Tesco 2013 Annual Report Download - page 57

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53
Tesco PLC Annual Report and Financial Statements 2013
OVERVIEW BUSINESS REVIEW PERFORMANCE REVIEW GOVERNANCE FINANCIAL STATEMENTS
Short-term bonus 2012/13
Performance measures and payout
Performance measures Maximum opportunity 2012/13 payout
70% based on profitability Underlying profit performance • CEO – Maximum bonus opportunity
of 250% of base salary
• CFO – Maximum bonus opportunity
of 200% of base salary
0% payout
30% based on strategic performance • UK like-for-like sales growth
• UK ROCE
• UK customer satisfaction
• Group internet sales
• Group employee engagement
• Group CO2 reduction
The following illustrates performance against targets for various objectives.
Measures Performance
Below Threshold Target Stretch
Profitability Underlying profit
Strategic UK like-for-like sales growth
UK return on capital employed
UK customer satisfaction
Group internet sales
Group CO2 reduction
Group employee engagement
Despite good progress against a number of strategic operational measures and encouraging financial performance in the latter part of the year,
annual profitability targets were not met. There will therefore be no bonus paid in respect of 2012/13.
Long-term incentives
Vesting of 2010/11 to 2012/13 awards
Awards vesting in the year were made under the previous long-term incentive framework, comprising both share options and performance related
shares. The performance conditions applying to these awards and achievement against these targets are summarised below:
Performance measures and payout
Maximum opportunity 2012/13 payout
Earnings per share
• First 100% subject to the achievement of
underlying diluted EPS growth of at least
RPI plus 9% over three years and the
balance vesting for achieving growth of
at least RPI plus 15% over three years.
• Granted in 2010/11.
• Performance period ended 2012/13.
• Share options with a face
value of 200% of salary
at the date of grant.
0% of maximum
opportunity vested.
100% vesting
200% vesting
EPS growth performance was below
threshold and therefore share options
will not vest
EPS growth above RPI over three years
0
5
10
15
20
(%)
• The increase in underlying diluted EPS above RPI over the three years from 2010/11 to 2012/13
was below threshold and therefore awards granted in 2010 will lapse.
Performance measures and payout