Hospital Universitario “Virgen de la Arrixaca” Murcia.
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LTIP and DAB matching awards were granted as nil cost options. LTIP Awards were awarded as a percentage of salary. DAB matching awards were granted at a maximum ratio of 2:1 to the annual bonus deferred by Directors in relation to the 2013 financial year. No further matching awards will be made. LTIP Awards are subject to EPS and ROCE performance over the three-year period
to 31 December 2016 with LTIP awards also subject to a share price underpin. 25% of LTIP Awards vest for achieving threshold performance. DAB matching awards are subject to an EPS performance condition over the three-year period to 31 December 2016 with 33% vesting for achieving threshold performance. Full details of the performance conditions relating to these awards are outlined on
page 106.
Long Term Incentive Awards awarded in 2014 (Audited)
Name of Director LTIP award Face value of
LTIP award1 DAB matching award Face value of DAB award2
Andy Parker 131,579 1,500,001 56,130 649,985
Gordon Hurst 83,333 949,996 50,086 579,996
Maggi Bell 74,561 849,995 41,450 479,991
Vic Gysin 74,561 849,995 67,356 779,982
Dawn Marriott-Sims 65,789 749,995 17,270 199,987
1 The price on grant was £11.40. 2 The price on grant was £11.58.
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Directors’ remuneration report continued
Annual bonus for 2014
The maximum annual bonus for the Executive Directors that could be earned in relation to 2014 performance was 200% of salary (unchanged from 2013).
The annual bonus that could be paid to Executive Directors in respect of 2014 performance was determined by a range of underlying profit before tax targets, subject to a Remuneration Committee review of non-underlying items within the accounts. 50% of the bonus was payable for achieving target performance with 100% payable for achieving the maximum target. No bonus would be paid for below target performance.
A maximum bonus for 2014 was earned as illustrated below. Before awarding this bonus, the Remuneration Committee gave due consideration to the non-underlying items within the accounts and determined that no adjustment was required to the bonus outturn. With the exception of Gordon Hurst, who is retiring and whose bonus will be paid wholly in cash, half of the bonus earned will be paid in cash in 2015 and the other half will be deferred into shares for three years under the DAB.
Performance measure Proportion of bonus determined by measure
Maximum target
for 2014 performance Actual 2014 % of maximum payable Underlying profit
before tax 100% £528m1 £535.7m 100%
For reference, the 2013 reported underlying profit before tax was £475m.
Share Plan Awards
LTIP and DAB matching awards were granted as nil cost options. LTIP Awards were awarded as a percentage of salary. DAB matching awards were granted at a maximum ratio of 2:1 to the annual bonus deferred by Directors in relation to the 2013 financial year. No further matching awards will be made. LTIP Awards are subject to EPS and ROCE performance over the three-year period
to 31 December 2016 with LTIP awards also subject to a share price underpin. 25% of LTIP Awards vest for achieving threshold performance. DAB matching awards are subject to an EPS performance condition over the three-year period to 31 December 2016 with 33% vesting for achieving threshold performance. Full details of the performance conditions relating to these awards are outlined on page 106.
Long Term Incentive Awards awarded in 2014 (Audited)
Name of Director LTIP award Face value of
LTIP award1 DAB matching award Face value of DAB award2
Andy Parker 131,579 1,500,001 56,130 649,985
Gordon Hurst 83,333 949,996 50,086 579,996
Maggi Bell 74,561 849,995 41,450 479,991
Vic Gysin 74,561 849,995 67,356 779,982
Dawn Marriott-Sims 65,789 749,995 17,270 199,987
1 The price on grant was £11.40. 2 The price on grant was £11.58.
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Directors Interests and Shareholding Guidelines (Audited)
Executive Directors are asked to hold 100% of salary in shares in the Company. This is built up over a period of five years from appointment.
The guidelines include shares held beneficially and also shares within the DAB that have been deferred over the three-year period. Share awards that are subject to performance conditions are not included.
Director Beneficially held interests at 31 December 2014 Beneficially held interests at 31 December 2013 Interests in share incentive schemes, awarded without performance conditions at 31 December 2014 Interests in share incentive schemes, awarded without performance conditions at 31 December 2013 Interests in share incentive schemes, awarded subject to performance conditions at 31 December 2014 Interests in share incentive schemes, awarded subject to performance conditions at 31 December 2013 Interests in share option schemes where performance conditions have been met but not exercised at 31 December 2014 Interests in share option schemes where performance conditions have been met but not exercised at 31 December 2013 Percentage of shareholding target requirement at 31 December 2014 or date of retirement3 Martin Bolland 63,000 55,000 – – – – – – – Andy Parker 13,392 – 55,994 46,452 483,567 403,642 – – 100% Gordon Hurst 25,358 25,158 59,044 61,767 441,421 468,217 – – 100% Maggi Bell 73,542 73,542 48,654 49,864 411,869 448,760 – – 100% Vic Gysin – – 89,537 74,382 493,635 459,502 – – 100% Dawn Marriott-Sims1 411 227 19,563 11,155 184,915 141,856 – – 72% Gillian Sheldon 1,000 – – – – – – – – Paul Bowtell 1,000 – – – – – – – – Carolyn Fairbairn2 – – – – – – – – – Martina King 717 717 – – – – – – – Paul Pindar* 856,613 856,613 46,144 82,703 742,087 1,054,213 – – 100% 1 Appointed 1 January 2014. 2 Appointed 13 May 2014.
3 Based on salary from 1 January 2015.
* Paul Pindar retired on 28 February 2014 and details of his share options were fully disclosed in the report for the period to 31 December 2013. The figures shown are as at his retirement date.
Between the end of the financial year and 27 February 2015, Gordon Hurst and Dawn Marriott-Sims acquired 33 and 30 shares under the Capita Share Ownership Plan, increasing their beneficial interest in ordinary shares of the Company to 25,391 and 441 respectively. Capita plc 104
Unvested DAB matching awards at 31 December 2014
2012 award 2013 award 2014 award Total
Andy Parker No award made 55,858 56,130 111,988
Gordon Hurst No award made 68,002 50,086 118,088
Maggi Bell No award made 55,585 41,450 97,308
Vic Gysin No award made 111,718 67,356 179,074
Dawn Marriott-Sims – 21,856 17,270 39,126
Unvested DAB deferred awards at 31 December 2014
2012 award 2013 award 2014 award Total
Andy Parker No award made 27,929 28,065 55,994
Gordon Hurst No award made 34,001 25,043 59,044
Maggi Bell No award made 27,929 20,725 48,654
Vic Gysin No award made 55,859 33,678 89,537
Dawn Marriott-Sims – 10,928 8,635 19,563
Performance criteria for matching awards
EPS growth of RPI + 4% per annum – 33% of the award vests. EPS growth of RPI +12% per annum – 100% of award vests. Straight-line vesting occurs between these points.
Share plans (Audited)
Plan name: Deferred Annual Bonus (DAB) plan
The DAB is split into two elements: Deferred award – this is the deferred element of an individual’s bonus. Any deferral is made on a gross basis into Deferred Shares or as a net restricted share award. The Deferred Shares are held for a period of three years from the date of award. This part is not subject to performance conditions.
Matching award – this is awarded at a ratio of two shares for each gross share awarded under the deferred award. Matching awards vest after a three-year holding period to the extent to which performance criteria have been met.
It is not planned to award any further matching awards under this plan going forward.
Unvested LTIP awards at 31 December 2014
2012 award 2013 award 2014 award Total
Andy Parker 120,000 120,000 131,579 371,579 Gordon Hurst 120,000 120,000 83,333 323,333 Maggi Bell 120,000 120,000 74,561 314,561 Vic Gysin 120,000 120,000 74,561 314,561 Dawn Marriott-Sims 40,000 40,000 65,789 145,789 Performance criteria 2012 and 2013
EPS growth of RPI + 4% per annum – 20% of the award vests. EPS growth of RPI +12% per annum – 100% of the award vests. Straight-line vesting occurs between these points.
2014
EPS: 18.75% vests for 6% per annum. EPS growth increasing to 75% vesting for 12% per annum EPS growth.
ROCE: 6.25% vests for average ROCE of 14% increasing to 25% vesting for average ROCE of 16%.
For all LTIP awards, Capita’s average share price at vesting must not be below the average share price at the date of grant.
Plan name: Long Term Incentive Plan (2008 LTIP)
At the Annual General Meeting in 2008, the Long Term Incentive Plan (LTIP) was approved by shareholders. Under the plan rules the Committee can award up to the higher of three times salary or 165,000 shares.
The vesting of awards will depend on performance measured over a three-year period.
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Directors’ remuneration report continued
Unvested DAB matching awards at 31 December 2014
2012 award 2013 award 2014 award Total
Andy Parker No award made 55,858 56,130 111,988
Gordon Hurst No award made 68,002 50,086 118,088
Maggi Bell No award made 55,585 41,450 97,308
Vic Gysin No award made 111,718 67,356 179,074
Dawn Marriott-Sims – 21,856 17,270 39,126
Unvested DAB deferred awards at 31 December 2014
2012 award 2013 award 2014 award Total
Andy Parker No award made 27,929 28,065 55,994
Gordon Hurst No award made 34,001 25,043 59,044
Maggi Bell No award made 27,929 20,725 48,654
Vic Gysin No award made 55,859 33,678 89,537
Dawn Marriott-Sims – 10,928 8,635 19,563
Performance criteria for matching awards
EPS growth of RPI + 4% per annum – 33% of the award vests. EPS growth of RPI +12% per annum – 100% of award vests. Straight-line vesting occurs between these points.
Share plans (Audited)
Plan name: Deferred Annual Bonus (DAB) plan
The DAB is split into two elements: Deferred award – this is the deferred element of an individual’s bonus. Any deferral is made on a gross basis into Deferred Shares or as a net restricted share award. The Deferred Shares are held for a period of three years from the date of award. This part is not subject to performance conditions.
Matching award – this is awarded at a ratio of two shares for each gross share awarded under the deferred award. Matching awards vest after a three-year holding period to the extent to which performance criteria have been met.
It is not planned to award any further matching awards under this plan going forward.
Unvested LTIP awards at 31 December 2014
2012 award 2013 award 2014 award Total
Andy Parker 120,000 120,000 131,579 371,579 Gordon Hurst 120,000 120,000 83,333 323,333 Maggi Bell 120,000 120,000 74,561 314,561 Vic Gysin 120,000 120,000 74,561 314,561 Dawn Marriott-Sims 40,000 40,000 65,789 145,789 Performance criteria 2012 and 2013
EPS growth of RPI + 4% per annum – 20% of the award vests. EPS growth of RPI +12% per annum – 100% of the award vests. Straight-line vesting occurs between these points.
2014
EPS: 18.75% vests for 6% per annum. EPS growth increasing to 75% vesting for 12% per annum EPS growth.
ROCE: 6.25% vests for average ROCE of 14% increasing to 25% vesting for average ROCE of 16%.
For all LTIP awards, Capita’s average share price at vesting must not be below the average share price at the date of grant.
Plan name: Long Term Incentive Plan (2008 LTIP)
At the Annual General Meeting in 2008, the Long Term Incentive Plan (LTIP) was approved by shareholders. Under the plan rules the Committee can award up to the higher of three times salary or 165,000 shares.
The vesting of awards will depend on performance measured over a three-year period.
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Executive Directors’ service agreements Details of the service agreements are set out below:
Executive Directors Date of contract Notice period
Andy Parker 10 January 2011 12 months
Nick Greatorex 1 January 2015 12 months
Gordon Hurst 17 December 2007 12 months
Maggi Bell 1 August 2008 12 months
Vic Gysin 10 January 2011 12 months
Dawn Marriott-Sims 1 January 2014 12 months
Non-Executive Directors’ terms of engagement
In 2014, all Non-Executive Directors were considered to be independent of the Company.
Non-Executive Directors Date of joining the Board Expiry date of current three year appointment
Martin Bolland 1 March 2008 Not applicable
Gillian Sheldon 1 September 2012 31 August 2015
Paul Bowtell 28 June 2010 27 June 2016
Carolyn Fairbairn 12 May 2014 11 May 2017
Andrew Williams 1 January 2015 31 December 2017
Payments to former directors (Audited)
No payments (other than regular pension benefits and legacy share plan maturities which were commenced in previous years) were made during the year ended 31 December 2014 to any past Director of the Company.
Payments for loss of office (Audited)
No payments were made in respect of loss of office to Directors during the year ended 31 December 2014.
Percentage change in remuneration levels
The table below shows change in base compensation, benefits and annual bonus for the CEO in the 2014 financial year, compared to that for the average employees:
Chief Executive Officer All employees To 31 December 2014
£ 2014 v 2013% change 2014 v 2013% change
Base compensation 500,000 28.2% 3.6%
Benefits 16,788 2.8% 6.2%
Bonus 1,000,000 70.9% 9.3%
This all employee information has been taken using only the UK employees as it was felt that using our overseas payroll would distort the information. The CEO base compensation relates to Paul Pindar and 2014 relates to Andy Parker following his remuneration review.
As outlined in last year’s remuneration report, base salaries of Executive Directors were in increased in 2014 as part of a broader restructuring of their pay arrangements which also involved a reduction in their maximum potential total pay.
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Value of investment of £100 on 1 January 2005