Remuneration report.

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Pensions /

The Group aims to provide pension benefits in line with market practice and which allows executives to plan effectively for their retirement.

Both Jerry Buhlmann and Nick Priday are members of a UK HMRC approved group personal pension plan scheme. Pensionable salary is limited to base salary excluding all bonuses and other benefits. Annual employer pension contributions or salary equivalent payments are shown in the audited Directors’ Remuneration table.

In 2011, in response to changes to the UK Pension Tax Relief, it was agreed that any existing annual pension benefit exceeding £50,000 per annum would be made as a separate cash payment.

Service contracts /

Details of the service contracts of those who served as executive directors during the year are set out below. Apart from Harold Mitchell, whose appointment is for a 2 year term expiring on 17 November 2012, executive directors have rolling service contracts which expire at normal retirement age unless terminated beforehand in accordance with the terms of the individual contract and contain non-compete obligations.

Name Contract date Notice period from Company Notice period from director
Jerry Buhlmann 20.04.10 12 months 6 months
Nick Priday 01.09.09 12 months 6 months
Robert Philpott (retired 31.12.11) 20.06.02 12 months 12 months
Harold Mitchell 15.03.11 6 months 6 months

Unless there are exceptional circumstances, it is the Company’s policy that notice periods to be given by the Company will not exceed 12 months. In addition, although they may contain provisions entitling the Company to make payments in lieu of notice, contracts will not include liquidated damages clauses and any termination benefits will be calculated on normal English legal contractual principles taking into account a director’s duty to mitigate his loss.

Non-executive directors /

Non-executive directors are appointed under letters of engagement for an initial term of three years with a one month notice period. Renewal of appointments for a further term of three years is not automatic. The fees of the non-executive directors are approved at a board meeting at which the non-executive directors do not vote. Fees are based on time commitment and responsibility. Kepler Associates provided external market data when fee levels were last increased in 2008. The current fee structure, which applied throughout the year, is shown below.

Base fee £45,000
Plus:  
Chairman of Audit Committee £10,000
Chairman of Remuneration Committee £10,000
Senior Independent Director £10,000

John Napier’s annual fee as Chairman is £300,000. Neither he nor any of the other non-executive directors participates in an incentive scheme or receives a bonus or pension contribution. Apart from John Napier, whose benefits are shown below, non-executive directors do not receive benefits from the Company. Dates of appointment and unexpired terms are shown below:

Non-executive Director Date of first
appointment
to the Board		 Contract date Date(s) of re-appointment Unexpired term
as at 14 March 2012
John Napier 30.06.08 07.04.11 15.03.11 2 years 3 months
John Brady 01.08.09 10.07.09   4 months
Simon Laffin 01.08.09 10.07.09   4 months
Martin Read 01.08.09 10.07.09   4 months
Charles Strauss 05.09.03 06.04.11 05.09.06 and 05.09.09 6 months
Lorraine Trainer 02.08.05 23.08.11 02.08.08 and 02.08.11 1 year 2 months

Audited directors’ remuneration /

  Salary
and Fees
£’000(a)		 Benefits
£’000(b)		 Annual
Cash
Bonus
£’000(c)		 Total
2011
£’000		 Total
2010
£’000		 Pensions
2011
£’000(d)		 Pensions
2010
£’000		 Termination
payments
£’000(e)
John Brady 45 – – 45 45 – – –
Jerry Buhlmann 750 52 600 1,402 1,052 195 172 –
Simon Laffin 55 – – 55 55 – – –
Harold Mitchell
(appointed 15.12.10)		 53 – – 53 – – – –
John Napier 300 17 – 317 516 – – –
Robert Philpott
(appointed 18.03.10,
retired 31.12.11)		 359 16 359 734 594 108 112 1,184
Nick Priday 338 23 300 661 454 84 71 –
Martin Read 45 – – 45 45 – – –
Charles Strauss 55 – – 55 55 – – –
Lorraine Trainer 55 – – 55 55 – – –
TOTALS 2,055 108 1,259 3,422 2,871 387 355 1,184

The figures above relate to remuneration earned by directors during the year or, if shorter, their term of office during the year.

Notes:

(a)
The fee payable in respect of Simon Laffin’s services is paid to Simon Laffin Business Services Limited.
(b)
Executive directors’ benefits relate generally to the provision of a car, car cash allowance, fuel, life assurance and various disability and health insurances. John Napier’s benefits comprise an accommodation allowance of £33,000 pa (gross) and private health insurance.
(c)
The main terms of the bonus schemes are summarised above.
(d)
As a result of recent changes in UK tax relief on pension contributions, the Company remitted part of the sum payable in respect of pensions for each of Jerry Buhlmann and Nick Priday as a separate pension allowance, which was paid to them in cash.
(e)
Total payments made (or agreed to be paid) in the year to Robert Philpott in connection with the termination of his employment following the sale of Synovate in October 2011 are as follows:
 
–
£547,000, comprising 12 months’ salary and benefits in lieu of notice, including pension contribution and car allowance, in accordance with his contractual entitlement
–
An agreed compensatory payment of £627,000 in recognition of the value created for shareholders by Robert Philpott during his time as CEO of Synovate. Aegis completed the sale of Synovate for an enterprise value of £525m and subsequently returned some £200m to shareholders through a special dividend.
In addition, 12 months’ healthcare cover will be provided at a cost of £10,000.

It is the Board’s policy that executive directors with external non-executive positions are allowed to retain any fees from such positions. In general, before an executive director may accept an external non-executive position, permission must be sought from the Chairman, who will take into consideration the amount of time involvement required by the role. Harold Mitchell holds non-executive directorships at Crown Limited and ThoroughVision in Australia, (for which he receives fees of approximately £71,000 and £39,000 pa respectively), and in various community organisations referred to in his biography in the Board of directors, (all of which are unpaid). None of the other executive directors holds any external non-executive appointments.

Except as disclosed in Note 33 to the financial statements, none of the directors was materially or beneficially interested in any contract of significance with the Company or any of its subsidiary undertakings during or at the end of the financial year ended 31 December 2011.

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