RBS 2010 Annual Report Download - page 262

Deferred awards
In 2009, the Group changed its approach to paying bonuses. Annual awards are now deferred over three years and a portion of the awards will be paid
in shares. For executive directors, the entire award is delivered in the form of shares. These steps help to ensure that the interests of those receiving
awards are aligned with those of our shareholders. Below are details of deferred awards granted to executive directors during the year ended 31
December 2010. Awards are structured as conditional rights to receive shares and are subject to clawback.
Awards held at
1 January 2010
Awards
granted
in 2010
Market
price on
award
£
Awards
vested in
2010
Market price
on vesting
£
Awards held at
31 December 2010
End of period
for qualifying
conditions to
be fulfilled
Bruce Van Saun — 957,071 0.38 957,071 18.06.12
Stephen Hester agreed to waive his Deferred Awards in 2010.
Share options
The Executive Share Option Plan (ESOP) was approved by shareholders in April 2007. No further awards will be made under the ESOP.
Options exercised in 2010
Options held at
31 December 2010
Options held at
1January 2010 Number
Market price
at date o
f
exercise
£
Options
lapsed in
2010
Option
price
£Numbe
r
Exercise period
Stephen Hester 9,550,000 0.37 9,550,000 22.06.12 - 21.06.19
Gordon Pell (1) 104,252 4.80 104,252 14.08.04 - 13.08.11
98,879 5.07 98,879 14.03.05 - 13.03.12
178,412 3.45 178,412 13.03.06 - 12.03.13
169,158 4.84 169,158 11.03.07 - 10.03.14
181,304 4.83 181,304 10.03.08 - 09.03.15
310,364 310,364 4.70 — lapsed (2)
640,871 640,871 2.97 — lapsed (2)
1,683,240 951,235 732,005
Bruce Van Saun 905,306 0.57 905,306 08.09.12 - 07.09.19
Notes:
(1) Options held at 31 March 2010 when Gordon Pell ceased to be a director.
(2) This award was subject to performance conditions which were not achieved.
No options had their terms and conditions varied during the year ended
31 December 2010. No payment is required on the award of an option.
The plan was amended in 2009 to introduce a clawback provision for
grants made in 2009. In respect of the grant of options in 2009, the
performance conditions for executive directors are based on a
combination of relative and absolute Total Shareholder Return (TSR)
measures.
The market price of the company's ordinary shares at 31 December 2010
was 39.07p and the range during the year ended 31 December 2010 was
31.25p to 58.05p.
In the ten year period to 31 December 2010, awards made that could
require new issue shares under the company's share plans represented
4.1% of the company's issued ordinary share capital (including the B
share capital), leaving an available dilution headroom of 5.9%. The
company meets its employee share plan obligations through a
combination of new issue shares and market purchase shares.
RBS Group 2010260
Directors’ remuneration report continued