Accountability
Directors’ remuneration report
Executive directors’ pensions
The pension details, as applicable for each executive director (non-executives not being eligible), all of whom served as executive directors throughout the year, are shown in the table above. The total DC employer contributions for the directors was £169,100 (2006: £134,900). Mr Holt’s DC 2007 contributions include an element paid during 2007 in respect of 2006 which was not reported in the 2006 report. Increases in accrued pensions during the year exclude those due to inflation. The transfer values of increases during the year, and changes in total transfer values during the year, are shown before the effects of inflation and after deduction of the directors’ own DB contributions during the year. Transfer values as at 31 December 2006 and 2007 are calculated in accordance with guidance published by the Institute of Actuaries and the Faculty of Actuaries dated 4 August 2003.
Directors pension details
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Executive directors’ Capital Builder Plan participations
The applicable classes of business which will determine the rewards payable to each of the directors of the Company participating in both the 2001 and 2006 Plans are the classes which they themselves underwrite, the wider performance of the respective divisions that they head (AIS for Mr Carpenter and Non-marine for Mr Holt) and the Group’s underwriting as a whole. There have been no material changes in the classes in which they participate between the 2006 and 2007 awards.
Since 2006 Amlin Bermuda Ltd’s underwriting is included, with different applicable percentage participations, in the results of those classes written in both the UK and Bermuda.
The estimated final rewards of each of the directors in respect of 2001 Plan are as shown in the table above. 50% of the then total estimated reward was paid to partipants in 2006 and 50% of the then estimated balance was paid in 2007. The final balance, based on 31 December 2007 reserving, will be paid later in 2008. At the date of this report the total rewards for each individual from the 2001 Plan, and thus the participating directors’ final payments, are subject to the completion by the auditors, and approval by the Committee, of a special audit.
In 2006 and 2007 awards were made under the 2006 Plan in respect of performance periods of the underwriting years 2006 to 2010 and 2007 to 2011 respectively. No payments have yet been made under the 2006 Plan.
Directors' Estimated 2001 Capital Builder Plan rewards
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Executive directors’ Performance Share Plan, Long Term Incentive Plan and share options participations
As described in the 'Remuneration policies' section earlier in this report, all of these incentive plans involve options being granted over shares in the Company, whether at exercise prices determined in relation to the market price at the date of grant (executive options), a discount to such price (Sharesave) or at a nominal exercise price of £1 in total per exercise (PSP and LTIP).
As at 31 December 2007 the options held under these plans by executive directors serving at the year end, all of whom were directors throughout the year, and the changes during the year, are set out in the following two tables. In addition each executive director was awarded 1,030 shares as Free Shares in the SIP in April 2007, which subsequently became 915 ordinary shares and 1,030 B Shares in December 2007 and are included in the directors’ shareholding interests set out in the Directors' report. The share price on the date of the 2007 PSP and LTIP awards (7 March) was 316.25p.
Directors’ PSP, LTIP and share options held
B D Carpenter
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R A Hextall
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A W Holt
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C E L Phillips
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The performance conditions of all of the executive share options granted up to 2004, including the ML 1998 options, had been fully satisfied as at the start of 2007. The performance against the primary conditions of those grants which had not vested by the start of 2007, which involve ranking the Company’s TSR against that of a comparator group of Lloyd’s companies, in each case over the three year measurement period since grant, was as shown in the top table.
Directors options exercised during 2007
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Accordingly, the Committee has confirmed that the primary conditions of the above grants of options, including those which required top quartile performance, have been satisfied. The Committee has also concluded in both cases that the secondary condition had been satisfied on first testing. In reaching such conclusion the Committee had regard to underlying earnings, returns on equity, and increases in net tangible assets per share over the relevant periods.
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