Letter from the Remuneration Committee
Although business conditions were somewhat more stable this year compared to the prior year, the global economy still remained challenging. As a consequence, the Remuneration Committee has maintained its focus on ensuring that the Companys remuneration policies in general, and the packages of the executive directors in particular, were designed to allow the Company to recruit, retain and motivate its talented people and to ensure those people were fully incentivised to maximise shareholder value.
The key principles of our reward philosophy are set out in "Reward philosophy". Each year the Remuneration Committee reviews these principles as well as the operation and design of the compensation packages provided to executives. If changes are required, the Committee is both willing and able to effect those changes. The key changes made during the year are detailed below:
- In order to reflect the equal importance of growing revenue and profit we rebalanced the relative weightings of these two measures in the short-term incentive plan. At the same time we also changed the definition of profit from adjusted operating profit to EBITDA. Details of this are in the "Awards made to executive directors during the 2011 financial year".
- In order to simplify the long-term incentive awards both the co-investment requirement and the matching awards are now defined in terms of a percentage of gross salary. Details of this plan are in "The remuneration package".
- In order to ensure greater alignment with shareholders we have re-emphasised the importance of share ownership for executives and have introduced share ownership goals to all our operating company chief executives and to the rest of the senior leadership team. Details of the current ownership levels are in "Reward philosophy" where it is noted that at the year end the value of shares held by the Executive Committee exceeded £15 million.
- Finally after reviewing base salaries for the Executive Committee it was decided appropriate to make some modest salary increases. Details of the increases for the executive directors are found in "Pay and performance for the 2012 financial year" but it should be noted that the average increase for the Executive Committee is 3% which is in line with general increases for employees of the Group based in the UK.
As in previous years the Remuneration Committee has had dialogue with its shareholders about the changes and appreciates the feedback from them. The Remuneration Committee will continue to take an active interest in investors views and the voting on the remuneration report. As such, it hopes to receive your support at the AGM on 26 July 2011.
Chairman of the Remuneration Committee
17 May 2011
The Remuneration Committee is comprised to exercise independent judgement and consists only of independent non-executive directors. In anticipation of the retirement of Simon Murray on 27 July 2010, the Board appointed Samuel Jonah to the Remuneration Committee. Further details can be found in "Remuneration Committee".
|Committee members||Samuel Jonah (from 1 June 2010)|
|Simon Murray (until 27 July 2010)|
The Remuneration Committee regularly consults with the Chief Executive and the Group HR Director on various matters relating to the appropriateness of awards for executive directors and senior executives, though they are not present when their own compensation is discussed. In addition, the Group Reward and Policy Director provides a perspective on information provided to the Committee, and requests information and analyses from external advisors as required. The Deputy Group Company Secretary advises the Committee on corporate governance guidelines and acts as secretary to the Committee.
Management attendees at Remuneration Committee meetings
|Chief Executive||Vittorio Colao|
|Group HR Director||Ronald Schellekens|
|Group Reward and Policy Director||Adrian Jackson|
|Deputy Group Company Secretary||Philip Howie|
The Remuneration Committee appointed Towers Watson (TW) and PricewaterhouseCoopers LLP (pwc) as independent advisors in 2007. During the year TW supplied market data and advice on market practice and governance and pwc provided performance analyses and advice on plan design and performance measures. The advisors also provided advice to the Company on general human resource and compensation related matters. In addition, pwc provided a broad range of tax, share scheme and advisory services to the Group during the year.
As noted in his biographical details in "Board of directors" of this annual report, Philip Yea sits on an advisory board for pwc. In light of their role as advisor to the Remuneration Committee on remuneration matters, the Committee continue to consider this position and have determined that there is no conflict or potential conflict arising.
The Remuneration Committee had five meetings during the year. The Committees work during these meetings and throughout the year included, but was not limited to:
- a review of the total compensation packages of the executive directors and the most senior management of the company;
- approval of the global short-term incentive bonus framework and targets;
- approval of the 2011 global short-term incentive bonus payout;
- approval of the long-term incentive framework, targets and 2011 grant levels;
- approval of the July 2008 global long-term incentive vesting level;
- approval of the introduction of share ownership goals to all operating company chief executive officers and selected senior leadership individuals below the Board and Executive Committee;
- a review of the current UK corporate governance environment and the implications for our company;
- a review of the directors remuneration report; and
- a review of Chairmans fees.
On an annual basis, the Committees effectiveness is reviewed as part of the evaluation of the Board.Back to top
The principles of reward, as well as the individual elements of the reward package, are reviewed each year to ensure that they continue to support our company strategy. These principles are set out below.
Competitive reward assessed on a total compensation basis
Vodafone wishes to provide a level of remuneration which attracts, retains and motivates executive directors of the highest calibre. Within the package there needs to be the opportunity for executive directors to achieve significant upside for truly exceptional performance. The package provided to the executive directors is reviewed annually on a total compensation basis i.e. single elements of the package are not reviewed in isolation. When the package is reviewed it is done so in the context of individual and company performance, internal relativities, criticality of the individual to the business, experience and the scarcity or otherwise of talent with the relevant skill set.
The principal external comparator group (which is used for reference purposes only) is made up of companies of similar size and complexity to Vodafone, and is principally representative of the European top 25 companies and a few other select companies relevant to the sector. The comparator group excludes any financial services companies. When undertaking the benchmarking process the Remuneration Committee makes assumptions that individuals will invest their own money into the long-term incentive plan. This means that individuals will need to make a significant investment in order to achieve the maximum payout.
Pay for performance
A high proportion of total reward will be awarded through short-term and long-term performance related remuneration. The Remuneration Committee believes that incorporating and setting appropriate performance measures and targets in the package is paramount this will be reflected in an appropriate balance of operational and equity performance.
This is demonstrated in the charts below where we see that at target payout over 70% of the package is delivered in the form of variable pay which rises to almost 90% if maximum payout is achieved. Fixed pay comprises base salary and pension contributions, while variable pay comprises the annual bonus and the long-term incentive opportunity assuming maximum co-investment and no movement in current share price.
Alignment to shareholder interests
- Proportions for the directors other than the Chief Executive are the same.
Share ownership is a key cornerstone of our reward policy and is designed to help maintain commitment over the long-term, and to ensure that the interests of our senior management team are aligned with those of shareholders. Executive directors are expected to build and maintain a significant shareholding in Vodafone shares as follows:
- Chief Executive four times base salary; and
- Other executive directors three times base salary.
In all cases executives have been given five years to achieve these goals.
Current levels of ownership and the date by which the goal should be or was required to be achieved are as shown below:
|Goal as a|
% of salary
of salary held(1)
|Date for goal
to be achieved
|Vittorio Colao||400%||460%||4.9||July 2012|
|Andy Halford||300%||634%||4.4||July 2010|
|Michel Combes||300%||154%||1.2||June 2014|
|Stephen Pusey||300%||240%||1.3||June 2014|
- Based on a share price at 31 March 2011 of 176.5 pence and includes net intrinsic value of any option gains.
Collectively the Executive Committee including the executive directors own 8.7 million Vodafone shares, with a value of £15.2 million at 31 March 2011.
Alignment with shareholders is also achieved through the use of total shareholder return (TSR) measure in the Global Long-Term Incentive (GLTI) plan.
Incentive targets linked to business strategy
When designing our incentives, performance measures are chosen that support our strategic objectives as shown below:
|Strategic objectives||Supported by|
|Focus on key areas of growth potential Aiming to deliver organic service revenue growth of 1 4% a year until the year ended 31 March 2014 in five key areas: mobile data, emerging markets, enterprise, total communications and new services.||Revenue and relative performance targets in the Global Short-Term Incentive Plan (GSTIP).|
|Delivering value and efficiency from scale Continuing to drive benefit from the Groups scale advantage and maintain our focus on cost.||EBITDA, free cash flow and relative performance targets in the GSTIP.|
|Generate liquidity or free cash flow from non-controlled interests Aim to seek to maximise the value of non-controlled interests through generating liquidity or increasing free cash flow in order to fund profitable investments and enhance shareholders returns.||The use of TSR as a performance measure in GLTI as well as the value of the underlying shares.|
|Apply rigorous capital discipline to investment decisions Continuing to apply capital discipline to our investment decisions through rigorous commercial analysis and demanding investment criteria to ensure any investment in existing businesses or acquisitions will enhance value for shareholders.||Free cash flow targets in both the GSTIP and GLTI as well as the TSR target in the GLTI.|
Assessment of risk
In setting the balance between base salary, annual bonus and long-term incentive levels, the Remuneration Committee has considered the risk involved in the incentive schemes and is satisfied that the following design elements mitigate the principal risks:
- the heavy weighting on long-term incentives which reward sustained performance;
- the need for short-term incentive payouts to be used to purchase and hold investment shares in order to fully participate in the long-term arrangements; and
- a considerable weighting on non-financial measures in the short-term plan, which provides an external perspective on our performance by focusing on customer satisfaction and performance relative to our competitors.
The Remuneration Committee will continue to consider the risks involved in the incentive plans on an ongoing basis.Back to top
The remuneration package
The table below summarises the main components of the reward package for executive directors.
|Objective and practice||Performance period||Award size and performance conditions|
|Global Short-Term Incentive Plan (GSTIP)||
|Global Long-Term Incentive Plan (GLTI) base awards||
|Global Long-Term Incentive Plan (GLTI) co-investment matching awards||
In addition to base pay and incentive opportunities as described in the table above, the Company offers a competitive package of retirement and other benefits as follows:
- Executive directors may choose to participate in the defined contribution pension scheme or to receive a cash allowance in lieu of pension. The cash payment or pension contribution is equal to 30% of annual gross salary. From 6 April 2011 contributions into the defined contribution pension scheme are restricted to £50,000 per annum. Any residual of the 30% pension benefit will be delivered as a cash allowance.
- Company car or cash allowance worth £19,200 per annum.
- Private medical insurance.
- Chauffeur services, where appropriate, to assist with their role.
Awards made to executive directors during the 2011 financial year
|Reward elements||Vittorio Colao||Andy Halford||Michel Combes||Stephen Pusey|
|Base salary||Vittorios base salary was increased from £975,000 to £1,065,000 in July 2010.||Andys base salary was increased from £674,100 to £700,000 in July 2010.||Michels base salary was increased from £740,000 to £770,000 in July 2010.||Stephens base salary was increased from £500,000 to £550,000 in July 2010.|
|Annual bonus||The target bonus was £1,065,000 and the maximum bonus was £2,130,000.||The target bonus was £700,000 and the maximum bonus was £1,400,000.||The target bonus was £770,000 and the maximum bonus was £1,540,000||The target bonus was £550,000 and the maximum bonus was £1,100,000.|
|Long-term incentive plan||In June 2010 the base award had a face value of 137.5% of base salary at target performance.||In June 2010 the base award had a face value of 110% of base salary at target performance.||In June 2010 the base award had a face value of 110% of base salary at target performance.||In June 2010 the base award had a face value of 110% of base salary at target performance.|
|Investment opportunity||Vittorio invested the maximum into the GLTI plan (731,796 shares) and therefore received a matching award with a face value of 100% of base salary at target.||Andy invested the maximum into the GLTI plan (506,910 shares) and therefore received a matching award with a face value of 100% of base salary at target.||Michel invested 53% of the maximum into the GLTI plan (275,960 shares) and therefore received a matching award with a face value of 53% of base salary at target.||Stephen invested 37% of the maximum into the GLTI plan (141,834 shares) and therefore received a matching award with a face value of 37% of base salary at target.|
Pay and performance for the 2012 financial year
The Remuneration Committee considers the remuneration increases for the different groups of employees across all of our local markets and other relevant factors when assessing the pay of the executive directors. During its regular review of total compensation in March 2011, the Remuneration Committee decided that due to an improvement in business performance, with a return to revenue growth, and continued focus on profit and strong cash flow, that modest salary increases for the executive directors would be appropriate. Individual increases will become effective from 1 July 2011 and are set out in the table in "Pay for the 2012 financial year". When determining these increases the Remuneration Committee took into account the general increases in each of the major markets. It should be noted that the average increase for the executive directors is 2.8% and for the whole of the Executive Committee it is 3% which is in line with increases in the rest of the Group based in the UK.
Details of the GSTIP
The short-term incentive plan rewards performance over the one year operating cycle. This plan consists of four performance measures, three of which are financial measures with the fourth being an assessment of our competitive performance including market share performance relative to our competitors measured by revenue and profit, as well as customer endorsement and satisfaction measured by net promoter score. Each performance measure has an individual weighting which is reviewed each year to ensure alignment with our strategy. In the table below we describe our achievement against each of the performance measures and the resulting total incentive payout level for the year ended 31 March 2011.
|Performance measure||Weighting||Below threshold||Between|
|Competitive performance assessment||30%||√|
|Total incentive payout level||124.2%|
Changes to the GSTIP in 2012
For the 2012 financial year the framework for our annual incentive plan will remain the same as in 2011. However, to emphasise our focus on profitable growth we have rebalanced the weightings for service revenue and profit so the two measures are equally weighted. As a result, the split of weightings for our performance measures for the 2012 financial year will be:
- Service revenue 25%;
- Profit (earnings before interest tax depreciation amortisation) 25%;
- Free cash flow 20%; and
- Competitive performance assessment 30%.
We believe these measures continue to support our strategy by capturing our underlying operational performance, and our performance as viewed by our customers and in relation to our competition.
Details of the GLTI
The first award under the current GLTI plan was made in July 2008 (2009 financial year) and will vest in July 2011. Details of how the plan works are included in the table in "The remuneration package". The extent to which awards vest depend on two performance conditions:
- underlying operational performance as measured by free cash flow; and
- relative TSR against a peer group median.
Free cash flow
The free cash flow performance is based on a three year cumulative adjusted free cash flow figure. The definition of adjusted free cash flow is reported free cash flow excluding:
- Verizon Wireless additional distributions;
- the impact of any mergers, acquisitions and disposals;
- certain material one-off tax settlements; and
- foreign exchange rate movements over the performance period.
The cumulative adjusted free cash flow target and range for awards in the 2012, 2011, 2010 and 2009 financial years are shown in the table below:
The target free cash flow level is set by reference to the Companys three year plan and market expectations. The Remuneration Committee considers the targets to be critical to the Companys long-term success and its ability to maximise shareholder value, and to be in line with the strategic goals of the Company. The Remuneration Committee also considers these targets to be sufficiently demanding with significant stretch where only outstanding performance will be rewarded with a maximum payout.
TSR out-performance of a peer group median
We have a limited number of appropriate peers and this makes the measurement of a relative ranking system volatile. As such, the out-performance of the median of a peer group is felt to be the most appropriate TSR measure. The peer group for the performance condition for the 2011, 2010 and 2009 financial years is:
- BT Group;
- Deutsche Telekom;
- France Telecom;
- Telecom Italia;
- Telefonica; and
- Emerging market composite (consists of the average TSR performance of Bharti, MTN and Turkcell).
The relative TSR position will determine the performance multiplier. This will be applied to the free cash flow vesting percentage. There will be no multiplier until TSR performance exceeds median. Above median the following table will apply to the 2012, 2011, 2010 and 2009 financial years (with linear interpolation between points):
of peer group
|Median||0.0% p.a.||No increase|
|65th percentile||4.5% p.a.||1.5 times|
|80th percentile (upper quintile)||9.0% p.a.||2.0 times|
The performance measure has been calibrated using standard techniques.
Combined vesting matrix
The combination of the two performance measures gives a combined vesting matrix as follows:
|Free cash flow measure||Up to median||65th||80th|
The combined vesting percentages are applied to the target number of shares granted.
Performance shares vesting in 2011
Adjusted free cash flow for the three year period ended on 31 March 2011 was £16.9 billion and the graph below shows our TSR performance against our peer group for the same period resulted in an outperformance of the median by 3.9%. Using the matrix above, this results in a payout of 30.6% of the maximum. These shares will vest in July 2011.
The free cash flow performance is approved by the Remuneration Committee. The performance assessment in respect of the TSR out-performance of a peer group median is undertaken by pwc.
2008 GLTI award: TSR performance (growth in the value of a hypothetical US$100 holding over the performance period, six month averaging)
Pay for the 2012 financial year
The information provided in the table below explains what the executive directors who were on the Board on 31 March 2011 will actually receive from base salary and awards made previously with performance conditions which ended on 31 March 2011 but that will vest in the 2012 financial year.
|Vittorio Colao||Andy Halford||Michel Combes||Stephen Pusey|
|Base salary effective from July 2011||£1,110,000||£700,000||£790,000||£575,000|
|GSTIP (Annual bonus)(1)|
|Target (100% of base salary at 31 March 2011)||£1,065,000||£700,000||£770,000||£550,000|
|Percentage of target achieved for the 2011 financial year||124.2%||124.2%||96.8%||124.2%|
|Actual bonus payout in June 2011||£1,322,730||£869,400||£745,052||£683,100|
|GLTI performance shares|
|GLTI performance base share awarded in July 2008||4,126,587||2,282,447||2,589,782||942,132|
|GLTI performance match share awarded in July 2008||3,001,154||2,074,952||736,919||500,844|
|Vesting percentage based on cumulative adjusted three year free cash flow and TSR out-performance||30.6%||30.6%||30.6%||30.6%|
|GLTI performance shares vesting in 2011||2,181,088||1,333,363||1,017,970||441,550|
- The executive directors GSTIP for the 2011 financial year is payable in June 2011 with actual payments detailed in the table above. Vittorio Colao, Andy Halford and Stephen Pusey were measured solely against Group performance, whilst Michel Combes was measured on both Group and Europe region performance.
Service contracts of executive directors
The Remuneration Committee has determined that after an initial term of up to two years duration executive directors contracts should thereafter have rolling terms and be terminable on no more than 12 months notice.
The table below summarises the key elements of their service contract:
|Notice period||12 months|
|Retirement date||Normal retirement date|
|Termination payment||Up to 12 months salary|
|Bonus paid up to termination day|
|Entitlements under incentive plans and benefits that are consistent with the terms of such plans|
|Remuneration||Salary, pension, and benefits|
|Company car or cash allowance|
|Participation in the GSTIP, GLTI and the employee share schemes|
|Non-competition||During employment and for 12 months thereafter|
|Contract dates||Date of service agreement||Length of Board service|
|Vittorio Colao||27 May 2008||2 years 10 months|
|Andy Halford||20 May 2005||5 years 10 months|
|Michel Combes||1 June 2009||1 year 10 months|
|Stephen Pusey||1 June 2009||1 year 10 months|
Additionally, all of the Companys share plans contain provisions relating to a change of control. Outstanding awards and options would normally vest and become exercisable on a change of control to the extent that any performance condition has been satisfied. The Remuneration Committee may also decide that the extent to which an award will vest will be further reduced pro-rata to reflect the acceleration of vesting.
Fees retained for external non-executive directorships
Executive directors may hold positions in other companies as non-executive directors. Michel Combes was the only executive director with such positions held at Assystem SA and ISS Group, and in accordance with Group policy he retained fees for the year of 50,223 from Assystem SA and DKK243,750 from ISS Group (£73,250 in total).
Cascade to senior management
The principles of the policy are cascaded, where appropriate, to the other members of the Executive Committee as set out below.
|Cascade of policy to Executive Committee 2011 financial year|
|Total remuneration and base salary
Methodology consistent with the executive directors.
The annual bonus is based on the same measures. For some individuals these are measured within a region rather than across the whole Group.
|Cascade of policy to Executive Committee 2011 financial year|
The long-term incentive is consistent with the executive directors including the opportunity to invest in the GLTI to receive matching awards. In addition, Executive Committee members have a share ownership requirement of two times base salary.
All-employee share plans
The executive directors are also eligible to participate in the all-employee plans.
|Summary of plans|
The Vodafone Group 2008 Sharesave Plan is a HM Revenue & Customs (HMRC) approved scheme open to all staff permanently employed by a Vodafone Company in the UK as of the eligibility date. Options under the plan are granted at up to a 20% discount to market value. Executive directors participation is included in the option table in "Share options".
|Share Incentive Plan
The Vodafone Share Incentive Plan is an HMRC approved plan open to all staff permanently employed by a Vodafone Company in the UK. Participants may contribute up to a maximum of £125 per month (or 5% of salary if less) which the trustee of the plan uses to buy shares on their behalf. An equivalent number of shares are purchased with contributions from the employing company. UK-based executive directors are eligible to participate.
All awards are made under plans that incorporate dilution limits as set out in the guidelines for share incentive schemes published by the Association of British Insurers. The current estimated dilution from subsisting awards, including executive and all-employee share awards, is approximately 3.4% of the Companys share capital at 31 March 2011 (3.1% at 31 March 2010).
A mixture of newly issued shares, treasury shares and shares purchased in the market by the employee benefit trust are used to satisfy share-based awards. This policy is kept under review.
The Share Incentive Plan and the co-investment into the GLTI plan include restrictions on the transfer of shares while the shares are subject to the plan. Where, under an employee share plan operated by the Company, participants are the beneficial owners of the shares but not the registered owner, the voting rights are normally exercised by the registered owner at the discretion of the participant.Back to top
The following chart is included in order to be compliant with the requirements of the large and medium sized companies and Groups (Accounts and Reports) Regulations 2008. Data was provided by FTSE and DataStream and shows performance of the Company relative to the FTSE 100 index over a five year period, of which we were a constituent throughout the year. It should be noted that the payout from the long-term incentive plan is based on the TSR performance shown in the 2008 GLTI award: TSR performance graph and not on the graph below.
Five year historical TSR performance growth in the value of a hypothetical £100 holding over five years. FTSE 100 comparison based on spot valuesBack to top
Audited information for executive directors
Remuneration for the year ended 31 March 2011
The remuneration of executive directors was as follows:
|Salary/fees||Incentive schemes(1)||Cash in lieu of pension||Benefits/other(2)||Total|
|Other executive directors|
- These figures are the cash payouts from the 2011 financial year Vodafone GSTIP and are in relation to the performance against targets in adjusted operating profit, service revenue, free cash flow and competitive performance for the financial year ended 31 March 2011.
- Includes amounts in respect of cost of living allowance, private healthcare and car allowance.
The aggregate remuneration we paid to our Executive Committee(1) for services for the year ended 31 March 2011 is set out below. The aggregate number of Executive Committee members at 31 March 2011 was six, a reduction of two compared to 31 March 2010.
|Salaries and fees||3,151||3,655|
|Cash in lieu of pension||456||164|
- Aggregate remuneration for the Executive Committee is in respect of those individuals who were members of the Executive Committee, other than the executive directors, during the year ended 31 March 2011 and reflects compensation paid from either 1 April 2010 or date of appointment to the Executive Committee, to 31 March 2011 or date of leaving, where applicable.
- Comprises the incentive scheme information for the Executive Committee members on an equivalent basis to that disclosed for directors in the table. Details of share incentives awarded to directors and other members of the Executive Committee are included in footnotes to Long-term incentives .
Vittorio Colao, Andy Halford, Michel Combes and Stephen Pusey take a cash allowance of 30% of base salary in lieu of pension contributions.
The Executive Committee, including the executive directors, are provided benefits in the event of death in service. They also have an entitlement under a long-term disability plan from which two-thirds of base salary, up to a maximum benefit determined by the insurer, would be provided until normal retirement date.
Pension benefits earned by the director in the year ended 31 March 2011 were:
benefit at 31
value at 31
value at 31
over year less
- Andy Halford took the opportunity to take early retirement from the pension scheme due to the closure of the scheme on 31 March 2010 (aged 51 years). In accordance with the scheme rules, his accrued pension at this date was reduced with an early retirement factor for four years to reflect the fact that his pension is being paid before age 55 and is therefore expected to be paid out for a longer period of time. In addition, Andy Halford exchanged part of his early retirement pension at 31 March 2010 for a tax-free cash lump sum of £118,660. The pension in payment at 31 March 2010 was £17,800 per year. This pension is due to increase on 1 April 2011 by 5%, in line with the scheme rules, to £18,700 per year. However, at 31 March 2011 the pension in payment remained at £17,800 per year as shown above. No member contributions are payable as Andy Halford is in receipt of his pension.
- The transfer value at 31 March 2011 has been calculated on the basis and methodology set by the trustees after taking actuarial advice. No director elected to pay additional voluntary contributions. The transfer value disclosed above does not represent a sum paid or payable to the individual director. Instead it represents a potential liability of the pension scheme.
- Inflation has been taken as the increase in the retail price index over the year to 30 September 2010.
In respect of the Executive Committee, the Group has made aggregate contributions of £508,600 (2010: £851,000) into defined contribution pension schemes.
Directors interests in the shares of the Company
Conditional awards of ordinary shares made to executive directors under the Vodafone Global Incentive Plan (GIP) for the relevant financial years are shown below. Long-term incentive shares that vested during the year ended 31 March 2011 are also shown below:
1 April 2010
or date of
during the 2011
31 March 2011(4)
|Total value (5)||Market
price at date
|2008 Base award||4,126,587||||||||4,126,587||7,283||129.95||Jul 2011|
|2008 Match award||3,001,154||||||||3,001,154||5,297||129.95||Jul 2011|
|2009 Base award||4,564,995||||||||4,564,995||8,057||117.20||Jun 2012|
|2009 Match award||1,817,866||||||||1,817,866||3,209||117.20||Jun 2012|
|2010 Base award||||4,097,873||||||4,097,873||7,233||142.94||Jun 2013|
|2010 Match award||||2,980,271||||||2,980,271||5,260||142.94||Jun 2013|
|2008 Base award||2,282,447||||||||2,282,447||4,029||129.95||Jul 2011|
|2008 Match award||2,074,952||||||||2,074,952||3,662||129.95||Jul 2011|
|2009 Base award||2,524,934||||||||2,524,934||4,457||117.20||Jun 2012|
|2009 Match award||1,676,756||||||||1,676,756||2,959||117.20||Jun 2012|
|2010 Base award||||2,154,750||||||2,154,750||3,803||142.94||Jun 2013|
|2010 Match award||||1,958,863||||||1,958,863||3,457||142.94||Jun 2013|
|2008 Base award||2,589,782||||||||2,589,782||4,571||129.95||Nov 2011|
|2008 Match award||736,919||||||||736,919||1,301||129.95||Nov 2011|
|2009 Base award||2,771,771||||||||2,771,771||4,892||117.20||Jun 2012|
|2009 Match award||533,854||||||||533,854||942||117.20||Jun 2012|
|2010 Base award||||2,370,225||||||2,370,225||4,183||142.94||Jun 2013|
|2010 Match award||||1,144,116||||||1,144,116||2,019||142.94||Jun 2013|
|2008 Base award||942,132||||||||942,132||1,663||129.95||Jul 2011|
|2008 Match award||500,844||||||||500,844||884||129.95||Jul 2011|
|2009 Base award||1,872,818||||||||1,872,818||3,306||117.20||Jun 2012|
|2009 Match award||510,879||||||||510,879||902||117.20||Jun 2012|
|2010 Base award||||1,693,018||||||1,693,018||2,988||142.94||Jun 2013|
|2010 Match award||||571,097||||||571,097||1,008||142.94||Jun 2013|
- The awards were granted during the year under the Vodafone Global Incentive Plan using an average of the closing share prices on each of the five working days prior to 28 June 2010 being 142.9 pence. These awards have a performance period running from 1 April 2010 to 31 March 2013. The performance conditions are a matrix of free cash flow performance and relative TSR. The vesting date will be in June 2013.
- Shares granted on 24 July 2007 vested on 24 July 2010. The performance condition on these awards was a relative TSR measure against the companies making up the FTSE Global Telecoms index at the start of the performance period. The threshold relative TSR performance target was met and as such shares vested at 25%. The share price on the vesting date was 151.5 pence.
- The share vesting gave rise to cash payments equal to the equivalent value of dividends over the vesting period. These cash payments equated to £91,484 for Vittorio Colao, £70,198 for Andy Halford and £28,976 for Stephen Pusey.
- The total interest at 31 March 2011 includes awards over three different performance periods ending on 31 March 2011, 31 March 2012 and 31 March 2013. The performance conditions for the award vesting in July 2011 are a matrix of free cash flow performance and relative TSR.
- The total value is calculated using the closing mid-market share price at 31 March 2011 of 176.5 pence.
The aggregate number of shares conditionally awarded during the year to the Executive Committee, other than the executive directors, was 9,276,317 shares. The performance and vesting conditions on the shares awarded in the year are based on a matrix of free cash flow performance and relative TSR.
No options have been granted to directors during the year. The following information summarises the directors options under the Vodafone Group 2008 Sharesave Plan (SAYE), the Vodafone Group 1998 Company Share Option Scheme (CSOS), the Vodafone Group Plc 1999 Long-Term Stock Incentive Plan (LTSIP) and the GIP. HMRC approved awards may be made under all of the schemes mentioned. The table also summarises the directors options under the Vodafone Group 1998 Executive Share Option Scheme (ESOS) which is not HMRC approved. No other directors have options under any of these schemes.
In the past, options under the Vodafone Group 1998 Sharesave Scheme were granted at a discount of 20% to the market value of the shares and options under the Vodafone Group 2008 Sharesave Plan were also granted at a discount of 20% to the market value of the shares at the time of the grant. No other options may be granted at a discount.
1 April 2010
or date of
31 March 2011
|Number of shares
||Number of shares
||Number of shares
||Number of shares
||Number of shares
|GIP||Nov 2006||3,472,975||||||||3,472,975||135.50||Nov 2009||Nov 2016|||
|GIP(2)||Jul 2007||3,003,575||||||||3,003,575||167.80||Jul 2010||Jul 2017|||
|SAYE||Jul 2009||16,568||||||||16,568||93.85||Sep 2014||Feb 2015|||
|CSOS||Jul 2000||200||||||(200)||||282.30||Jul 2003||Jul 2010|||
|ESOS||Jul 2000||66,700||||||(66,700)||||282.30||Jul 2003||Jul 2010|||
|LTSIP||Jul 2001||152,400||||||||152,400||151.56||Jul 2004||Jul 2011|||
|LTSIP||Jul 2005||1,291,326||||||||1,291,326||145.25||Jul 2008||Jul 2015|||
|GIP(2)||Jul 2007||2,295,589||||||||2,295,589||167.80||Jul 2010||Jul 2017|||
|SAYE||Jul 2009||9,669||||||||9,669||93.85||Sep 2012||Feb 2013|||
|GIP||Sep 2006||1,034,259||||||||1,034,259||113.75||Sep 2009||Sep 2016|||
|GIP(2)||Jul 2007||947,556||||||||947,556||167.80||Jul 2010||Jul 2017|||
|SAYE||Jul 2009||9,669||||||||9,669||93.85||Sep 2012||Feb 2013|||
|SAYE||Jul 2009||9,669||||||||9,669||93.85||Sep 2012||Feb 2013|||
- The closing mid-market share price on 31 March 2011 was 176.5 pence. The highest mid-market share price during the year was 185.0 pence and the lowest price was 126.5 pence.
- The performance condition on these options is a three year cumulative growth in adjusted earnings per share. The options vested at 100% on 24 July 2010.
Non-executive directors remuneration
The remuneration of non-executive directors is reviewed annually by the Chairman following consultation with the Remuneration Committee Chairman. Our policy is to pay competitively for the role including consideration of the time commitment required. In this regard, the fees are benchmarked against a comparator group of the FTSE 15 companies. Following the 2011 review there will be no increase to the fees of non-executive directors. However, there is an increase to the Deputy Chairman and Chairmanship of the Remuneration Committee fees from 1 April 2011.
|Fee payable (£000s)|
1 April 2011
1 April 2010
|Chairmanship of Audit Committee||25||25|
|Chairmanship of Remuneration Committee||25||20|
- The Chairmans fee also includes the fee for the Chairmanship of the Nominations and Governance Committee.
In addition, an allowance of £6,000 is payable each time a non-Europe based non-executive director is required to travel to attend Board and committee meetings to reflect the additional time commitment involved.
Details of each non-executive directors remuneration for the 2011 financial year are included in the table below.
Non-executive directors do not participate in any incentive or benefit plans. The Company does not provide any contribution to their pension arrangements. The Chairman is entitled to use of a car and a driver whenever and wherever he is providing his services to or representing the Company.
Chairman and non-executive directors service contracts
The Chairman, Sir John Bond, has a contract that may be terminated by either party on 12 months notice. The date of his letter of appointment is 5 December 2005. Sir John Bond will be standing down from his role as Chairman and Chairman of the Nominations and Governance Committee and will not stand for re-election at the AGM on 26 July 2011. Subject to his election by shareholders, Gerard Kleisterlee will become Chairman in succession to Sir John Bond.
Non-executive directors, including the Deputy Chairman, are engaged on letters of appointment that set out their duties and responsibilities. The appointment of non-executive directors may be terminated without compensation. Non-executive directors are generally not expected to serve for a period exceeding nine years.
The terms and conditions of appointment of non-executive directors are available for inspection at the Companys registered office during normal business hours and at the AGM (for 15 minutes prior to the meeting and during the meeting).
letter of appointment
|John Buchanan||28 April 2003||AGM 2011|
|Renee James||1 January 2011||AGM 2011|
|Alan Jebson||7 November 2006||AGM 2011|
|Samuel Jonah||9 March 2009||AGM 2011|
|Gerard Kleisterlee||1 April 2011||AGM 2011|
|Nick Land||7 November 2006||AGM 2011|
|Anne Lauvergeon||20 September 2005||AGM 2011|
|Luc Vandevelde||24 June 2003||AGM 2011|
|Anthony Watson||6 February 2006||AGM 2011|
|Philip Yea||14 July 2005||AGM 2011|
Audited information for non-executive directors serving during the year
ended 31 March 2011:
|Sir John Bond||600||575||3||3||603||578|
|Simon Murray (retired 26 July 2010)||38||110||||||38||110|
- Salary/fees includes travel allowances.
The beneficial interests of directors and their connected persons in the ordinary shares of the Company, which includes interests in the Vodafone Share Incentive Plan, but which excludes interests in the Vodafone Group share option schemes, and the Vodafone Group short-term or long-term incentives, are shown below:
|16 May 2011||31 March 2011||1 April 2010 or
date of appointment
|Sir John Bond||370,677||370,677||357,584|
|Simon Murray (retired 27 July 2010)||||||246,250|
- Non-executive directors appointed to the Board as follows: Renee James 1 January 2011, Gerard Kleisterlee 1 April 2011.
At 31 March 2011 and during the period from 1 April 2011 to 16 May 2011, no director had any interest in the shares of any subsidiary company. Other than those individuals included in the table above who were Board members at 31 March 2011, members of the Groups Executive Committee at 31 March 2011 had an aggregate beneficial interest in 2,755,152 ordinary shares of the Company. At 16 May 2011 the directors had an aggregate beneficial interest in 6,968,705 ordinary shares of the Company and the Executive Committee members had an aggregate beneficial interest in 2,755,736 ordinary shares of the Company. None of the directors or the Executive Committee members had an individual beneficial interest amounting to greater than 1% of the Companys ordinary shares.
Interests in share options of the Company
At 16 May 2011 there had been no change to the directors interests in share options from 31 March 2011 (see "Share options").
Other than those individuals included in the table above, at 16 May 2011, members of the Groups Executive Committee held options for 2,620,271 ordinary shares at prices ranging from 115.3 pence to 167.8 pence per ordinary share, with a weighted average exercise price of 161.9 pence per ordinary share exercisable at dates ranging from July 2008 to July 2017.
Sir John Bond, John Buchanan, Alan Jebson, Renee James, Samuel Jonah, Gerard Kleisterlee, Nick Land, Anne Lauvergeon, Luc Vandevelde, Anthony Watson and Philip Yea held no options at 16 May 2011.
Directors interests in contracts
None of the current directors had a material interest in any contract of significance to which the Company or any of its subsidiaries was a party during the financial year.
On behalf of the Board