce to 12 months in due course.
All new service contracts for executive directors are subject to
approval by the Remuneration Committee. Those contracts
normally include standard clauses covering the performance
review process, the company’s normal disciplinary procedure,
and terms for dismissal in the event of failure to perform or in
situations involving actions in breach of the Group’s policies.
Any compensation payment made in connection with the
departure of an executive director will be subject to approval
by the Remuneration Committee, having regard to the terms of
the service contract and the reasons for termination.
Total shareholder return