YOU ARE HERE | Governance / Remuneration report / Long term incentives
Print this pageAdd to print basketView print basketGlossaryBookmark this page

Long term incentives

Deferred Annual Bonus Scheme (DABS)

Messrs Böttcher, Bowtell, Long, Lundgren and Waggott participated in the DABS during the year ended 30 September 2009 and are expected to receive an award on 2 December 2009 as follows:

 Estimated value of award
Director£000
Dr Volker Böttcher237
Paul Bowtell294
Peter Long638
Johan Lundgren258
William Waggott215


Awards made under the DABS, and which remain outstanding at 30 September 2009, are given in the table below.

Deferred Annual Bonus Scheme (DABS)

 DABS shares held at 1 October 2008 DABS shares awarded during the year ended 30 September 2009 Award date Market price per share at award DABS shares Vested during the year ended 30 September 2009 Market price per share at vesting Value at Vesting £ Planned/ actual vesting date Maximum DABS shares held at 30 September 2009 Maximum value based on share price of 254.6p at 30 September 2009 £
Directors                    
Dr Volker Böttcher 60,432 3     19.12.07 270.40p       19.12.10 60,432 153,860
 241,729 4     19.12.07 270.40p       19.12.10 241,729 615,442
     104,809 5 28.11.08 205.25p       28.11.11 104,809 266,844
     419,236 6 28.11.08 205.25p       28.11.11 419,236 1,067,375
Total 302,161   524,045            826,206 2,103,521
Paul Bowtell 81,426       14.12.05 229.25p 81,426 1 218.62p 178,014 15.12.08 – –
 156,923 2     13.02.07 260.00p       13.02.10 156,923 399,526
 67,599 3     19.12.07 270.40p       19.12.10 67,599 172,107
 270,394 4     19.12.07 270.40p       19.12.10 270,394 688,423
     134,470 5 28.11.08 205.25p       28.11.11 134,470 342,361
     537,880 6 28.11.08 205.25p       28.11.11 537,880 1,369,442
Total 576,342   672,350     81,426    178,014  1,167,266 2,971,859
Peter Long 174,483       14.12.05 229.25p 174,483 1 218.62p 381,455 15.12.08 – –
 326,155 2     13.02.07 260.00p       13.02.10 326,155 830,391
 138,288 3     19.12.07 270.40p       19.12.10 138,288 352,081
 553,150 4     19.12.07 270.40p       19.12.10 553,150 1,408,320
     292,326 5 28.11.08 205.25p       28.11.11 292,326 744,262
     1,169,304 6 28.11.08 205.25p       28.11.11 1,169,304 2,977,048
Total 1,192,076   1,461,630     174,483    381,455  2,479,223 6,312,102
Johan Lundgren 67,431 3     19.12.07 270.40p       19.12.10 67,431 171,679
 269,723 4     19.12.07 270.40p       19.12.10 269,723 686,715
     135,446 5 28.11.08 205.25p       28.11.11 135,446 344,846
     541,784 6 28.11.08 205.25p       28.11.11 541,784 1,379,382
Total 337,154   677,230            1,014,384 2,582,622
Christoph Mueller 54,417 3     19.12.07 270.40p 54,417 7 234.70p 127,717 01.09.09 – –
 217,666 4     19.12.07 270.40p 55,069 8 234.70p 129,247 01.09.09 – –
     104,809 5 28.11.08 205.25p 104,809 7 234.70p 245,987 01.09.09 – –
     419,236 6 28.11.08 205.25p 35,356 8 234.70p 82,981 01.09.09 – –
Total 272,083   524,045     249,651    585,932  – –
William Waggott 73,558 3     19.12.07 270.40p       19.12.10 73,558 187,279
 294,230 4     19.12.07 270.40p       19.12.10 294,230 749,110
     97,442 5 28.11.08 205.25p       28.11.11 97,442 248,087
     389,768 6 28.11.08 205.25p       28.11.11 389,768 992,349
Total 367,788   487,210            854,998 2,176,825
Grand total 3,047,604   4,346,510     505,560    1,145,401  6,342,077 16,146,929

1  This ‘roll-over’award was based on a) performance to 30 September 2008 where the performance measure relates to EPS growth in excess of the rate of inflation; and b) performance to the 3rd anniversary of the award date where the performance measure relates to the Company’s TSR ranking against the constituent companies of the FTSE Mid-250 Index (excluding Investment Trusts) as calculated at the award date. A performance hurdle of the ROIC being in excess of the WACC must also be achieved for any of the award to be released. The number of shares released is graded according to a) EPS growth, with 7.5% of the award being released for 4% per annum in excess of inflation and 75% of the award released for 13% per annum in excess of inflation and b) ranking of the Company against the comparator group, with 2.5% of the award being released for median and 25% of the award being released for upper quartile. The ROIC/WACC hurdle was achieved, EPS growth was greater than 13% per annum in excess of inflation and the Company TSR ranking was in the upper quartile therefore the entire award was released on 14 December 2008.

2  This ‘roll-over’award is based on a) performance to 30 September 2009 where the performance measure relates to EPS growth in excess of the rate of inflation and b) performance to the 3rd anniversary of the Award date where the performance measure relates to the Company’s TSR ranking against the constituent companies of the FTSE Mid-250 index (excluding Investment Trusts) as calculated at the Award date. A performance hurdle of the ROIC being in excess of the WACC must also be achieved for any of the award to be released. The number of shares released is graded according to a) EPS growth, with 7.5% of the award being released for 4% per annum in excess of inflation and 75% of the award released for 13% per annum in excess of inflation and b) ranking of the Company against the comparator group, with 2.5% of the award being released for median and 25% of the award being released for upper quartile.

3  This award is the deferred element of the Annual Bonus entitlement for Financial Year 2006/2007 and is subject only to continued employment to the release date.

4  This matching award is based on a) performance to 30 September 2010 where the performance measure relates to (EPS) growth in excess of the rate of inflation and b) performance to the 3rd anniversary of the Award date where the performance measure relates to the Company’s TSR ranking against the constituent companies of the FTSE 100 index ranked 30 to 100 by market capitalisation as calculated at the award date. A performance hurdle of the return on ROIC being in excess of the WACC must also be achieved for any of the award to be released. The number of shares released is graded according to a) EPS growth, with 7.5% of the award being released for 12% in excess of inflation and 75% of the award released for 39% in excess of inflation and b) ranking of the Company against the comparator group, with 3.75% of the award being released for median and 25% of the award being released for upper quartile.

5  This award is the deferred element of the Annual Bonus entitlement for Financial Year 2007/2008 and is subject only to continued employment to the release date.

6  This matching award is based on a) performance to 30 September 2011 where the performance measure relates to EPS growth in excess of the rate of inflation and b) performance to the 3rd anniversary of the award date where the performance measure relates to the Company’s TSR ranking against the constituent companies of the FTSE 100 index ranked 30 to 100 by market capitalisation as calculated at the date. A performance hurdle of the ROIC being in excess of the WACC must also be achieved for any of the award to be released. The number of shares released is graded according to a) EPS growth, with 7.5% of the award being released for 12% in excess of inflation and 75% of the award released for 39% in excess of inflation and b) ranking of the Company against the comparator group, with 3.75% of the award being released for median and 25% of the award being released for upper quartile.

7  Christoph Mueller ceased employment with effect from 31 August 2009 due to redundancy. Under the terms of his departure and in accordance with the scheme rules these deferred awards were released in full.

8  Christoph Mueller ceased employment with effect from 31 August 2009 due to redundancy. Under the terms of his departure and in accordance with the scheme rules these matching awards were released early subject to pro-ration for time elapsed and performance to cessation of employment.

Performance Share Plan (PSP)

During the year ended 30 September 2009 there were four cycles in operation.

The award made in respect of each cycle and the maximum pre-tax number of ordinary shares due if performance targets are achieved in full are:

  Maximum PSP shares held at 1 October 2008 Maximum PSP shares Awarded during the year ended 30 September 2009 Award date Market price per share at award PSP shares Vested during the year ended 30 September 2009 Market price per share at vesting Value at Vesting£ Planned/ actual vesting date Maximum PSP shares held at 30 September 2009 Maximum value based on share price of 254.6p at 30 September 2009£
Directors                    
Dr Volker Böttcher 39,444       03.09.07 285.50p 39,444 1 219.28p 86,493 15.12.08 – –
  78,888 2 –   03.09.07 285.50p –     13.02.10 78,888 200,849
  129,209 3 –   13.09.07 273.00p –     01.12.10 129,209 328,966
      221,829 4 28.11.08 205.25p –     28.11.11 221,829 564,777
Total 247,541   221,829     39,444    86,493  429,926 1,094,592
Paul Bowtell 38,168       14.12.05 229.25p 38,168 1 219.28p 83,695 15.12.08   
  74,039 2 –   13.02.07 260.00p –     13.02.10 74,039 188,503
  202,198 3 –   13.09.07 273.00p –     01.12.10 202,198 514,796
      286,479 4 28.11.08 205.25p –     28.11.11 286,479 729,376
Total 314,405   286,479     38,168    83,695  562,716 1,432,675
Peter Long 92,476       14.12.05 229.25p 92,476 1 219.28p 202,781 15.12.08   
  173,078 2 –   13.02.07 260.00p –     13.02.10 173,078 440,657
  586,081 3 –   13.09.07 273.00p –     01.12.10 586,081 1,492,162
      828,258 4 28.11.08 205.25p –     28.11.11 828,258 2,108,745
Total 851,635   828,258     92,476    202,781  1,587,417 4,041,564
Johan Lundgren 65,174       03.09.07 285.50p 65,174 1 219.28p 142,914 15.12.08   
  130,348 2 –   03.09.07 285.50p –     13.02.10 130,348 331,866
  104,773 3 –   13.09.07 273.00p –     01.12.10 104,773 266,752
  192,307 3     19.12.07 270.40p –     19.12.10 192,307 489,614
      287,106 4 28.11.08 205.25p –     28.11.11 287,106 730,972
Total 492,602   287,106     65,174    142,914  714,534 1,819,204
Christoph Mueller 55,221       03.09.07 285.50p 55,221 1 220.50p 121,762 15.12.08 – –
  110,443 2 –   03.09.07 285.50p 43,465 5 234.70p 102,012 01.09.09 – –
  129,209 3 –   13.09.07 273.00p 38,791 5 234.70p 91,042 01.09.09 – –
      217,759 4 28.11.08 205.25p 19,622 5 234.70p 46,053 01.09.09 – –
Total 294,873   217,759     157,099    360,869  – –
William Waggott 122,343       03.09.07 285.50p 122,343 1 220.50p 269,766 15.12.08 – –
  244,685 2 –   03.09.07 285.50p –     13.02.10 244,685 622,968
  146,520 3 –   13.09.07 273.00p –     01.12.10 146,520 373,040
      209,500 4 28.11.08 205.25p –     28.11.11 209,500 533,387
Total 513,548   209,500     122,343    269,766  600,705 1,529,395
Grand total 2,714,604   2,050,931     514,704    1,146,518  3,895,298 9,917,430

1  This ‘roll-over’award was based on performance from 1 November 2005 to 30 September 2008 where the performance measure related to EPS growth in excess of the rate of inflation and a performance hurdle of the ROIC being in excess of the WACC. The number of shares released is graded according to EPS growth, with 10% of the award being released for 4% pa in excess of inflation and the entire award released for 13% per annum in excess of inflation. The ROIC/WACC hurdle was achieved and EPS growth was greater than 13% per annum in excess of inflation therefore the entire award was released on 14 December 2008.

2  This ‘roll-over’award is based on performance from 1 November 2006 to 30 September 2009 where the performance measure relates to EPS growth in excess of the rate of inflation and a performance hurdle of the ROIC being in excess of the WACC. The number of shares released is graded according to EPS growth, with 10% of the award being released for 4% per annum in excess of inflation and the entire award released for 13% per annum in excess of inflation.

3  This award is based on a) performance to 30 September 2010 where the performance measure relates to EPS growth in excess of the rate of inflation and b) performance to the 3rd anniversary of the Award date where the performance measure relates to the Company’s TSR ranking against the constituent companies of the FTSE 100 index ranked 30 to 100 by market capitalisation as calculated at the Award date. A performance hurdle of the ROIC being in excess of the weighted average cost of capital (WACC) must also be achieved for any of the award to be released. The number of shares released is graded according to a) EPS growth, with 5% of the award being released for 12% in excess of inflation and 50% of the award released for 39% in excess of inflation and b) ranking of the Company against the comparator group, with 7.5% of the award being released for median and 50% of the award being released for upper quartile.

4  This award is based on a) performance to 30 September 2011 where the performance measure relates to EPS growth in excess of the rate of inflation and b) performance to the 3rd anniversary of the Award date where the performance measure relates to the Company’s TSR ranking against the constituent companies of the FTSE 100 index ranked 30 to 100 by market capitalisation as calculated at the Award date. A performance hurdle of the ROIC being in excess of the WACC must also be achieved for any of the award to be released. The number of shares released is graded according to a) EPS growth, with 5% of the award being released for 12% in excess of inflation and 50% of the award released for 39% in excess of inflation and b) ranking of the Company against the comparator group, with 7.5% of the award being released for median and 50% of the award being released for upper quartile.

5  Christoph Mueller ceased employment with effect from 31 August 2009 due to redundancy. Under the terms of his departure and in accordance with the scheme rules these awards were released early subject to pro-ration for time elapsed and performance to cessation of employment.

Value Creation Synergy Plan (VCSP)

Messrs Böttcher, Bowtell, Long, Lundgren and Waggott participated in the VCSP during the year ended 30 September 2009 and are expected to receive a deferred share award on 2 December 2009 as follows:

 Estimated value of award
Executive Director £000
Dr Volker Böttcher 168
Paul Bowtell 253
Peter Long 600
Johan Lundgren 309
William Waggott 220


Awards made under the VCSP, and which remain outstanding at 30 September 2009, are given in the table below.

 VCSP shares held at 1 October 2008 VCSP shares Awarded during the year ended 30 September 2009 Award date Market price per share at award VCSP shares Vested during the year ended 30 September 2009 Market price per share at vesting Value at Vesting £ Planned/ actual vesting date Maximum VCSP shares held at 30 September 2009 Maximum value based on share price of 254.6p at 30 September 2009 £
Directors               
Dr Volker Böttcher  78,606128.11.08 205.25 p–     28.11.11 78,606 200,131
Total  78,606     –      78,606 200,131
Paul Bowtell  123,264128.11.08 205.25 p–     28.11.11 123,264 313,830
Total  123,264     –      123,264 313,830
Peter Long  292,326128.11.08 205.25 p–     28.11.11 292,326 744,262
Total  292,326     –      292,326 744,262
Johan Lundgren  148,990128.11.08 205.25 p–     28.11.11 148,990 379,329
Total  148,990     –      148,990 379,329
Christoph Mueller  78,606128.11.08 205.25 p39,7742234.70 p93,350 01.09.09 – –
Total  78,606     39,774    93,350  – –
William Waggott  107,186128.11.08 205.25 p–     28.11.11 107,186 272,896
Total  107,186     –      107,186 272,896
Grand total  828,978     39,774    93,350  750,372 1,910,448

1  This award is the deferred element of Tranche 1 of the VCSP for Financial Year 2007/2008. A profit margin performance hurdle must also be achieved for any of the award to be released. The number of shares released is graded according to synergistic value achieved with none of the award being released for synergistic value below £100m and all of the award being released for £150m synergistic value or more.

2  Christoph Mueller ceased employment with effect from 31 August 2009 due to redundancy. Under the terms of his departure and in accordance with the scheme rules these awards were released early subject to pro-ration for time elapsed and performance to cessation of employment.

Five-year long term cash plan

Under the five-year long term cash bonus agreement between Peter Long and First Choice Holidays PLC (now First Choice Holidays Limited), approved at the 2005 AGM of that company, Peter Long is eligible to receive a maximum of £600,000, subject to EPS growth in excess of RPI growth, the Company’s TSR ranking against the constituent companies of the FTSE Mid-250 Index (excluding Investment Trusts) as calculated at the award date, and the achievement of personal objectives as determined by the Committee over the period to 30 September 2009. A performance hurdle of the ROIC being in excess of the WACC must also be achieved for any of the bonus to be payable. The amount of bonus payable is graded according to:

  • EPS growth, with 3.5% of the award being released for 4% per annum in excess of inflation and 35% of the award released for 13% per annum in excess of inflation;
  • TSR ranking of the Company against the comparator group, with 5% of the award being released for median and 50% of the award being released for upper quartile; and
  • The remaining 15% of the Bonus being payable for the achievement of personal objectives.

The ROIC/WACC hurdle was achieved, EPS growth was greater than 13% per annum in excess of inflation, the Company TSR ranking was in the upper quartile and personal objectives were achieved in full therefore all of the award was paid.

 Value of award
Director £000
Peter Long 600