Directors’ Remuneration
Information contained in sections and figures markedß have been audited.
The Remuneration Committee understands that the Group’s UK shareholders would like all aspects of the executive directors’ remuneration packages to be wholly compliant with what is considered to be best practice in UK companies. However, the Remuneration Committee also recognises that the Company must remain adequately competitive in the US where more than 70% of sales and profits are derived and where failure to do so would lead to the loss of some of the Group’s most valuable US and Group executives, and inevitably damage the long term interests of the business and its shareholders. The Group, therefore, faces some unusual remuneration challenges in trying to meet the expectations of UK shareholders and still remain reasonably competitive in the US and the Remuneration Committee endeavours to find the appropriate balance between those differing factors.
Directors’ emolumentsß
(1) Benefits incorporate all benefits arising from employment by the Group, which in the main relate to the provision of a company car and private health insurance.
(2) Malcolm Williamson was appointed as Chairman on 9 June 2006, with fees of £200,000 per annum. Prior to his appointment as Chairman he was appointed as a non-executive director on 28 November 2005 with fees of £46,000 per annum.
(3) James McAdam retired as a director on 9 June 2006. Prior to his retirement, his basic salary was £350,000 per annum. On his retirement from the Company, Mr. McAdam remains a member of the Signet Health Care Scheme but he fully reimburses the Company the premium paid on his behalf.
(4) Emoluments in 2006 are from his appointment as a director on 6 April 2005.
(5) Messrs. Burman and Light have their emoluments specified and paid in US dollars and an average exchange rate of US$1.88 was used (2005/06:US$1.80).
(6) Appointed as a director on 12 January 2006.
The figures above represent emoluments earned as directors during the relevant financial year. Such emoluments are paid in the same financial year with the exception of bonus payments, which are paid in the year following that in which they are earned.
(a) Salary and benefits
The Group Chief Executive, the highest paid director, and the Chief Executive of the US division are US citizens residing in the US, and their remuneration packages are determined on that basis and are set in US dollars and not pounds sterling.
Details of the salaries received by executive directors are shown above.
The Remuneration Committee normally reviews the salary and benefits of executive directors annually. However following extensive consultation with major shareholders on the effect of the removal of the retesting provisions of share option awards and the resulting need to discount their expected value, modest base salary increases were made and target bonus levels adjusted during the year. These base salary increases were as follows: that of the Group Chief Executive from $1,435,000 to $1,477,000, and that of the Group Finance Director from £385,000 to £395,000 and the Chief Executive of the US division from $700,000 to $712,000. No increase was made to the base salary of the Chief Executive of the UK division.
Following the normal 2007 annual reviews the Remuneration Committee increased the Group Chief Executive’s basic salary from $1,477,000 to $1,575,000, that of the Group Finance Director from £395,000 to £425,000 and that of the Chief Executive of the UK division from £310,000 to £330,000. The basic salary of the Chief Executive of the US division was increased from $712,000, to $800,000. The increase in base salary for the Chief Executive of the US division reflects the fact that he did not receive an increase during the normal annual review process in 2006 as his remuneration had been reviewed during 2005 at the time of his promotion from Chief Operating Officer to Chief Executive officer of the US division. The Remuneration Committee considers that this level of increase is justified in the circumstances as it reflects that he has now been in the role over a year, his performance, and the necessity to bring his remuneration in line competitively with the current US market. The Chairman of the Board receives a fee of £200,000 per annum and his fee will be reviewed upon the anniversary of his appointment as Chairman, in June 2007.
(b) Annual bonus plan
(i) Bonus plan 2006/07
In 2006/07 an annual bonus of 96% of base salary was paid to the Group Chief Executive (target is 100% and potential maximum is capped at 200% of base salary). The Group Finance Director received a bonus of 48% of base salary (target is 50% and potential maximum is capped at 100% of base salary). The bonus entitlements for the Group Chief Executive and the Group Finance Director were calculated for 2006/07 on the basis of the following formula:
2005/06 pre-tax profit + inflation: 0% of maximum bonus;
2005/06 pre-tax profit + 10%: 50% of maximum bonus; and
2005/06 pre-tax profit + 15%: 100% of maximum bonus.
Increase in pre-tax profit is calculated on a constant exchange rate basis and is earned on a pro-rata basis for performance between the targets. In 2006/07 an annual bonus of 41.3% of base salary was earned by the Chief Executive of the UK division (target is 50% and potential maximum is capped at 100% of base salary). An annual bonus of 49.7% of base salary (target is 60% and potential maximum is capped at 120% of base salary) was earned by the Chief Executive of the US division. The bonuses were calculated using the same formula as above, but based on operating profit of the respective divisions.
(ii) Bonus plan 2007/07
The performance measure for the annual bonus plan for 2007/08 will be based on growth in profits. As shown below the specific targets agreed for the US division are identical to those set in 2006/07. The targets set for the UK division have been marginally reduced to reflect the lack of available store growth and the generally difficult retail market. The Group goals reflect the weighted average of the two divisions:
The US formula will be based upon divisional operating profit:
2006/07 operating profit + inflation: 0% of maximum bonus;
2006/07 operating profit + 10%: 50% of maximum bonus; and
2006/07 operating profit + 15%: 100% of maximum bonus.
The UK formula will be based upon divisional operating profit:
2006/07 operating profit + inflation: 0% of maximum bonus;
2006/07 operating profit + 8%: 50% of maximum bonus; and
2006/07 operating profit + 12%: 100% of maximum bonus.
The Group formula will be based upon Group pre-tax profit:
2006/07 pre-tax profit + inflation: 0% of maximum bonus;
2006/07 pre-tax profit + 9.4%: 50% of maximum bonus; and
2006/07 pre-tax profit + 14.1%: 100% of maximum bonus.
Increase in pre-tax profit is calculated on a constant exchange rate basis and is earned on a pro-rata basis for performance between the targets.
(c) Share option and long term incentive plans
Share option and long term incentive plan grants to directors are set out here and here. Click here for the factors influencing the choice of performance criteria and for the basis of measurement.
(i) Executive share option plans
In 2005, after consultation with shareholders, Signet discontinued retesting of options for future grants beginning with grants awarded in 2006. The Remuneration Committee historically took the position that the presence of retesting of performance conditions to determine the vesting of share option grants effectively eliminated the need for discounting the expected value of options. The elimination of the retesting of options means that the Remuneration Committee can no longer take that view. Towers Perrin analysed the Group’s performance to determine the probability that options granted without retests will fail to vest. The conclusion from their analysis was that there is a 35% probability that options granted in 2006 and beyond will fail to vest with a single test three years later. They therefore recommended the expected value of options be discounted by 35% which, they advised, is at the lower end of the discount range utilised by most UK public companies of between 30% and 70%.
In order to maintain market competitiveness, the Remuneration Committee developed proposals to restore the value lost by virtue of the elimination of the retesting of options. During December 2006 and January 2007 the Remuneration Committee consulted extensively with major shareholders, RREV and the ABI on proposals which comprised increases in the annual bonus opportunity and, where necessary, modest increases in base salary. These changes, which were broadly supported by shareholders, simply restored the exact total remuneration levels which were in place prior to the elimination of share option retesting.
For the Group Chief Executive, it was agreed that base salary would be increased by 2.9% and target annual bonus to move from 50% to 100% of base salary. For the Group Finance Director, base salary was increased by 2.6% with target annual bonus moving from 37.5% to 50% of base salary. The base salary for the Chief Executive of the US division was increased by 1.8% and target bonus moved from 40% to 60% of base salary. Finally, for the Chief Executive of the UK division, target bonus was increased from 37.5% to 50% of base salary. His base salary did not change.
These changes took effect from April 2006 when the retesting of share options and the reduction in the expected value took effect.
In addition to the four executive directors there are executives in both the UK and the US who participate in Signet’s share option plan, and who would also be subjected to the reduction in the value of the total packages. In addition the application of performance conditions to determine vesting is not competitive in the US.
Therefore it has been agreed, on the basis of these two factors and after consultation with shareholders, who were broadly supportive of the proposal, to remove vesting conditions for future grants of share options to executives below Board level. However vesting conditions will be maintained for options granted to executive directors. In dropping vesting conditions for executives below the Board, it is believed that the Group will both improve competitiveness in the US and also avoid having to correct the value gap in the same way as has been done for executive directors.
The Remuneration Committee has made the 2007/08 option grants on the basis of the arrangements described above. Options granted under the executive share option plans that have passed the necessary performance conditions are normally only exercisable between three and ten years from the date of grant, after which the options lapse.
The conditions as they apply are set out below:
UK executives
For UK executives the personal performance of participants will be assessed on each occasion that share option grants take place and will be reflected in the level of the individual awards. In addition, grants awarded up until 2006 and all subsequent grants made to executive directors are subject to exercise conditions as follows:
| Level of grant | Required annual rate of compound growth in earnings per share(1) above inflation(2) |
|---|---|
| Up to 200% of base salary | +3% |
| 201% to 400% of base salary | +4% |
(1) Normalised earnings per share as defined by the Institute of Investment Management and Research.
(2) Defined as the UK Retail Prices Index.
US executives
For US directors there is a pre-grant test based on both personal and corporate performance as described below. In addition grants awarded up until 2006 and all subsequent grants made to executive directors are subject to a post-grant exercise condition requiring that the annual compound growth in earnings per share be more than 3% above inflation.
UK and US executives
For grants made to both UK and US executives performance will be measured initially over three years from the start of the financial year in which the award is made. For grants awarded up until but not including those made in 2006, performance may be retested in accordance with the retest provisions. For grants beginning with those awarded in 2006/07 the post-grant performance condition will only be measured over three years from the start of the financial year in which the award is made, all retesting in the measurement of performance target achievement having been eliminated. As noted previously, all grants awarded to executives below the main board from 2007 and beyond are not subject to vesting conditions.
Grants to executive directors
Awards to the Group Chief Executive are based on principles (iv), (v) and (vi) (set out here), a comparative remuneration survey and a review of the performance of both the Group and the executive over the prior three years.
Before any share option grant is made to the Group Chief Executive, the Remuneration Committee has to satisfy itself that the demanding pre-grant conditions have been achieved. This requires affirmation: (i) that the Group’s business performance has been superior to that of its industry sector; and (ii) that the Group Chief Executive’s personal performance continues to be of the highest standard.
On the basis of sustained outperformance and with management achievements acknowledged by industry followers, the Committee concluded that the Group Chief Executive and Group Finance Director continued to merit total remuneration towards the upper end of the range determined by the remuneration principles. Based on the surveys conducted, this indicated a base salary increase as detailed above and a share option grant equivalent to four times base salary for the Group Chief Executive. Similar surveys undertaken in the UK indicated a base salary increase as detailed above for the Group Finance Director and options amounting to 120% of base salary. Similarly on the basis of survey data and performance the Chief Executives of the UK and the US divisions were awarded base salary increases as detailed above and were awarded options amounting to 80% and 160% of base salary respectively.
Scheme amendments
Certain provisions of the share option plans may be amended by the Board, although a number of basic provisions (and in particular most of the limitations on individual participation, the number of shares and the percentage of share capital that can be issued thereunder) cannot be altered to the advantage of the participants except with the approval of shareholders or in accordance with the adjustment provisions in the share option plans.
In 2007 the Remuneration Committee approved an amendment to the Share Option Plans to ensure compliance with UK age discrimination legislation contained in the Employment Equality (Age) Regulations 2006.
(ii) All-employee share plans
In 1998/99 the Group introduced an Inland Revenue approved savings related share option scheme for UK employees (the “Sharesave Scheme”), a US Section 423 Plan (the “Employee Stock Savings Plan”) and a savings related share option scheme for employees in the Republic of Ireland (the “Irish Sharesave Scheme”). These schemes give those employees with qualifying service the opportunity to participate in the equity of the Company, with the aim of aligning the interests of employees with those of shareholders.
The options granted under the Sharesave Scheme and the Irish Sharesave Scheme are normally exercisable between 36 and 42 months from the date of the relevant savings contract. Options are granted under these schemes at a price approximately 20% below the middle market price of the shares on the London Stock Exchange on the dealing day prior to the date that employees are invited to participate in them.
The options granted under the Employee Stock Savings Plan, for employees in the US, are normally exercisable between 24 and 27 months from the date of grant. The options under this plan are granted at a price approximately 15% below the middle market price of the shares on the London Stock Exchange on the date of grant. The period of exercise and the discount allowed vary from the UK due to different legal regulations in the US.
(iii) Long term incentive plan
Shareholders gave approval, in December 2005, to the Signet Group plc 2005 Long Term Incentive Plan (“LTIP”) which was a replacement for the Signet Group plc 2000 Long Term Incentive Plan (“LTIP 2000”), that expired in June 2005.
The LTIP provides for the Remuneration Committee to make awards subject to performance targets which will normally be tested at the end of a fixed period of at least three years. To the extent the performance targets are satisfied the participant will receive a combination of the grant of an option over shares in the Company and cash on the basis of a mix of 50% cash and 50% share options. The share options will normally be exercisable within ten years of the original award date.
The performance conditions, set by the Remuneration Committee for the foreseeable future, are based on:
- the compound annual growth in profit before tax of the Group or in operating profit of the relevant division as appropriate above a threshold inflation level; and
- ROCE of the Group or relevant division as appropriate.
In determining the precise conditions that will apply to an award, the Remuneration Committee will specify, at the commencement of each three-year performance period, the compound annual growth in profit that it will be necessary to achieve over the performance period and the required ROCE for the performance period.
The LTIP contains no element to allow retesting of the performance targets and allows only a pro-rated release of an award, whether in the form of the grant of an option over shares or cash, where a participant leaves early for good reasons or there is a change of control. The performance targets must in any event be satisfied before any release is made in all cases.
Awards were made to executive directors and other senior executives in 2004/05 and 2005/06 under the LTIP 2000 and for 2006/07 and 2007/08 under the LTIP. All these awards are subject to the fulfilment of performance conditions based upon the two components described above.
| 2007/08 award | 2006/07 award | 2005/06 award | 2004/05 award | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Group % |
UK % |
US % |
Group % |
UK % |
US % |
Group % |
UK % |
US % |
Group % |
UK % |
US % |
|
| Minimum performance for any vesting: | ||||||||||||
| Profit measure | Profit Growth in excess of threshold inflation level | |||||||||||
| ROCE measure | 19.8 | 31.4 | 18.7 | 20.1 | 28.2 | 19.3 | 23.2 | 42.2 | 19.4 | 22.2 | 43.0 | 17.6 |
| Profit Growth performance measure: | ||||||||||||
| Profit measure | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 | 10.0 |
| ROCE measure | 15.0 | 15.0 | 15.0 | 15.0 | 15.0 | 15.0 | 15.0 | 15.0 | 15.0 | 15.0 | 15.0 | 15.0 |
| ROCE performance measure: | ||||||||||||
| Specified ROCE required | 20.8 | 32.4 | 19.7 | 21.1 | 29.2 | 20.3 | 24.2 | 43.3 | 20.4 | 23.2 | 44.5 | 18.6 |
In each case performance is measured over a fixed period of three successive financial years starting with the one in which the award is made. Nothing is payable under the award unless both minimum performance conditions are achieved. If the performance conditions are achieved the award will vest and its value will depend on the extent to which the minimum performance conditions are exceeded:
- if Profit Growth exceeds the minimum threshold inflation level, the amount of the award will be calculated on a straight line basis from that level up to a specified inflection point, currently 10%, at which point 37.5% of the award will vest, and then at an accelerated rate on a straight line basis up to the maximum level of award at 15%. This maximum is equal to a specified percentage of base salary at the time at which the award vests. The maximum award for the Group Chief Executive under the LTIP 2000 was equal to 70% of base salary at vesting, and for the Group Finance Director and the Chief Executive of the UK division 50% of base salary at vesting and for the Chief Executive of the US division 45% of base salary at vesting. The maximum award for the Group Chief Executive under the LTIP in 2007/08 (as in 2006/07) is equal to 158% of base salary at vesting and for the Group Finance Director in 2007/08 (as in 2006/07) 77.0% of base salary at vesting and the Chief Executive of the UK division in 2007/08 (as in 2006/07) 68.0% of base salary at vesting and for the Chief Executive of the US division in 2007/08 (as in 2006/07) 100% of base salary at vesting; and
- if the minimum threshold inflation level of Profit Growth is achieved but the maximum award has not been earned, then the award may be increased on the basis of the ROCE growth. In the case of the Group Chief Executive, under the LTIP 2000 for each 0.5% by which the ROCE exceeds the level specified in the award, the amount of the award will increase by an amount equal to 5% of base salary (at vesting) up to a maximum increase equal to 35% of such base salary (i.e. 50% of the award). Similarly in the case of the Group Finance Director, for each 0.5% by which the ROCE exceeds the specified level the amount of the award will increase by an amount equal to 3% of base salary (at vesting) up to a maximum increase equal to 25% of such base salary(i.e. 50% of the award). In the case of the Chief Executive of the UK division the award will increase by 2% of such base salary (at vesting) up to a maximum increase equal to 25% of such base salary (i.e. 50% of the award) and in the case of the Chief Executive of the US division 3.6% of such base salary (at vesting) up to a maximum increase equal to 22.5% of such base salary (i.e. 50% of the award) for every 0.5% by which the ROCE exceeds the specified level. In the case of the Group Chief Executive, under the LTIP in 2007/08 (as in 2006/07) the maximum percentage of base salary that may be earned for each 0.5% by which the the ROCE exceeds its specified level is 11.3% which is in proportion to the increase in target LTIP award from 70% to 158% of base salary. Similarly in the case of the Group Finance Director, in 2007/08 (as in 2006/07) for each 0.5% by which the ROCE exceeds the specified level the amount of the award will increase by an amount equal to 4.6% of such base salary up to a maximum increase equal to 38.5% of such base salary and in the case of the Chief Executive of the UK division, in 2007/08 (as in 2006/07) 2.7% of such base salary up to a maximum increase equal to 34.0% of such base salary and for the Chief Executive of the US division, in 2007/08 (as in 2006/07) 8.0% of such base salary up to a maximum equal to 50% of such base salary.
In no event, however, can any such increase result in the applicable maximum award amount stated in the preceding paragraph being exceeded.
The table above shows the percentages and the inflection points which have been specified for the existing awards and indicates the relevant profits and ROCE to be used for measurement.
When the performance conditions have been satisfied, 50% of the amount which vests will be payable in cash and the other 50% will consist of the grant of an option to acquire shares in the Company, the number of shares being determined by using the middle market price on the day preceding the grant of the award. For the 2004/05, 2005/06 and 2006/07 awards, that share price was 112.50p, 112.60p and 106.00p respectively. Due to the deferred equity nature of the share linked element of the award, the exercise price of the total option grant under the LTIP 2000 is a nominal amount of £1 or $1, as appropriate (there is no nominal exercise price payable under the LTIP). The participants can normally exercise their option at any time after vesting until the tenth anniversary of the grant of the award.
The share price for the awards was fixed following the announcement of the preliminary results.
(d) Employee trusts
The share option plans may be operated in conjunction with one or more employee share ownership trusts (the Signet Group plc Employee Share Trust (“ESOT”) or the Signet Group plc 2004 Employee Share Trust (“2004 ESOT”)). The Signet Group Qualifying Employee Share Trust (“QUEST”) was removed from the register of companies during the year as it no longer fulfilled the purpose for which it had been originally set up.
Both the LTIP 2000 and the LTIP (the “LTIPs”) operate in conjunction with the ESOT and the 2004 ESOT which may be funded by the Group to acquire shares in the Company for the purposes of meeting the Company’s obligation to provide shares on the exercise of options.
The trustees of the ESOT and 2004 ESOT have waived their rights to any dividends declared on shares held in the trusts.
(e) Share scheme limits
The executive share option plans are subject to the following limits on the number of shares that may be issued:
(i) the maximum number of shares that have been or may be issued pursuant to options granted under the executive share option plans and any other discretionary share option scheme adopted by the Company may not exceed 5% of the shares from time to time in issue in any ten year period;
(ii) the maximum number of shares that have been or may be issued pursuant to options granted under the executive share option plans and any other employees’ share scheme adopted by the Company may not exceed 10% of the shares from time to time in issue in any ten year period; and
(iii) the maximum of 171,376,839 shares (representing 10% of the issued share capital on 8 July 2003) may be issued pursuant to incentive options granted under the US Plan.
In any ten year period not more than 10% of the issued share capital of the Company from time to time may in aggregate be issued or issuable pursuant to options granted under the Allemployee Schemes or any other employees’ share schemes adopted by the Company.
The number of shares which may be issued or issuable pursuant to the LTIPs (including to the ESOT and the 2004 ESOT), when aggregated with any shares issued or issuable by the Company in the preceding ten years under any employees’ share scheme, participation in which is at the discretion of the Board, is limited to 5% of the Company’s issued share capital from time to time. The number of shares which may be issued or issuable pursuant to the LTIPs (including to the ESOT and the 2004 ESOT), when aggregated with all shares issued or issuable by the Company in the preceding ten years under any other employees’ share scheme, is limited to 10% of the Company’s issued share capital from time to time.
No more than 5% of the issued share capital of the Company may be held by the trustee of the ESOT or the 2004 ESOT without prior approval of shareholders.
(f ) Shareholding guidelines
Shareholding guidelines have been set for directors of the Group. The Group Chief Executive is expected to build a holding of shares equal to at least twice salary and the Group Finance Director and the Chief Executives of both the UK and US divisions to at least one times salary. Until these levels have been achieved, half of any post tax option gains under the 2003 Plans should be held in Signet shares. All non-executive directors are required to build a minimum holding of 10,000 shares within two years of appointment and maintain that holding whilst they remain a director of the Company.
(g) Service contracts
The Group Chief Executive has a rolling service contract (dated 20 December 2000 and amended and restated in January 2006) with a US subsidiary with certain covenants given by Signet Group plc, which can be terminated on one year’s notice in writing by either party. The Group Finance Director has a rolling service contract (dated 14 June 1995 and amended on 15 May 2000) with the Company, which can be terminated on one year’s notice in writing by either party and which terminates on his 60th birthday.
The service contracts for the Group Chief Executive and the Group Finance Director provide for termination payments in the cases of early termination by the Group or in the event of certain changes of control. In these circumstances the amount of termination payments due to the Group Chief Executive would equal, in summary, the aggregate of (i) 100% of his base salary at the time of termination, (ii) 25% of his base salary in respect of pension and other benefits, (iii) his outstanding entitlement to a cash bonus under the annual bonus plan referred to above in respect of the proportion of the fiscal year prior to the effective date of termination, and (iv) a sum equal to a variable percentage (currently 74.4%) of the cash bonus to which he would have become entitled under the annual bonus plan during the notice period. If the Company reduces or eliminates the Directors’ and Officers’ liability insurance, although the Board has no intention of doing so, such that the Group Chief Executive does not have coverage which meets at least £100 million aggregate coverage limit and £50 million Side A aggregate dedicated coverage limits, then the Group Chief Executive may be permitted upon 90 days written notice to terminate his employment. In the event of such termination the Company will pay the Group Chief Executive his base salary and short term bonus pro-rated to the date of termination. Entitlement to any share options or LTIP awards is governed by the rules of the relevant scheme.
The amount of termination payments due to the Group Finance Director in the case of early termination by the Group in the event of certain changes of control would equal, in summary, the aggregate of (i) his annual salary at the time of termination, (ii) the market value of the contractual benefits in kind (including any pension contribution) to which he would have become entitled during the following 12 months, and (iii) all payments to which he would have become entitled under the annual bonus plan during the same 12 month period.
The Chief Executive of the UK division has a rolling service contract (dated 1 March 2003) with a UK subsidiary which can be terminated on one year’s notice in writing by either party or terminates on his 65th birthday. In the case of early termination, the contract provides for salary to be paid in lieu of notice, or where notice has been given, for any balance of the notice period.
The Chief Executive of the US division has a rolling service contract (dated 26 April 2002 and amended and restated in August 2004 and January 2006) with a US subsidiary. The Company may terminate the contract at any time by notice in writing. In the case of termination the Company is obligated to continue to pay salary for 12 months from the date of termination.
Entitlement to any share options or LTIP awards is governed by the rules of the relevant scheme, and these contracts all contain confidentiality and non-competition clauses.
The Chairman has a letter of appointment (dated 19 June 2006), for a fixed term of three years. The appointment does not provide for compensation for loss of office. Each non-executive director has a letter of appointment from the Company.
The Board has adopted the best practice corporate governance approach of appointing non-executive directors on a staggered basis for a specific three year period albeit with the ability to renew such appointments for longer periods. Therefore during the year letters of appointment were amended to reflect that change, with appointment now anticipated to run until each non-executive director is next due to retire by rotation in accordance with the Articles of Association. Letters of appointment were also updated to reflect changes to fees, committee membership, confidentiality undertakings and to include details of the Directors’ and Officers’ insurance cover. They do not provide for compensation for loss of office.
The letters of appointment are dated as set out below:
Robert Blanchard - 20 June 2006
Dale Hilpert - 20 June 2006
Brook Land - 20 June 2006
Robert Walker - 20 June 2006
Russell Walls - 20 June 2006
(h) Company pension
The Chairman does not receive any pension provision. The Group Chief Executive and the Chief Executive of the US division are members of both the 401(k) Plan and the DCP. Contributions made by Signet’s US division in respect of the Group Chief Executive during the period totalled £1,755ß (2005/06: £1,074ß) and £151,168ß (2005/06: £148,472ß) respectively and those for the Chief Executive of the US division during the period totalled £1,755ß (2005/06: £50ß) and £36,952ß (2005/06: £11,544ß) from his appointment on 12 January 2006, respectively.
Pension benefits in respect of the UK based directors are set out below.
| Robert Anderson Chief Executive UK division |
Walker Boyd Group Finance Director |
|||
|---|---|---|---|---|
| 2006 / 07 |
2005 / 06 |
2006 / 07` |
2005 / 06 |
|
| Change in accrued benefits during the year (gross of inflation) | - | 7,995 | 4,983 | 5,039 |
| Change in accrued benefits during the year (net of inflation) | - | 7,752 | 3,237 | 3,866 |
| Accrued benefits at the end of the year | 17,005 | 17,005 | 53,474 | 48,491 |
| Transfer value of change in accrued pension (net of inflation) | n/a | 90,804 | 41,892 | 58,987 |
| Transfer value of accrued benefits at the beginning of the year | 201,054 | 58,367 | 662,639 | 510,434 |
| Transfer value of accrued benefits at the end of the year | 189,799 | 201,054 | 698,295 | 662,639 |
| Change in transfer value of accrued benefits(1) | (11,255) | 141,837 | 35,656 | 152,205 |
| Group payments to the FURBS/supplement | 38,380 | 37,500 | 55,880 | 48,333 |
| Life assurance contributions | 521 | 737 | 539 | 1,100 |
(1) Calculated in accordance with the Actuarial Guidance Note GN 11.
(i) Aggregate emoluments for the year to 28 January 2006
The total emoluments for directors of the Company and officers of the Group (excluding amounts due under the LTIP), as listed here, for services in all capacities was £4,069,000 (2005/06:£2,270,000). The amounts due under the LTIP for directors of the Company and officers of the Group was £373,000 (2005/06:£532,000, restated to reflect the market value at vesting). Under the LTIP 50% of the amounts due are payable in cash and the other 50% consists of the grant of an option to acquire shares in the Company. Details of the directors’ emoluments are given above.