Dividend payments
Under the SMP and PSP, dividend equivalent payments are
made on vested but unexercised share awards, which take the
form of nil-cost options. Dividend equivalents, while notionally
tracked by IMI from grant to exercise, are not paid or transferred
to the participant until the point of exercise. These have been
included in the single figure (the table on page 69) based on
the number of dividend equivalents notionally accrued in the
financial year, valued at the price on the dividend payment date.
Any residual cash is rolled over and applied to the subsequent
dividend equivalent purchase.
Martin Lamb’s Retirement Arrangements
During 2013 Martin Lamb announced his retirement as a director
of IMI. Martin stepped down as the Chief Executive at the end of
the 2013 financial year, and retired as a director from the Board
at the AGM on 8 May 2014. His employment formally ceased at
the end of his 12 month notice period in September 2014.
Payments made in accordance with Martin Lamb’s retirement
relate to the payment of salary, contractual benefits and pension
allowance from 8 May 2014 to the end of his notice period
in September 2014. Under the terms of the plan rules, the
Committee has pro-rated the outstanding 2013 share awards
under both the SMP and PSP on a financial year basis to 31
December 2014. Performance will be measured and applied in
the normal manner to determine vesting, with the shares released
on the normal vesting date for each award. The pension payable
from the IMI Pension Funds (‘the Funds’) is reduced for early
payment, in accordance with the Fund rules, as Martin Lamb is
retiring prior to age 55. However, the Company asked the Trustee
to defer pension payments until Martin Lamb reaches age 55 in
January 2015 and to increase the pension that would otherwise
have been payable from that date to reflect this period of deferral.
The net effect of this deferral is cost neutral.
Payments to past directors (audited)
It is the Committee’s intention to disclose any payments to past
directors, including the vesting of share-based awards post
departure on a basis consistent with the executive directors.
In particular, the Committee can confirm that under the terms
of his departure, Sean Toomes’ 2011 PSP and SMP awards
were pro-rated to the date of his departure (30 June 2013)
and vested, subject to the performance conditions, on 10
March 2014 and 28 March 2014 respectively. A total of 14,282
shares vested under the PSP (13,071 award shares and 1,211
dividend shares) which equated to a value on the vesting date
of £207,089 and a total of 28,772 shares vested under the
SMP (26,332 award shares and 2,440 dividend shares) which
equated to a value on the vesting date of £418,057. Payments
made to Martin Lamb during his period as a past director were
consistent with the disclosures contained on page 79 of the
2013 Remuneration Report. Dividend equivalent payments for
vested but unexercised nil-cost option awards will continue to
be made to past directors under the terms of the original grant.
Share interests granted to executive directors during
2014 (audited)
Grants made under the Share Matching Plan
Grants under the SMP were made on 1 April 2014 in the
form of nil-cost options. The Committee invited those eligible
to participate at the maximum level permitted in respect of
2014 and the size of the award reflects an individual’s bonus
opportunity and the extent to which they had achieved the
share ownership guideline.
Awards will vest subject to the achievement of an EVA
performance condition over the three financial years ending
31 December 2016. The definition of EVA is unchanged from
that used in previous years.
Grants made under the Performance Share Plan
Grants under the PSP were made on 11 March 2014 in the
form of nil-cost options. Awards will vest subject to the
achievement of EPS growth, relative TSR and organic revenue
growth over the three financial years ending 31 December 2016.
The measures are defined consistently with previous years.
Achievement of
Share Ownership
Guideline as at
31 Dec 2013
Initial
matching
award
Value on
date of
award
1
(£000)
Award as a
percentage
of salary
M W Selway
No
26,146
383
51%
D M Hurt
Yes
71,188
1,043
243%
R M Twite
Yes
65,494
959
223%
1
The price used to purchase shares on the date of award was 1,464.87p.
Directors’ Remuneration Report (cont’d)
76
IMI plc
