Vodafone 2015 Annual Report Download - page 77

Letter from the Remuneration
Committee Chairman
Dear fellow shareholder
During a year in which we celebrated the
30th anniversary of our network carrying
Britain’s rst ever mobile phone call, it is with
great perspective on how far both our
Company and our industry have come that
I am pleased to present Vodafone’s 2015
remuneration report.
It is tting that during a year in which
we celebrated such a historic milestone
for both Vodafone and the wider industry,
the backdrop for this year’s report is our
progress on Project Spring which represents
the largest capital investment programme
in our history. In 2013 this project saw
us commit around £19 billion over two years
to expand our networks and services across
our major markets in Europe, Asia and Africa.
This programme is testament to our objective
of being an innovative market leader and our
continued dedication to providing excellent
customer experience.
Crucial to this continued success are the
behaviours and values demonstrated
by our management team, which we seek
to drive through the appropriate application
of our remuneration policy. I was therefore
pleased to see shareholders display
overwhelming support for our Policy
Report, which was approved with a vote
of 96% at the 2014 annual general meeting.
Notwithstanding such strong support,
the Committee continues to review our
policy on an annual basis so as to ensure
it remains aligned with our Company
strategy and the views of our shareholders.
Following our latest review, no changes to our
policy are proposed for 2016.
Performance during 2015
As noted above, and illustrated elsewhere
in this report, 2015 saw us make strong
progress on the operational improvement
phase of Project Spring. As a result of the
hard work demonstrated by our colleagues
throughout the Company, we have continued
to expand our 4G coverage in Europe whilst
simultaneously accelerating our growth
in data trafc across all of our markets.
Further strengthening and expanding
our network is pivotal to our aim of being
a market leader, and the rst choice for data,
in our targeted emerging markets whilst also
maintaining our position as a leading provider
in Europe.
It is in this context that I am pleased to reect
on the following strategic and operational
headlines from the year:
a the continued progression of our Project
Spring investment programme, illustrated
through £9.2 billion of capital expenditure
during the year;
a the expansion of our 4G coverage which
now reaches over 20 million customers
across 18 markets. Our European coverage
now stands at 72% and is set to reach over
90% next year;
a the increasing take-up of 3G amongst our
customers in emerging markets; and
a the growth in our xed broadband base
by 2.8 million customers both through
organic growth and the acquisition of Ono
and Hellas Online.
More on Project Spring progress:
Pages 22 to 27
Remuneration outcomes
during 2015
Under our annual bonus plan (‘GSTIP’)
performance against the four equally
weighted measures of service revenue,
EBITDA, adjusted free cash ow and
competitive performance assessment
resulted in a payout equivalent to 56.0%
of maximum. This reected a stronger EBITDA
and cash ow performance against target
which was partially offset by below target
competitive performance.
In line with our commitment to the disclosure
of annual bonus targets, further details of the
targets for the 2015 GSTIP are provided
on page 84.
The 2013 GLTI award (granted in July 2012)
was based on a combination of adjusted free
cash ow and TSR performance measured
over the three nancial years ending
31 March 2015. Despite TSR performance
of 6.5% above the median of the comparator
group, the adjusted free cash ow target
was not met, and therefore the award lapsed
in full.
Looking forward –
strategic focus for 2016
The strong progress made in 2015 in respect
of the operational improvement phase
of Project Spring has laid the foundations
required to implement the “customer
experience” phase of the programme.
Key areas of focus during this phase
include customer care, our retail and
digital platforms, the roaming experience,
and the simplication of our tariff and
product offerings. By further strengthening
these areas and combining them with the
signicant investment made in our network,
we aim to deliver a “best in class” experience
to all Vodafone customers.
As discussed below, this particular strategic
focus for 2016 is reected in the measures
that will be used to determine performance
for the 2016 GSTIP, helping to ensure
appropriate alignment between our short-
term variable incentive and immediate
strategic priorities.
Luc Vandevelde
Chairman of the Remuneration Committee
Overview Strategy review Performance Governance Financials Additional information Vodafone Group Plc
Annual Report 2015
75
Directors’ remuneration
Contents of the remuneration report
Remuneration policy
The remuneration policy table
Chairman and Non-Executive Directors’ remuneration
Page 77
Page 78
Page 82
Annual Report on remuneration
Remuneration Committee
2015 remuneration
2016 remuneration
Further remuneration information
Page 83
Page 83
Page 84
Page 90
Page 91