| Remuneration Composition | Economic Value (EV)(a) | Conditionality | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Peter Clarke (USD '000) | Kevin Hayes (USD '000) | |||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||
| Base salary(d) | 925 | 920 | 625 | 620 | Fixed and variable cash paid for the year | |||||||
| Performance bonus in cash | 750 | – | 250 | – | ||||||||
| Performance bonus with voluntary deferral for PSP match | n/a | 6,000 | n/a | 3,000 | ||||||||
| Performance bonus with mandatory deferral for PSP match | 1,000 | n/a | 850 | n/a | Variable pay subject to three year mandatory deferral | |||||||
| Sub total remuneration not subject to conditionality | 2,675 | 6,920 | 1,725 | 3,620 | ||||||||
| Restricted 10 year options at 10% premium(c) | 3,000 | n/a | 750 | n/a | Variable pay subject to conditionality - three year service condition | |||||||
| Long-Term Incentive Plans awarded by the Remuneration Committee(a) | Performance Share Plan (PSP) match | 720 | 2,880 | 612 | 1,440 | Variable pay subject to conditionality - service condition (four years for PSP; three years for ESOS) and three year performance conditions | ||||||
| PSP basic | 666 | 444 | 450 | 300 | ||||||||
| Executive Share Option Scheme (ESOS) | 592 | 259 | 400 | 175 | ||||||||
| Total potential economic value of remuneration including conditional remuneration(a)(b) | 7,653 | 10,503 | 3,937 | 5,535 | ||||||||
Note:
(a) A significant proportion of this total is subject to meeting performance and/or service conditions as summarised in the last column of the table and which may, or may not, be met. The actual amount of remuneration awarded this year which is eventually received is subject to these conditions. In respect of 2009 remuneration which is subject to performance conditions, based on subsequent performance, is likely to have a significantly reduced value. The economic value of performance-based share grants is the face value at the time of grant, multiplied by a performance factor to represent the expected vesting of awards. A binomial lattice valuation factor has been applied to the expected value of grants to estimate the economic value - taking account of share price volatility and dividend yield. The information provided in the 2009 Annual Report for share plans was the face value and did not take account of the impact of the performance conditions, share price volatility and dividend yield.
(b) Pension and Benefits are not in the above figures but are set out here.
(c) Restricted options have an exercise price 10% above the market price at grant (premium priced) with a three year service condition and exercisable between the third and tenth anniversary after grant.
(d) Base salary has been frozen at USD 925,000 for Peter Clarke and USD 625,000 for Kevin Hayes for the two years since 1 June 2008; the 2009 figure is for the year from 1 April 2008 to 31 March 2009.
Share ownership requirements
A shareholding requirement was introduced in May 2010 for executive directors. The Chief Executive is required to maintain a shareholding of 200% of base salary. The Finance Director is required to maintain a shareholding of 100% of base salary. Vested PSP and ESOS can be taken into account in applying this test but unvested awards are not eligible for inclusion. Executive directors are required to build up this shareholding on joining the Board or after a reduction in share price as share and option plan awards vest. The executive directors meet these requirements. Non-executive directors are encouraged to build a shareholding. The shareholdings of directors are set out here.
Man Group has always sought to facilitate significant share ownership by directors and senior management, principally through plans which encourage and assist the purchase of shares with their own funds or by way of bonus deferral. The Board and employees worldwide together currently own an estimated 3.6% of the Company's share capital, either directly or through employee trusts established and funded for this purpose. The Board alone directly holds 0.5% (similar to last year) of the issued capital. The Employee Trusts are included in the Group's consolidated financial statements.
