Tesco 2014 Annual Report Download - page 59

Policy table
The following sets out our Directors’ Remuneration Policy (the ‘Policy’). This Policy will be put forward for shareholder approval at the
2014 AGM on 27 June 2014 and will apply to payments made from this date.
Further details regarding the operation of the Policy for the 2014/15 financial year can be found on pages 43 to 44 of this report.
Policy table
Element
Purpose and link
to strategy Operation Maximum opportunity Performance measures
Fixed
Base salary • The role of base salary
is to support the
recruitment and
retention of Executive
Directors of the calibre
required to develop and
deliver the strategy.
• Base salary provides
fixed remuneration for
the role, which reflects
the size and scope of
the Executive Directors’
responsibilities and
their experience.
• The Committee sets base salary taking
into account:
– The individual’s skills and
experience and their performance.
– Salary levels at leading FTSE
companies and other large consumer
business companies in the UK
and internationally.
– Pay and conditions elsewhere in
the Group.
• Base salary is normally reviewed
annually with changes effective from
1 July but may be reviewed more
frequently if the Committee determines
this is appropriate.
• While there is no maximum salary,
increases will normally be in line with
the typical level of increase awarded
to other employees in the Group.
• However, increases may be above this
level in certain circumstances such as:
– Where a new Executive Director
has been appointed to the Board at
a lower than typical market salary
to allow for growth in the role then
larger increases may be awarded to
move salary positioning closer to
typical market level as the
Executive gains experience.
– Where an Executive Director has
been promoted or has had a
change in responsibilities, salary
increases in excess of the above
limit may be awarded.
– Where there has been a significant
change in market practice.
• For details of salary levels from
1 July 2013 see page 43 of the
Annual Remuneration Report.
n/a
Pension • To provide a market-
leading retirement
benefit that will foster
loyalty and retain
experienced Executive
Directors, which
supports our culture of
developing talent
internally.
• A key incentive and
retention tool
throughout the
organisation.
• The CEO participates in a defined
benefit pension plan.
• This is provided through registered
arrangements up to approved HMRC limits,
with the remainder provided through a
secured unfunded arrangement.
• The Committee may determine that
alternative pension provisions will operate
for new appointments to the Board. When
determining pension arrangements for new
appointments the Board will give regard to
the cost of the arrangements, market
practice and the pension arrangements
received elsewhere in the Group.
• Up to two-thirds of base salary
at retirement with a minimum
10% of salary per annum
employee contribution.
• In the event that an Executive
Director retires early there will be no
augmentation of pension benefits.
n/a
Benefits • To provide a market-
competitive level of
benefits for our
Executive Directors.
• The Committee policy is to set benefit
provision at an appropriate market
competitive level taking into account the
individual’s home jurisdiction, the
jurisdiction in which the individual is based,
typical practice and the level of benefits
provided for other employees in the Group.
• Core benefits – Benefits currently include
but are not limited to a company car or car
allowance, fuel, private use of a chauffeur,
life assurance, disability and health
insurance (for the Executive Director and
his family), health screening, Directors’
and Officers’ liability insurance and
provision of indemnity, security, club
membership and staff discount on the
same basis as other employees.
• The Committee may remove benefits that
Executive Directors receive or introduce
other benefits if it is considered
appropriate to do so.
• Executive Directors shall be reimbursed
for all reasonable expenses and the
Company may settle any tax incurred
in relation to these.
• The overall level of benefits will
depend on the cost of providing
individual items and the individual’s
circumstances and therefore there
is no maximum level of benefit.
• When determining the level of
benefits the Committee will
consider the factors outlined in
the ‘Operation’ column.
n/a
56 Tesco PLC Annual Report and Financial Statements 2014
2013/14 Policy Report
Directors’ remuneration report continued