The last three years have seen a major improvement in the performance of the Group and substantial value created for shareholders, as the executive Directors succeeded in delivering the Group’s turnaround plans since their appointment in 2008.
FY2012 was a year of change amongst the executive Directors of C&C with John Dunsmore being succeeded as Group Chief Executive Officer by Stephen Glancey and Kenny Neison appointed as Group Chief Financial Officer as of 1 January 2012. This was a smooth transition and ensured the Group remained focused on its growth plans and delivering on its objectives. The details of the remuneration packages of the new appointees are set out below.
Their appointment also coincided with the vesting of the final tranche of Interests awarded to the executive Directors under the Joint Share Ownership Plan (JSOP). This award was made with shareholder approval in December 2008. As a replacement for the JSOP, the new remuneration packages include an entitlement to an award under the Long Term Incentive Plan (LTIP (Part I)) in tandem with their existing entitlement under the current Executive Share Option Scheme (ESOS).
The vesting of awards under the JSOP means that Stephen Glancey and Kenny Neison now hold, respectively, shares in C&C with a value equivalent to 27 times and 19 times their new salaries, which is well in excess of typical executive shareholdings. In order to encourage the retention of such a large holding and alignment of their interests with those of other shareholders, the Remuneration Committee, is seeking shareholder approval at the AGM to allow dividends to be paid on vested awards under the JSOP and also enable it, where desirable, to agree to extend the period during which vested awards may remain in the JSOP and allow participants greater scope to transfer vested awards to family members and related trusts.
It is also seeking approval to allow dividend equivalents to accrue under the LTIP (Part I). Further details are given below and in the notice of AGM.
The Remuneration Committee considers that the appointment of the executive Directors to their roles and the performance-related incentives agreed with them and the alignment of their interests with shareholders generally are critical to the success of the Group as it continues to pursue its strategic aims.
BASIS OF REPORT
The following pages set out the Board’s remuneration policy as it applies to the executive Directors. In accordance with the UK Corporate Governance Code (whilst this is not a legal requirement) the Directors are proposing at the 2012 Annual General Meeting an advisory non-binding vote to receive and consider this report of the Remuneration Committee on Directors’ Remuneration.
The Remuneration Committee of the Board consists solely of independent non-executive Directors. Philip Lynch is Chairman of the
Committee. During the year ended 29 February 2012 other members of the Committee were Richard Holroyd and Liam FitzGerald
(resigned 29 February 2012). Stewart Gilliland joined the Committee on 17 April 2012.
The Chairman of the Board and the Group Chief Executive Officer are fully consulted on remuneration proposals but neither is present when his own remuneration is discussed. The Remuneration Committee obtains external advice from remuneration consultants and other independent firms on compensation when necessary. During the year ended 29 February 2012 the Committee obtained advice from Towers Watson in respect of the executive Directors’ remuneration and from New Bridge Street (formerly known as Hewitt New Bridge Street), an Aon Hewitt company, in respect of the Group’s employee share schemes and other matters. A separate division of Towers Watson has advised the trustees of the Group’s defined benefit schemes but the Committee was satisfied that this did not compromise their independence. Apart from that, neither of the consultants has any other connection with the Group. The Remuneration Committee also obtains advice from the Company Secretary and the Group Human Resources Director.
TERMS OF REFERENCE OF COMMITTEE
The Committee’s terms of reference, which are available on the C&C website www.candcgroupplc.com, include making recommendations to the Board in respect of Group policy on executive and senior management remuneration and the consideration and determination of the remuneration of the executive Directors and senior management. The Committee also oversees the Group’s employee share schemes.
The main aim of the Group’s remuneration policy is to attract, retain and reward the Group’s executive Directors and senior
management, having regard to the need to ensure that they are properly remunerated and motivated to perform in the best interests
of shareholders and having regard also to comparative remuneration levels in the sector and amongst other Irish and UK-listed
companies of similar size and scope as well as pay levels and conditions across the rest of the Group.
A key policy adopted by the Group for the remuneration of executive Directors and senior management is to align their interests with those of shareholders through appropriate share-based long-term incentives. In addition, performance-related annual rewards aligned with the Group’s key financial and operational goals and based on stretching targets are an important component of the total executive remuneration package.
Furthermore, the Group seeks to bring transparency to Directors’ and employees’ reward structures through the use of cash allowances in place of benefits in kind and to align the interests of Directors and other employees with those of shareholders through share-based and performance-based rewards.
As announced on 19 October 2011, Stephen Glancey was appointed Chief Executive Officer of the Group and Kenny Neison Chief
Financial Officer of the Group in each case with effect from 1 January 2012. Consequently, the Remuneration Committee reviewed
the remuneration of each of them to reflect their new roles and responsibilities.
It was agreed that the salary for the Group Chief Executive Officer role should remain at the level fixed for John Dunsmore’s appointment to that role in November 2008. The salary for the Group Chief Financial Officer role is the same as that previously applicable to the Group Chief Operating Officer. Previous entitlements to a guaranteed 3% annual increase, which had been waived, are now removed. The salaries are now expressed as the pounds sterling equivalent. Accordingly the following annual basic salaries were agreed with effect from 1 January 2012, and are subject to annual review in the same way as for other employees:
|Stephen Glancey||£585,000 (equivalent to €698,600 at the year-end exchange rate)|
|Kenny Neison||£420,000 (equivalent to €501,500 at the year-end exchange rate)|
The Remuneration Committee also agreed that any annual bonus for each executive Director under the Group’s performancerelated cash bonus scheme, payments in respect of pension and benefits and cover for life insurance and permanent health insurance would be calculated on the same basis as previously but by reference to each Director’s new annual basic salary. It was also agreed that each of them would continue to be entitled to an annual grant under the C&C Executive Share Option Scheme at 150% of their revised annual basic salary with effect from FY2013.
Since the executive Directors’ awards under the JSOP had all fully vested and there was no entitlement to any further awards under that Plan, it was agreed that each executive Director would be entitled to an annual award under the LTIP (Part I) at 100% of annual basic salary. All awards are made subject to performance and all incentive schemes are subject to review. However, the Board stated its intention that in the event of a review an equivalent value as above should be offered to the executive Directors, whether by way of LTIP (Part I) or other incentive scheme in order to maintain the market competitiveness of each executive Director’s package.
It was further agreed that each Director’s bonus entitlement (if any) for FY2012 would be calculated by reference to his new annual basic salary for the whole financial year and exceptionally an award under the LTIP (Part I) would be made in FY2012 at 100% of the new salary. For further details of bonus arrangements see Performance Related Annual Bonus on page 49.
The other principal terms and conditions of the Director’s service contract were unchanged.
The Group accepted the resignation of John Dunsmore and agreed with him that he would cease to be Group Chief Executive Officer on 31 December 2011 and would cease to be an executive Director and employee in the Group on 29 February 2012. It was agreed that he would continue to be entitled to a payment equal to his bonus (subject to achievement of bonus targets) in respect of FY2012 but no other compensation for loss of office was paid. Any notice due under his service contract was waived. All of Mr Dunsmore’s Interests in the Joint Share Ownership Plan vested prior to the cessation of his employment and it was agreed that he was entitled to retain them within the Plan, which he has elected to do. It was also agreed that any options held by him under the Executive Share Option Scheme lapsed upon cessation of his employment.
EXECUTIVE DIRECTORS’ REMUNERATION
The main elements of the remuneration package for the executive Directors and senior management are basic salary and benefits
(including contributions to, or in lieu of, pension, company car and health benefits), performance-related annual bonus and longer
term share incentives.
A summary of the remuneration applicable to the executive Directors is as follows:
|Fixed Remuneration||Performance-linked remuneration|
|Base salary – subject to discretionary review.Benefits – a 7.5% cash allowance for car and health benefits.Pension – allowance of 25% of basic salary as cash or pension contribution.||Annual incentives
Cash bonus – up to a maximum of80% of basic salary, subject to the achievement of a Group operating profit target.
|Long term incentives
Annual share option grants - 150% of basic salary under the Executive Share Option Scheme with a prevesting earnings per share performance target; no retesting permitted
Up to FY2012: Joint Share Ownership Plan – awards, subject in part to the achievement of a share price performance condition, granted in December 2008 to facilitate recruitment. Plan approved by shareholders at an EGM in December 2008.
From FY2012: Annual award under the LTIP (Part I) - 100% of basic salary subject to three-year earnings per share growth and Total Shareholder Return performance conditions; no retesting permitted
The composition of each executive Director’s on-target and maximum remuneration for FY2013 is as follows:
|Target scenario||Mix||Maximum scenario||Mix|
|Base||Base salary||40%||Base salary||27.5%|
|Bonus||Assumes target bonus at 60% of base salary||24%||Assumes max bonus at 80% of base salary||22%|
|Options||Expected value||14%||Expected value||16%|
|LTIP (Part I)||Threshold vesting - 30%||12%||Full vesting - 100%||27.5%|
|Pension||Pension allowance - 25% of base salary||10%||Pension allowance - 25% of base salary||7%|
SERVICE CONTRACTS OF EXECUTIVE DIRECTORS
Each of the executive Directors is employed on a service contract. None of them has a service contract with a notice period in
excess of one year. The service contracts do not contain any pre-determined compensation payments in the event of termination
of office or employment. Details of the service contracts of the executive Directors in office during the year are as follows:
|Contract date||Notice period||Unexpiredterm of contract|
|John Dunsmore||9 November 2008||12 months||n/a|
|Stephen Glancey||9 November 2008, amended 28 February 2012||12 months||n/a|
|Kenny Neison||9 November 2008, amended 28 February 2012||12 months||n/a|
Basic Salary and Benefits
The salary levels of executive Directors are normally reviewed together with those of senior management annually in January.
The executive Directors receive a cash allowance of 7.5% of basic salary in lieu of benefits such as company car or health benefits. The Group also provides death-in-service cover of four times annual basic salary.
No current executive Director or member of senior management accrues any benefits under a defined benefit pension scheme. Payments in respect of pensions are calculated on basic salary only and no incentive or benefit elements are included.
Under their service contracts Stephen Glancey and Kenny Neison each receive a cash payment of 25% of basic salary, in order to provide their own pension benefits, inclusive in Kenny Neison’s case of a fixed sterling payment into a personal pension plan.
Performance Related Annual Bonus
The Group operates a performance-related cash bonus scheme for executive Directors, senior management and other employees. The maximum annual bonus payable is 80% of basic salary for the executive Directors, 70% for senior management and lesser amounts for other employees. The performance metric for bonuses for the executive Directors is Group operating profit and the target is set in accordance with the Group’s long-term growth plan. The executive is entitled to a reduced bonus of 30% when a minimum threshold is achieved, a basic bonus totalling 60% when a target threshold is achieved and a further bonus of 20% when performance achieves a higher ‘stretch’ threshold. For the year ended 29 February 2012 the Remuneration Committee determined that the target threshold for the executive Directors was achieved and bonuses have been accrued and will be paid to them at this level.
The Remuneration Committee does not require any part of the executive Directors’ annual cash bonus to be deferred, whether into shares or otherwise. The Committee recognises the arguments for deferral but believes that, in view of their substantial shareholdings in the Company, the executive Directors are already adequately motivated to be mindful of the longer-term consequences of their operational and strategic decisions.
The bonus scheme and the payment of bonuses are subject to annual approval by the Remuneration Committee. The Committee reserves the right to vary, amend, replace or discontinue the bonus scheme at any time depending on business needs and/ or financial viability or as appropriate by reference to any changes in corporate structure during the financial year. The Remuneration Committee has approved a bonus scheme for the year ending 28 February 2013 with a similar structure to that described above.
Share Options and Share Awards
The service contracts of the executive Directors in office at the date of this report entitle them to an annual grant under the C&C’s Executive Share Option Scheme of share options with a value equal to 150% of basic salary and an annual award under the LTIP (Part I) of shares (by way of nil cost options) with a value equal to 100% of annual basic salary. The Board will continue to review all incentive schemes annually and all awards are made subject to performance.
Details of the interests of the Directors in share options and share awards granted under the Joint Share Ownership Plan, the Executive Share Option Scheme, and the LTIP (Part I) are set out on page 51 (Joint Share Ownership Plan), pages 54 and 55 (Executive Share Option Scheme and LTIP (Part I)) and in note 4.
EXECUTIVE SHARE OPTION SCHEME
The C&C Executive Share Option Scheme was established in May 2004. Options are granted solely at the discretion of the
Remuneration Committee save where the executive has a contractual entitlement. Under the scheme rules, options cannot be
granted to non-executive Directors. In respect of grants since admission, the maximum grant that can normally be made to any
individual in any one year is an award of 150% of basic salary in that year.
Options will not normally be exercisable until three years after the date of grant and are subject to meeting a specific performance target. This performance target requires the Group’s earnings per share (before exceptional items, and including any other adjustments authorised by the Remuneration Committee) to increase by 5% per annum in excess of the change in the Irish Consumer Price Index (Irish CPI) over the three year period from date of grant, in order for options to vest.
The options lapse if the performance target is not met after the relevant three year period. There is no re-testing provision in the event of a change of control of the Company. However, for qualifying leavers in circumstances such as death, ill-health, redundancy or business disposal, the performance target may be measured over a shorter time period, and if the Remuneration Committee determines that the target is met, the options may be exercised within a reduced time period.
The fair value cost of the share options is amortised over the vesting period to the extent that the Directors believe that the options will vest. The fair value of each award is disclosed in note 4 to the Financial Statements (Share Based Payments) on pages 81 to 85.
In 2010 the Group established Part 2 of the Scheme, which is a scheme approved by the UK Revenue authorities and allows grants of options over shares with a market value of up to £30,000 to be made on a tax efficient basis to employees who are UK taxpayers.
LONG TERM INCENTIVE PLAN (Part I) (LTIP (Part I))
The C&C share-based LTIP (Part I) for executive Directors and senior management was established at the time of the Group’s
admission to listing in May 2004. Under the plan, awards of up to 100% of basic salary may be granted. Awards are in the form of nilcost
options over shares, based on the closing share price on the day before the grant date.
For awards made during FY2012, the Remuneration Committee revised the performance conditions in the light of current best practice as set out below. The performance conditions were chosen as a dual metric to align the interests of participants with those of shareholders while at the same time providing a target related to the Group’s financial performance. The Committee considers that this dual-metric performance condition is sufficiently stretching to ensure that participants are rewarded only if shareholders’ interests are successfully met.
As to 50% of the award, a performance condition relating to relative total shareholder return (TSR) applies, with an underpin as mentioned below. 30% of this part of the award vests if the Group’s TSR over a three-year period equals the median TSR of a comparator group; 100% of this part of the award vests if the Group’s TSR over a three-year period equals or exceeds the TSR of the upper quartile of the comparator group; for performance between the median and the upper quartile there is straight-line pro-rating between 30% and 100%. None of this part of the award vests if the Group’s TSR over a three-year period is less than the median TSR of a comparator group. The companies in the comparator group are as follows: Anheuser-Busch Inbev N.V., Carlsberg Breweries A/S, Constellation Brands Inc., Diageo plc, Heineken Holding N.V., Molson Coors Brewing Company, Remy Cointreau SA, SABMiller plc, Britvic plc, Greene King plc, Marston’s plc, Young & Co.’s Brewery plc and AG Barr plc. TSR is calculated by reference to the change in the net return index for each comparator company, as calculated by an independent financial information provider selected by the Committee from time to time.
As to the remaining 50% of the award, a performance condition relating to growth in earnings per share (EPS) applies. 30% of this part of the award vests if the Group’s EPS over a three year period achieves 4% per annum growth in real terms (compared with Irish CPI). 100% of this part of the award vests if the Group’s EPS over a three year period achieves 10% per annum real growth. There is straight-line pro-rating between 30% and 100% for performance between 4% and 10% per annum. None of this part of the award vests if the real growth in the Group’s EPS over a three-year period is less than 4% per annum. EPS is calculated before exceptional items and including other adjustments authorised by the Remuneration Committee.
In respect of the TSR condition, an underpin applies: the growth in the Group’s EPS over the three-year period must be 5% or more per annum in real terms (compared with Irish CPI) over the same period; alternatively the Remuneration Committee must be satisfied that the Group’s underlying financial performance warrants that level of vesting; otherwise the award lapses.
Currently, awards that vest under the Plan do not reflect any equivalent value to that which accrues to shareholders by way of dividends during the vesting period. In order to achieve a better alignment of the interests of participants in the Plan with the interests of shareholders, the Company is proposing that upon vesting such equivalent value should accrue to the participant. Where awards do not vest, then nor would any such equivalent value representing rolled up dividends by way of scrip or cash amount. A resolution to implement this variation of rights will be proposed at the Annual General Meeting to be held in June 2012 and further information is contained in the Notice of AGM. The amendment will not be retrospective. The fair value cost of the share awards is amortised over the vesting period to the extent that the Directors believe that the awards will vest. The fair value of each award is disclosed in note 4 to the Financial Statements (Share Based Payments).
C&C JOINT SHARE OWNERSHIP PLAN
In order to secure the services of John Dunsmore, Stephen Glancey and Kenny Neison in November 2008, a remuneration package
was agreed which included a high level of share-based incentives under the C&C Joint Share Ownership Plan, which was approved
by shareholders at an Extraordinary General Meeting (‘EGM’) on 18 December 2008. The Remuneration Committee supervises the
operation of the Plan. The main terms of the Plan are as follows:
Awards were granted to John Dunsmore, Stephen Glancey and Kenny Neison in December 2008. In total they acquired interests in 12.8 million ordinary shares, out of the 16.0 million shares allocated to the Plan. Interests in the remaining 3.2 million shares were granted in June and December 2009 to existing and new members of senior management.
Nature of interests
Interests take the form of a restricted interest in ordinary shares in the Company (“Interest”). An Interest permits a participant to benefit from the increase (if any) in the value of a number of ordinary shares in the Company (“Shares”) over which the Interest is acquired. In order to acquire an Interest, a participant must enter into a joint share ownership agreement with the trustees of the Group’s employee benefit trust under which the participant and the trustee jointly acquire the Shares. Under the terms of the plan participants must contribute funding equal to 10% of the issue price on the acquisition of the Interest (the “Entry Price”) with the balancing amount (the “Hurdle Value”) being funded by the trustees of the employee benefit trust.
For Interests acquired in December 2008 and June 2009, the Entry Price was €0.115 per share and the Hurdle Value was €1.035 per share and for the Interests acquired in December 2009, the Entry Price was €0.247 per share and the Hurdle Value was €2.223.
When an Interest vests, the trustees may, at the request of the participant and on payment of the balance of the further amount referred to below, transfer shares to the participant of equal value to the participant’s Interest or the Shares may be sold by the trustees, who will account to the participant for the difference between the sale proceeds (less expenses) and the Hurdle Value.
Rights attaching to Interests
The voting rights attaching to the Shares subject to the Interests will be exercised by the trustees of the employee benefit trust as they consider appropriate and in the best interests of the beneficiaries of the employee benefit trust, save that each participant may direct the votes on his vested Interests or, if greater, 10% of the Shares relevant to his Interest.
Dividends on the Shares subject to the Interests accrue solely to the trustees of the employee benefit trust but have been waived by them. In order to achieve a better alignment of the interests of those Directors and employees who participate in the Plan with the interests of shareholders and to encourage retention of interests within the Plan, the Company is seeking shareholder approval at the AGM to a proposal that, where Interests have vested, dividends on the jointly-owned Shares should accrue to the trustees and to the participant in proportion to their respective economic interests. This would not apply where Interests do not vest and would only apply to continuing employees. The amendment will not be retrospective. Currently if Plan Shares have not been sold by the seventh anniversary of their acquisition date, the Trustees must then sell them and pay the Participant his share of the sale proceeds on the first permitted dealing day thereafter. The Company is seeking shareholder approval at the AGM to enable it, where desirable, to extend this period to the tenth anniversary of the acquisition date, thereby allowing participants greater flexibility in determining when to realise their vested interests. The Company is also seeking shareholder approval to allow it to give greater flexibility to participants who are continuing employees to transfer their vested interests to family members and related trusts.
The Company believes these amendments will encourage retention of vested interests in the Plan. A resolution to implement these variations of rights will be proposed at the Annual General Meeting to be held in June 2012 and further information is contained in the Notice of AGM.
All of the Interests are subject to a time-vesting condition with one-third of the Interest in the Shares vesting on each of the first, second and third anniversaries of acquisition. Half of the Interests in the Shares are subject to an additional pre-vesting share price target. In order for these latter Interests to vest, for the Interests granted to the executive Directors in December 2008 the Company’s share price must be greater than €2.50 for at least 20 days out of 40 consecutive dealing days during the five-year period commencing on the date of acquisition of the Interest. This vesting condition was met during 2009. Accordingly as at 29 February 2012, all of the Interests awarded to the current and former executive Directors in December 2008 had vested.
Loans and further amounts
The award of an Interest under the Plan may give rise to a loan for tax and company law purposes as described under loans to Directors on page 55.
OTHER EMPLOYEE SHARE SCHEMES
In addition to the above schemes, the executive Directors are eligible to participate on the same terms as all other eligible
employees in the UK Revenue-approved Share Incentive Plan that the Company operates. The Group has established a number
of other share-based schemes, in which Directors are not eligible to participate, details of which are also given in note 4 to the
Financial Statements (Share Based Payments) on pages 81 to 85.
During the year, the Remuneration Committee finalised its consideration of a review of the Group’s employee share schemes in the light of current best practice and experience gained from previous awards. The Committee approved the resulting recommendations. In consequence the performance condition under the LTIP (Part I) was reformulated and the Committee recommenced awards under this Plan to executive Directors and senior management within existing limits. The Committee also approved the introduction of a deferred bonus share scheme under the LTIP (Part II). This scheme is not open to executive Directors and will be settled by market purchases. Discretionary awards were made to middle management. The Committee discontinued awards under the C&C Executive Share Option Scheme apart from contractual awards to the executive Directors and a few other exceptional awards.
The Committee approved the introduction of share matching plans in Ireland and the UK under the Approved Profit Sharing Scheme. A further scheme for overseas employees was introduced. These schemes are open to executive Directors and will be settled by market purchases. Further details are given on page 83.
In consequence of its review, the Company is proposing amendments to Parts A and B of the C&C Profit Sharing Scheme (APSS), to take account of current best and market practice and to bring the Irish PSS and the UK SIP into closer alignment to the extent permitted by the applicable legislation. Approval is also being sought to reapprove the APSS (as amended) so that it can be used for a further 10 years without having to go back to shareholders. A resolution to implement these variations will be proposed at the Annual General Meeting to be held in June 2012.
The Company does not impose minimum shareholding requirements on executive Directors. However, the current executive Directors, Stephen Glancey and Kenny Neison, have significant shareholdings in the Company as set out below, representing approximately 27 and 19 times their respective base salary, well in excess of usual formal shareholding guidelines (generally between one and 2½ times base salary). The Remuneration Committee is therefore of the view that the executive Directors’ interests are sufficiently aligned with those of other shareholders without the need for additional shareholding guidelines.
Full details of the share awards and the maximum dilution are given in note 4 (Share Based Payments) on pages 81 to 85 . All share
plans with the exception of the Joint Share Ownership Plan, which was specifically approved by shareholders in December 2008,
contain the share dilution limits recommended in institutional guidance, namely that no awards shall be granted which would cause
the number of Shares issued in the ten years ending with the date of grant (a) under any discretionary or executive share scheme
adopted by the Company other than the Joint Share Ownership Plan to exceed 5 per cent., and (b) under any employees’ share
scheme adopted by the Company other than the Joint Share Ownership Plan to exceed 10 per cent., of the ordinary share capital of
the Company in issue at that time.
In the period from the listing of the Group on the Irish Stock Exchange in 2004 to 29 February 2012, commitments to issue new shares or re-issue treasury shares under discretionary share schemes (net of lapsed and forfeited commitments and excluding the Joint Share Ownership Plan which was specifically approved by shareholders in December 2008) amounted to 3.46% of the Company’s issued ordinary share capital as at 29 February 2012. No equivalent commitments have been made under nondiscretionary
NON-EXECUTIVE DIRECTORS’ REMUNERATION
Each of the non-executive Directors in office during the financial year was appointed by way of a letter of appointment. Each
appointment was for an initial term of three years, renewable by agreement (but now subject to annual re-election by the members
in General Meeting). The letter of appointment of Sir Brian Stewart is dated 10 February 2010. The letters of appointment of all other
non-executive Directors in office during the financial year were dated 26 April 2004. The letters of appointment are each terminable
by either party on one month’s notice and do not contain any pre-determined compensation payments in the event of termination of
office or employment.
The remuneration of the non-executive Directors is determined by the Board of Directors as a whole. The Chairman is not involved in determining his own remuneration. Non-executive Directors receive a Director’s fee and fees directly relating to their membership of Board sub-committees but no additional remuneration from the Company. The fees paid to non-executive Directors are set at a level which aims to attract individuals with the necessary experience and ability to make a significant contribution to the Group. No increase has been made to the basic and supplemental fees of the non-executive Directors since 2008.
|The current annual fees are as follows:|
|Senior Independent Director:||€10,000|
|Chairman of the Audit Committee:||€25,000|
|Chairman of the Remuneration Committee:||€20,000|
Non-executive Directors are not eligible to participate in the Group’s share option or other employee scheme. None of the remuneration of the non-executive Directors is performance related. Non-executive Directors’ fees are not pensionable and non-executive Directors are not eligible to join any Group pension plan. The Group also does not impose minimum shareholding requirements on non-executive Directors but encourages them to hold shares in the Company.
5 YEAR TOTAL SHAREHOLDER RETURN
For information only, the above graph shows the value as at 29 February 2012 of a €100 investment in C&C Group plc shares on 28 February 2007 compared with the ISEQ General Index.
DIRECTORS’ REMUNERATION AND INTERESTS IN SHARE CAPITAL
Details of the overall Directors’ remuneration charged to the Group income statement are shown in note 27 on pages 117 to 118. Details of the remuneration and pension benefits for each Director who served during the year ended 29 February 2012 are given on this page. The interests of the Directors and Company Secretary in the share capital of the Company and in share options are shown on pages 54 and 55. Loans to Directors are shown on page 55.
DIRECTORS’ REMUNERATION – 2012
|Sir Brian Stewart||230||-||-||-||-||-||230||178|
|Equity-settled share-based employee benefits||282||1,386|
|Average number of executive Directors||3||3|
|Average number of non-executive Directors||7||7|
(i) The Board released John Dunsmore to serve on the Board of Fuller Smith & Turner Plc as a non-executive director and chairman of its Remuneration Committee. He received and retained an annual fee of £45,000 in relation to this role.
(ii) Other fees paid to John Hogan, Richard Holroyd and Philip Lynch in 2012 and 2011 represent fees paid as Chairman of the Audit Committee, Senior Independent Director and Chairman of the Remuneration Committee respectively.
(iii) See ‘Loans to Directors’ on page 55.
No sums were paid to third parties for any Director’s services.
Directors and their interests
The interests of the Directors and Company Secretary in office at 29 February 2012 in the share capital of Group companies at the beginning of the year (or date of appointment if later) and the end of the year were:
INTERESTS IN ORDINARY SHARES OF €0.01 EACH IN C&C GROUP PLC(i)
|29 February 2012||1 March 2011 (or date of appointment if later)|
|John Dunsmore||5,120,000 (ii)||5,120,000 (ii)|
|Stephen Glancey||5,120,000 (ii)||5,120,000 (ii)|
|Kenny Neison||2,561,530 (ii)||2,561,530 (ii)|
|Sir Brian Stewart||60,000||60,000|
INTERESTS IN OPTIONS OVER ORDINARY SHARES OF €0.01 EACH IN C&C GROUP PLC
|Dateof grant||Exerciseprice||Scheme||Exerciseperiod||Total at 1March 2011(or date ofappointmentif later)||Awarded||Exercised||Lapsed||Total at 29February2012||WeightedAveragePrice|
|13/05/09||€1.94||ESOS||13/5/12 - 12/5/16||541,300||(541,300)||-|
|26/05/10||€3.205||ESOS||26/5/13 - 25/5/17||327,700||(327,700)||-|
|24/05/11||€3.6065||ESOS||24/5/14 - 23/5/18||291,140||(291,140)||-|
|13/05/09||€1.94||ESOS||13/5/12 - 12/5/16||386,600||386,600|
|26/05/10||€3.205||ESOS||26/5/13 - 25/5/17||234,100||234,100|
|24/05/11||€3.6065||ESOS||24/5/14 - 23/5/18||207,957||207,957|
|29/02/12||€0.00||LTIP (Part I)||1/3/15 - 28/8/15||191,186||191,186|
|13/05/09||€1.94||ESOS||13/5/12 - 12/5/16||232,000||232,000|
|26/05/10||€3.205||ESOS||26/5/13 - 25/5/17||140,500||140,500|
|24/05/11||€3.6065||ESOS||24/5/14 - 23/5/18||124,774||124,774|
|29/02/12||€0.00||LTIP (Part I)||1/3/15 - 28/8/15||137,262||137,262|
|01/06/10||€0.00||R&R||1/6/11 - 31/5/17||81,000||27,000 (i)||54,000|
|01/06/10||€3.21||ESOS||1/6/13 - 31/5/18||127,200||127,200|
|29/06/11||€0.00||LTIP (Part I)||29/6/14 - 28/12/14||35,380||35,380|
(i) market price at date of exercise: €2.95
Key: ESOS - Executive Share Option Scheme; LTIP (Part I) - Long Term Incentive Plan (Part I); R&R - Recruitment and Retention Plan.
No price was paid for any award of options. The price of the Company’s ordinary shares as quoted on the Irish Stock Exchange at the close of business on 29 February 2012 was €3.665 (2011: €3.535). The price of the Company’s ordinary shares ranged between €2.70 and €3.69 during the year.
There was no movement in the interests of any of the Directors or the Company Secretary in options over C&C Group plc ordinary shares between 29 February 2012 and 16 May 2012.
LOANS TO DIRECTORS
When an award is granted to an executive under the Joint Share Ownership Plan, its value is assessed for tax purposes with the
resulting value being deemed to fall due for payment on the date of grant. Under the terms of the plan, the executive must pay
the Entry Price at the date of grant and, if the tax value of the award (i.e. the initial unrestricted market value) exceeds the Entry
Price, the executive must pay a further amount, equating to the amount of such excess, before a sale of the awarded interests.
The deferral of the payment of the further amount is considered to be an interest-free loan by the Company to the executive and a
taxable benefit-in-kind arises, charged at Revenue stipulated rates (Ireland 12.5%, UK 4.0%). The resulting loans by the Company
to the executive Directors are required to be disclosed under the Companies Act 1990.
The balances of the loans outstanding to the executive Directors as referred to in the previous paragraph as at 29 February 2012 and 28 February 2011 are as follows:
When the further amount is paid, the Company compensates the executive for the obligation to pay this further amount by paying him an equivalent amount, which is, however, subject to income tax in the hands of the executive. During the financial year ended 29 February 2012, John Dunsmore paid a further amount of €110,934, thus repaying the full balance of the loan which was outstanding at 28 February 2011, for which the Company compensated him (subject to deduction of tax). The compensation is disclosed under Further Amount in Directors’ Remuneration.