RBS 2011 Annual Report Download - page 282

280 RBS Group 2011
Executive directors
In determining directors’ remuneration, the Group Remuneration Committee takes into account pay and employment conditions of employees of the
company. It does so by reference to annual market data against an assessment of the competitiveness of the current base salary ranges or
benchmarks and actual salaries in payment. Any salary increases awarded to executive directors are also considered in the context of salary increases
for the wider employee population. A summary of executive directors’ remuneration for 2011 and 2012 is set out below:
Policy 2011 arrangements 2012 arrangements
Base
salary
Base salaries are reviewed annually. Stephen Hester: £1,200,000
Bruce Van Saun: £750,000 (from 1 April 2011)
No increase to executive directors’ base salary.
Annual
Incentive
Executive directors have a normal
maximum incentive opportunity of 200%
of salary (with an exceptional maximum
of 250% of salary).
For the 2011 performance year, the annual
incentive was delivered as an allocation to Share
Bank.
Stephen Hester:
Provisional maximum allocation of 6.0 million
shares to Share Bank. Final allocation based on
performance: 3.6 million shares. Stephen Hester
has waived this award.
Bruce Van Saun:
Provisional maximum allocation of 3.75 million
shares to Share Bank. Final allocation based on
performance: 3.0 million shares.
The shares will vest in two equal tranches on the
first and second anniversaries of the date of
grant. Prior to vesting, shares will be subject to
clawback and shares must be held for a further
six months post vesting.
Both Stephen Hester and Bruce Van Saun will
have a maximum incentive opportunity of 200% of
salary (with an exceptional maximum of 250% of
salary).
Incentives will be awarded entirely in shares which
will vest in two equal tranches on the first and
second anniversaries of the date of grant. Prior to
vesting, shares will be subject to clawback and
shares must be held for a further six months post
vesting.
LTIP
A
wards to executive directors have a
normal maximum limit of 400% of salary.
A
ll awards are subject to performance
conditions, deferral and clawback.
Both Stephen Hester and Bruce Van Saun
received share awards capped at 375% of basic
salary.
The awards will vest in 2014 in an amount based
on the achievement of performance conditions
(see description on page 284). These will each
have the ability to deliver a number of shares
worth up to 100% of salary; however, the number
of shares that vest will be subject to an overall
cap in value of 375% of salary (based on salary
and share price at the time the award was made).
A
n additional six month holding period after
vesting will apply.
Stephen Hester and Bruce Van Saun will be
granted long term share awards which will
ultimately vest in a range between zero and a cap
of 300% of basic salary depending on
performance over the next three years. These
share awards have a notional value at grant
assessed at £1.62 million and £1.01 million
respectively.
The awards will vest in 2015 in an amount based
on the achievement of performance conditions
(see description on page 287). These will each
have the ability to deliver a number of shares
worth up to 100% of salary; however, the number
of shares that vest will be subject to an overall cap
in value of 300% of salary (based on salary and
share price at the time the award was made). The
notional value of these awards would be 45% of
face value, which is 135% of salary.
A
n additional six month holding period after
vesting will apply.
Benefits
(including
Pension)
Benefits are available from a flexible
account on a similar basis to other
employees.
None of the current executive directors
are members of the Group's defined
benefit pension plans. Current executive
directors receive an allowance in lieu of
pension contributions.
Benefits provided in line with Group policy.
35% (of base salary) pension allowance.
Benefits provided in line with Group policy.
35% (of base salary) pension allowance.
Directors’ remuneration report continued