Remuneration report (page 4)

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Five-year share price performance 2000-2004

Under the requirements of the Directors’ Remuneration Report Regulations 2002, the Company is required to include a graph showing the Company’s performance compared to an appropriate index. Set out below, the graph illustrates the Company’s annual total shareholder return (share price growth

plus dividends that have been declared, paid and reinvested in the Company’s shares) relative to the FTSE Engineering and Machinery Index for the five year period 2000-2004, assuming an initial investment of £100. The Engineering and Machinery Index is the broad market index that includes the Company and comprises comparable companies.

Five-year historical total shareholder return performance. Growth in the value of a hypothetical £100 holding over five years.

The following information has been audited.

Directors’ emoluments and compensation

For her non-executive duties as Chairman, Alison Carnwath received a fee at the rate of £78,000 per annum. Michael Harper, who assumed the Chair on 1 November 2004, following the stepping down by Alison Carnwath, is paid a fee at the rate of £85,000 per annum. From his appointment on 14 June 2004 until his appointment as Chairman he was paid a fee at the rate of £30,000 per annum. On 1 July 2004, the fee payable to the other non-executive directors was increased from £25,000 per annum to £27,500 per annum. The previous increase, from £20,000 per annum to £25,000 per annum, was on 1 April 2002. The chairmen of the Remuneration Committee and of the Audit Committee, David Bell and Nigel Moore respectively, each receive an additional fee for their services as chairmen of those Committees. David Bell receives an additional £2,500 per annum and Nigel Moore receives £5,000 per annum. A one-off fee of £2,000 was paid to Will Wyatt in view of the additional work in respect of the selection and appointment process of the two new non-executive directors he had undertaken during the year as Chairman of the Nominations Committee. No additional fee is paid to David Bell for his duties as Senior Independent Director. The non-executive directors do not receive any other benefits from the Company.

Gareth Rhys Williams, Chief Executive, currently receives an annual salary of £285,000, increased from £267,800 with effect from 1 January 2005. Mr Rhys Williams is a member of the Vitec Group Executive Pension Scheme and contributes 9% (increased from 7%) of his salary on the amount of the earnings cap. That pension scheme is a defined benefit scheme, the accrual rate for which is one fortieth of his pensionable salary for each year of pensionable service. In accordance with his service contract, the Company makes contributions of 24% of his annual salary in excess of the earnings cap to his funded unapproved retirement benefits scheme.

In addition, a guaranteed pension-related bonus of 16% of his annual salary in excess of the earnings cap is paid to him. He is eligible for a performance-related bonus, based on Company performance and, if or when determined by the Remuneration Committee, individual performance, of up to 100% of base salary each year. In respect of 2004, all of his bonus was calculated upon the Group’s financial performance. Mr Rhys Williams received a bonus of £120,510 in respect of 2004 and of £52,000 for 2003.

Alastair Hewgill, Finance Director, currently receives an annual salary of £190,000, increased from £180,000 with effect from 1 January 2005. Mr Hewgill is a member of the Vitec Group

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Information correct at 13/04/05