| Information not subject to audit
Remuneration committee and advisers
The remuneration committee, comprising two non-executive Directors, Barrie Clark and Peter Magowan, as well as Steven Fink, appointed by the Board, recommends, within agreed terms of reference, an overall remuneration package for the executive Directors. The remuneration committee has appointed Towers Perrin, a leading firm of independent executive remuneration consultants, to assess comparability to the market place.
Remuneration policy
The Company’s policy on Directors’ remuneration is that the overall remuneration package should be sufficiently competitive to attract, retain and motivate high quality executives capable of achieving the Group’s objectives and thereby enhancing shareholder value.
The package consists of basic salary, benefits, share options, performance related bonuses and pension contributions, with a significant proportion based on performance and dependent upon the achievement of demanding targets.
A summary of each element of the remuneration package is set out below:
Basic salary and benefits
Basic salary and fees are determined after taking account of each Director’s responsibilities and seniority, and of market salary levels for similar jobs in comparable companies based on independent surveys. The committee also takes independent specialist advice from Towers Perrin in relation to salaries, bonuses and longer-term incentives. Basic salaries are reviewed annually taking account of both Group and individual performance. The emoluments of the two executive Directors was increased during the year in line with the market level for their increased responsibilities. Future salary increases will reflect changes in the market level and average increases for executives within the Group.
Benefits (normally car, pension and life, disability and health insurance) are set at a level comparable with those granted to executives at a similar level in peer companies.
The fees for non-executive Directors are determined by the Board and are reviewed periodically. By agreement, only one of the three non-executive nominees of ET Training LLC and the Chairman receive fees in respect of their services.
Bonuses
Directors' bonuses are based on Group and individual performance and are discretionary. They are structured to enable the executives to increase their basic earnings by up to 75% on the achievement of predetermined performance related targets set for the development of the Group. The committee believes that exceptional performance deserves appropriate reward.
Share options
The Company has a number of approved and unapproved executive share option schemes, the details of which are provided in Interest in Options and in notes 16 and 17 to the accounts.
Annual grants under the schemes are subject to limits linked to relevant emoluments and contractual obligations, with a cap of £30,000 market value on options granted under approved schemes. Unapproved option grants are discretionary and require the approval of the remuneration committee. Options cannot be exercised for a period of between three to five years from the date of the grant, except under certain limited circumstances. Performance criteria are detailed here and in notes 16 and 17 to the accounts. Options are only exercisable where demonstrable enhancement in shareholder value has been achieved through increases in the Spring share price. The remuneration committee assesses the performance criteria periodically, taking into account market conditions and Group performance.
Directors are eligible to join the savings related share option schemes on the same terms as other employees. Options under savings related share option schemes are granted at a discount of 20% to the market price of shares at the date of invitation, in line with all other employees.
Terms of appointment and service contracts
The details below reflect the Company’s general policy in respect
of service contracts for Directors.
Non-executive Directors
Two of the non-executive Directors, B A Clark and P A Magowan, have fixed term consultancy agreements which expired on 28 August 2000 and are accordingly now being treated by the Company and the Directors as if they were on rolling notice contracts. These contracts can be terminated by 12 months notice by the Company and 3 months notice by the non-executive.
The other non-executive Directors and the Chairman, being Knowledge Universe nominees, have no service contracts and are not entitled to a defined notice period. S B Fink and R T Barfield retire by rotation and B A Clark retires annually and are seeking re-election at the Annual General Meeting to be held on 2 June 2005.
Executive Directors
R T Barfield and W J Grubbs have service contracts that allow for 12 months notice from the Company and the executive.
On termination of these agreements, except for reasons meriting summary dismissal, the Directors are entitled to a payment equivalent to their salary and benefits for the unexpired term less tax and national insurance.
Performance graph
The graph below shows the percentage change in the total shareholder return (with dividends reinvested) for each of the last five financial years of a holding of the Company's shares against the corresponding change in a hypothetical holding of shares in the FTSE support services sector. This sector was chosen as it represents a broad equity market index in which the company is a constituent member.
Information subject to audit
The remuneration of the individual Directors was as follows:
|
