RBS 2009 Annual Report Download - page 237

235RBS Group Annual Report and Accounts 2009
Governance
Restricted Share Award
End of the
Market Market Value of Awards period for
Awards held Awards price on Awards price on awards held at qualifying
at 1 January granted in award vested in vesting vested 31 December conditions to
2009 2009 £ 2009 £ £ 2009 be fulfilled
Stephen Hester 7,997,055 (1) 0.48 1,502,291 0.285 428,153 5,506,987 21.11.08 – 29.05.11
608,805 0.4015 244,435
378,972 0.463 175,464
1,832,062 (2) 0.48 610,688 0.375 229,008 1,221,374 21.11.09 – 21.11.11
9,829,117 3,100,756 1,077,060 6,728,361
Guy Whittaker (3) 90,718 5.41 90,718 0.285 25,854 — 01.02.09
44,500 5.41 — lapsed
135,218 90,718 25,854 —
Philip Hampton (4) — 5,172,413 0.29 5,172,413 27.02.12
Notes:
(1) Awards to replace bonus and share awards Stephen Hester forfeited on leaving The British Land Company PLC, which reflect the vesting dates of the original awards. Initially he was awarded
10,407,081 restricted shares on joining the Group and 577,964 vested during 2008.
(2) These awards vest as to 1/3 on each of the first, second and third anniversary of award, subject to their terms.
(3) Awards were granted to Guy Whittaker in lieu of unvested share awards from his previous employer. He ceased to be a director on 30 September 2009 and the outstanding award lapsed following
cessation of employment.
(4) Details of the restricted share award to Philip Hampton are outlined on page 228. The Remuneration Committee can amend this award as it considers appropriate. However, shareholder approval
will be required to amend certain provisions to Philip Hampton’s advantage. These provisions relate to the basis for determining his entitlement to, and the terms of shares or other benefits and for
the adjustment thereof (if any) if there is a capitalisation issue, rights issue or open offer, sub-division or consolidation of shares or reduction of capital or any other variation of capital and the
amendment power itself. The Remuneration Committee may, without shareholder approval, make minor amendments to facilitate the administration of the award, to comply with or take account of
any proposed or existing legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for Philip Hampton or his employer. The benefit of the award is not pensionable.
Performance criteria for ESOP and MPP awards granted to
executive directors in 2009
Awards are subject to relative and absolute TSR measures, both
weighted equally. The performance measures apply to both ESOP and
MPP awards made in 2009.
The relative TSR measure compares the Group’s performance against a
basket of banks from the UK and overseas, weighted towards those
companies most similar to the Group
Comparator companies Weighting
1. Lloyds Banking Group 200%
2. Barclays
3. Banco Santander 150%
4. HSBC
5. Standard Chartered
6. Citigroup 100%
7. Deutsche Bank
8. J. P. Morgan Chase
9. BNP Paribas 50%
10. Bank of America
11. Societe Generale
12. Credit Agricole
13. Credit Suisse Group
14. Royal Bank of Canada
15. Wells Fargo
16. National Australia Bank
17. BBVA
18. UBS
19. The Toronto Dominion Bank
20. Unicredito Italiano
To receive any of the shares and options subject to this performance
measure, the Group’s performance must be at least as good as the
median of the comparator companies, with vesting as follows:
•To receive 100% of the shares and options, RBS would need to be in
the top quartile of its relative TSR group.
•To receive 25% of the shares and options, RBS would need to be at
the median of its relative TSR group.
The absolute TSR measure is based on the achievement of share price
targets by the end of the performance period. In respect of this
performance measure, vesting is determined as follows:
•To receive 100% of the shares and options the share price would
need to reach 70 pence or more.
•To receive 50% of the shares and options the share price would need
to reach 55 pence or more.
•To receive 25% of the shares and options the share price would need
to reach 40 pence.
In addition, if the Group’s Remuneration Committee consider that the
vesting outcome calibrated in line with the performance conditions
outlined above does not reflect the Group’s underlying financial results
or if the Committee considers that the financial results have been
achieved with excessive risk, then the terms of the awards allow for an
underpin to be used to reduce vesting of an award, or to allow the
award to lapse in its entirety.