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This report sets out UBM’s policy on executive remuneration together with details of the remuneration received by directors in respect of the year ended 31 December 2005. A resolution to approve this report will be put to shareholders at the annual general meeting on 4 May 2006.
Major Changes in 2005
During the year UBM appointed a new chief executive and the board has taken that opportunity, in consultation with our major shareholders, to adopt a fresh approach to directors’ remuneration that reduces the proportion of reward that is fixed, and makes the package more performance-oriented. In this way we seek to tie the interests of directors and shareholders more closely together. In doing so, we have been mindful of the need to achieve an appropriate balance between being sufficiently competitive to attract the best talent in the field while not spending more than is necessary. The key elements to note are:- |
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• |
Basic pay for the chief executive is less in absolute terms, and as a proportion of the overall package, than was previously the case. |
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• |
Variable rewards are, potentially, greater than before, but dependent on outperformance of stretching targets. |
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• |
Executive directors are now able to participate in two long term incentive plans; one to reward exceeding absolute targets set by the remuneration committee, the other to reward above median performance relative to a relevant peer group in shareholder return. |
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• |
Both plans reward performance over three years. |
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• |
Neither the CEO nor the CFO participate in a defined benefit pension scheme. |
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Remuneration Committee
Role
Responsibility for formulating and recommending policy on executive remuneration has been delegated to the remuneration committee by the board. The committee approves the remuneration packages of the executive directors and chairman and also reviews the general remuneration framework for senior executives. During 2005, the committee was responsible for the introduction of two new long term incentive plans, the Performance Share Plan and the Bonus Investment Plan.
Membership
The committee is composed entirely of independent non-executive directors. Members of the committee during 2005 were Chris Powell (chairman), Jonathan Newcomb, Adair Turner and Sandy Leitch (from 11 January 2005). Chris Powell was succeeded as chairman by Sandy Leitch in January 2006. Geoff Unwin, chairman of the board, and David Levin, CEO, usually attend meetings, but are not present when matters relating to their own remuneration are discussed. The committee met formally on six occasions during 2005; all meetings were attended by all members.
Advisors
During 2005 the committee was advised by Kepler Associates, independent remuneration consultants, in relation to the new long term incentive plans referred to above and on the benchmarking of remuneration packages. Kepler Associates were appointed by the committee and provide no other services to the company. The committee was also assisted by Allen & Overy LLP (legal advice), Barnett Waddingham LLP (retirement benefits and pensions advice) and Ernst & Young LLP (measurement of performance condition for share schemes). Allen & Overy LLP also provide legal advice to the group, Barnett Waddingham LLP provide actuarial advice to the trustees of UBM’s pension schemes, and Ernst & Young LLP provide audit services to the group. The committee received assistance internally from the HR director, Jane Stables, the employee and benefits manager, Jane Allen, and the company secretary, Anne Siddell, who is secretary to the committee.
Remuneration Policy
The principal objective of our remuneration policy for 2006 and beyond is to recruit and retain employees with the appropriate skills and qualities to drive the group’s strategy and deliver value for shareholders. In implementing this policy, we have shifted the balance from fixed to variable remuneration. Base salary levels are designed to be in line with the market while variable remuneration is linked to key measures of both corporate and personal performance and rewards significant outperformance of targets. The company’s long-term incentive plans are designed to incentivise and retain management and to align their interests with those of shareholders by supporting our commitment to long-term growth. For 2005, the estimated fair value of variable pay for executive directors accounted for the following proportions of their total remuneration (excluding pensions and benefits):-
|
|
David Levin |
63% |
|
|
Nigel Wilson |
56% |
|
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Charles Gregson |
48% |
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The various elements of executive directors’ remuneration packages are described below.
Base salary
In determining base salaries, the committee benchmarks salary levels for comparable roles at companies of similar sector and size, and considers matters such as inflation, the individual’s responsibilities, the company’s performance and the salary policy throughout the group as a whole. David Levin, who joined as group chief executive in April 2005, received a base salary of £500,000 per annum, which was increased by 4% with effect from 1 January 2006. Following a review of the role and responsibilities of other executive directors, Nigel Wilson’s base salary was increased from £330,475 to £400,000 per annum with effect from 1 October 2005. Charles Gregson has assumed the role of chief executive of PR Newswire and, by agreement with him, his base salary was reduced from £411,765 to US$375,000 per annum with effect from 1 November 2005.
Bonuses
Executive directors are eligible for an annual bonus dependent on the achievement of targets, which take account of corporate performance as well as individual objectives. These targets are reviewed annually and new objectives set by the committee for each director at the start of the financial year. A substantial part of the bonus is paid in the form of shares, receipt of which is deferred for a number of years.
Maximum bonus awards for executive directors for 2005 were set at 110% of salary, with 90% of salary based on financial measures (principally performance against budgeted earnings per share and profits) and 20% of salary relating to the achievement of individual objectives. For 2006 the maximum opportunity for financial performance will be increased to 100% of salary. The element relating to the achievement of individual objectives remains unchanged at 20% of salary.
Bonuses for 2005 for David Levin, Nigel Wilson and Charles Gregson will be awarded under the Bonus Investment Plan (described below) following its approval by shareholders during the year. As indicated in last year’s annual report Clive Hollick, who retired in May 2005, will receive a pro rated bonus based on the achievement of corporate financial targets. Part of this bonus will be paid in the form of shares. A bonus of £250,000 referred to in the 2004 annual report was not paid, following concern expressed by shareholders. Malcolm Wall, who left the board in March 2005, will not receive a bonus for 2005.
Performance Share Plan (“PSP”)
The Performance Share Plan supports our focus on longer term incentives by providing a share-based reward which requires UBM’s total shareholder return (“TSR”) to outperform its peers’ TSR over a three year period. Performance is measured against a peer group of companies selected by the remuneration committee, and none of the award vests if UBM’s TSR is less than the median of that group. 25% of the award vests if UBM’s TSR is ranked at median position (subject to a maximum value of 25% of base salary), and 100% vests if UBM’s TSR is ranked in the top decile. In between these positions, the award vests on a straight-line basis. The vesting schedule is illustrated below. |
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|
Position |
|
% of shares that vest |
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1-3 |
|
100% |
4-10 |
|
pro rata between 25% and 100% |
11 (median) |
|
25% (subject to maximum 25% of salary) |
12-21 |
|
0% |
|
|
|
2005 One Year Total Shareholder Return (%)
Peer Group Performance (including UBM) |
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![](pixs/tsr.gif) |
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The committee considers TSR to provide an objective measure of performance and the selection of a tailored group of companies to enable measurement of UBM’s performance against comparable businesses. The comparator group used for the awards made in 2005 comprises the following 20 companies, which have been selected for their mix of business and geographic representation: |
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Aegis Group |
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CNET Networks |
DMGT |
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Dow Jones |
Emap |
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McGraw-Hil |
Euromoney |
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VNU |
Johnston Press |
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Wolters Kluwer |
Pearson |
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Axel Springer |
Reed Elsevier |
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Lagardere |
Reuters |
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APN News & Media |
T&F Informa |
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Global Sources |
Trinity Mirror |
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Thomson |
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The committee will review the peer group from time to time, but not less frequently than once a year, to confirm that it continues to represent an appropriate benchmark. The committee must also satisfy itself that the reported TSR is a genuine reflection of the company’s underlying financial performance over the three-year performance period before releasing any awards. The maximum value of an award will generally not exceed 1.5 times base salary in any financial year, although awards of up to 2 times salary may be made in exceptional circumstances.
Shares that vest under the Performance Share Plan accrue dividends.
Bonus Investment Plan
The Bonus Investment Plan enables part of participants’ annual bonus to be deferred into UBM shares, which must be held for three years, and provides the opportunity to earn further shares based on performance against stretching targets. 25% of any annual bonus awarded will be automatically deferred into UBM shares to be held for three years. The participant may also elect to defer up to a further 25% of the bonus award into shares for the same period. At the end of three years the participant could receive up to two additional shares for every share held if the company’s earnings per share have grown by at least 7% per annum above UK inflation over the three year period. A lower ratio of matching shares may be earned if earnings per share have grown by more than 3% per annum above UK inflation over the three year period, as illustrated below. |
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|
EPS growth + inflation (per annum) |
|
Matching shares awarded per share held |
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3% |
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0 |
4% |
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0.5 |
5% |
|
1 |
6% |
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1.5 |
7% |
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2 |
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The committee considers that a performance condition based on long term growth in earnings per share reflects the group’s financial targets and complements the TSR measure of the Performance Share Plan, and considers the targeted growth levels to be appropriately stretching.
Shares that vest under the Bonus Investment Plan accrue dividends.
Following shareholder approval for the Bonus Investment Plan, executive directors were offered, and accepted, the opportunity
to participate in the plan for 2005 on condition that they deferred 50% of their bonus entitlement into shares.
Other incentive plans
Executive directors have previously participated in the Executive Share Option Scheme, Senior Executive Equity Participation Plan and Medium Term Incentive Plan, which are described in more detail on pages 31 to 32. They are no longer eligible for awards under these plans, but entitlements from these plans still remain and are shown on pages 30 to 32.
David Levin was appointed Group Chief Executive on 5 April 2005, before consultation on the new Performance Share Plan and Bonus Investment Plan had been initiated. By agreement with him, 50% of his incentives on joining were granted under the Executive Share Option Scheme in April 2005 and 50% under the Performance Share Plan in October 2005.
Sharesave
Executive directors are also entitled to participate in the Sharesave scheme, under which all eligible employees around the group may acquire options over ordinary shares of the company at a discount of up to 20% of their market price, using the proceeds of a related SAYE contract.
Pensions
All UBM’s defined benefit schemes were closed to new entrants by 1996, and for all employees (including executive directors) joining the group since then it is our policy to offer defined contribution pension provision. David Levin and Nigel Wilson are members of the defined contribution section of the United Group Pension Scheme. Charles Gregson is a member of the United Pension Plan which is an approved defined benefit scheme. Charles Gregson will cease to be an active member of the United Pension Plan on 1 April 2006 and will thereafter receive an annual cash payment equal to 20% of base salary in lieu of pension contributions.
Performance conditions
In 2005, UBM started reporting its results in line with International Financial Reporting Standards (“IFRS”). In order to achieve consistency of measurement, the committee intends to retain UK GAAP as applied in 2004 as the basis for measuring performance conditions for awards maturing in 2006. This position will be reviewed for future years, as IFRS becomes more established.
Dilution limits
The use of newly issued or treasury shares to satisfy awards under the group’s long term incentive plans is limited to 10% of UBM’s issued share capital. It is expected that awards made under the Performance Share Plan and Bonus Investment Plan will be satisfied with market-purchased shares held by an employee benefit trust.
Executive directors’ service contracts
It is the company’s policy that all executive directors should have service contracts that are terminable on no more than one year’s notice and that contracts should not have a fixed term. David Levin and Nigel Wilson’s contracts provide for automatic termination at age 60. Charles Gregson’s service contract was amended during the year and now provides for automatic termination at age 65. If Charles Gregson’s employment were terminated other than for cause he would be entitled to a payment, calculated by reference to his unexpired period of notice, of up to one year’s salary, benefits and 50% of average bonus over the preceding three years (excluding any special bonus). Under David Levin and Nigel Wilson’s contracts, any payments on early termination by the company would be by reference to the unexpired period of notice, subject to a duty to mitigate.
The dates on which each executive director’s current service contract commenced are as follows: |
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David Levin |
- 5 April 2005 |
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Charles Gregson |
- 1 November 2005 |
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Nigel Wilson |
- 6 July 2001 |
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Payments to previous directors
As indicated in last year’s report UBM entered into an agreement with Clive Hollick to retain his consultancy services for up to twelve months following his retirement, for which he received a fee of £100,000.
Malcolm Wall received a payment of £100,000 as compensation for loss of office and the company also paid outplacement fees of £25,000 on his behalf.
Both remain entitled to exercise existing awards under the company’s long-term incentive plans for a limited period, in accordance with the rules of those plans.
Policy on external appointments
The company considers that by permitting executive directors to hold office as a non-executive director of another company, they will increase their knowledge and experience, thereby benefiting UBM. The policy allows executive directors to accept not more than two outside corporate directorships, subject to board approval. Directors are entitled to retain the fees earned.
Charles Gregson is chairman of ICAP plc, for which a contribution was paid direct by ICAP plc to UBM. With effect from 1 November 2005, such fees became payable directly to Charles Gregson and he earned £18,333 in respect of the period from 1 November to 31 December 2005. He also earned £40,000 in respect of his directorship of Provident Financial Plc. Nigel Wilson earned £35,000 in respect of his directorship of Halfords Plc. David Levin is a member of the finance committee of the Oxford University Press, a department of Oxford University, and received fees of £10,000 from the University.
Non-Executive Directors
Policy on non-executive directors’ remuneration
The board’s policy on non-executive directors’ remuneration is to pay fees which reflect their responsibilities, are competitive with those of other FTSE 250 companies, and which align directors’ interests with those of shareholders. The board as a whole considers and approves the fees of the non-executive directors, with the exception of the chairman whose fees are approved by the remuneration committee.
Pursuant to the policy outlined above, non-executive directors receive a proportion of their fees in the form of shares with the balance payable in cash. Ordinary shares in the company are provisionally awarded and are included in the directors’ share interest table on page 33. The directors will become entitled to receive these shares when they leave the board, subject to certain conditions. The remuneration table on page 28 shows the fees paid to non-executive directors and the cash value of shares as at the date they were provisionally awarded. Non-executive directors receive a cash fee of £30,000 per annum, which includes membership of board committees. An additional payment of £10,000 per annum is made to the chairmen of the remuneration and audit committees and to the senior independent director, John Botts. Non-executive directors’ fees were last reviewed in November 2004.
The chairman, Geoff Unwin, receives a fee of £100,000 per annum paid in cash as well as a provisional allocation of ordinary shares as described above. These fees have remained unchanged since his appointment in November 2002.
Non-executive directors’ contracts
The chairman, Geoff Unwin, has a contract which was entered into on 5 November 2002 and which is terminable by either party on not less than twelve months’ notice. His contract contains no provision for payment of compensation on early termination.
Other non-executive directors do not have a service contract with the company but are engaged under a letter of appointment. John Botts, Adair Turner and Chris Powell have notice periods of six months while Jonathan Newcomb, Christopher Hyman and Sandy Leitch have notice periods of three months. None of the non-executive directors’ terms of appointment contain any provision for payment of compensation on early termination. Non-executive directors are not entitled to participate in the company’s share option or pension schemes. Each director’s appointment (including that of the chairman) is reviewed every three years. Set out below are the dates on which each non-executive director was first appointed to the board and the year in which he was last re-elected by shareholders. |
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|
Director |
Date of appointment |
|
Date of last re-election |
|
John Botts |
8 July 1997 |
|
2004 |
Christopher Hyman |
7 May 2004 |
|
2005 |
Sandy Leitch |
11 January 2005 |
|
2005 |
Jonathan Newcomb |
27 September 2001 |
|
2005 |
Chris Powell |
4 April 1996 |
|
2005 |
Adair Turner |
1 January 2000 |
|
2003 |
Geoff Unwin (Chairman) |
4 April 1996 |
|
2003 |
|
|
|
|
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Performance Graph |
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![](pixs/performance.gif) |
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The above graph shows UBM’s total shareholder return performance over the last five years since 31 December 2000 as compared to the FTSE Media Index, which has been chosen as UBM is a constituent of that index.
Governance
The committee has written terms of reference which may be viewed on the group’s website. Copies may be obtained from the company secretary. The committee’s constitution and operation, and the company’s remuneration policy, are in compliance with the Combined Code on corporate governance.
Directors’ Remuneration
In accordance with the Companies Act 1985, as amended by the Directors’ Remuneration Report Regulations 2002, the following information in this report has been audited by Ernst & Young LLP.
Table of individual directors’ remuneration |
Directors |
Basic salary
|
Fees
£ |
Benefits(2)
£ |
Bonus(3)
£ |
Allocated Shares(4)
£ |
MTIP
£ |
Compensation
for loss
of office |
Total for
2005
£ |
Total for
2004
£ |
Employers'
pension
conts
(Money
Purchase)
£ |
|
David Levin(1) |
369,872 |
|
12,029 |
406,860 |
|
|
|
788,761 |
- |
72,000 |
Charles Gregson(5) |
281,714 |
|
61,643 |
407,648 |
|
|
|
751,005 |
664,085 |
|
Nigel Wilson |
347,857 |
|
14,277 |
382,643 |
|
|
|
744,777 |
687,736 |
67,992 |
Geoff Unwin |
|
100,000 |
|
|
115,070 |
|
|
215,070 |
209,393 |
|
John Botts |
|
40,000 |
|
|
17,260 |
|
|
57,260 |
55,771 |
|
Christopher Hyman |
|
30,000 |
|
|
17,260 |
|
|
47,260 |
25,987 |
|
Sandy Leitch |
|
29,231 |
|
|
12,544 |
|
|
41,775 |
- |
|
Jonathan Newcomb |
|
30,000 |
|
|
17,260 |
|
|
47,260 |
40,771 |
|
Chris Powell |
|
40,000 |
|
|
17,260 |
|
|
57,260 |
55,771 |
|
Adair Turner |
|
40,000 |
|
|
17,260 |
|
|
57,260 |
50,771 |
|
|
Directors who retired
during the year |
|
|
|
|
|
|
|
|
|
|
Clive Hollick(6) |
275,872 |
|
6,912 |
165,523 |
|
137,936 |
|
586,243 |
1,440,608 |
|
Malcolm Wall(7) |
86,618 |
|
3,175 |
|
|
|
100,000 |
189,793 |
611,824 |
109,707 |
|
Total emoluments |
1,361,933 |
309,231 |
98,036 |
1,362,674 |
213,914 |
137,936 |
100,000 |
3,583,724 |
3,842,717 |
249,699 |
|
|
|
Notes to directors’ remuneration table |
|
1. |
|
David Levin was appointed on 5 April 2005 and his remuneration is shown from that date. |
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|
|
2. |
|
Benefits are non pensionable car and cash allowances. Benefits for Charles Gregson include a relocation allowance. |
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|
|
3. |
|
The bonus column reflects the cash value of bonuses earned in respect of 2005. 50% of the total bonus earned will be deferred into ordinary shares to be held for three years under the Bonus Investment Plan. Before its award David Levin and Nigel Wilson sacrificed part of their cash bonus entitlement. A payment equal to 110% of the amount sacrificed will be made to the United Group Pension Scheme in April 2006. |
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|
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4. |
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Non-executive directors’ fees include an element which is payable in the form of ordinary shares as described on page 27. The allocated shares column reflects the cash value of shares on the date on which they were provisionally allocated, i.e. 1 April (533.5 pence) and 3 October (561.0 pence). |
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|
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5. |
|
The company received a contribution of £91,667 from ICAP plc in consideration for making available the services of Charles Gregson as chairman of that company in 2005. Charles Gregson’s remuneration shown above is net of that contribution. |
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6. |
|
Clive Hollick resigned as a director at the AGM held on 12 May 2005. His contract terminated on 19 May 2005 and his remuneration is shown until that date. |
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7. |
|
Malcolm Wall left the board on 31 March 2005 and his remuneration is shown until that date. The employers’ pension contribution includes a bonus sacrifice of £100,000 that was reported in 2004. |
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Directors’ pension provision
The tables below provide relevant disclosure in respect of Charles Gregson’s entitlement under a defined benefit scheme, and payments made by the company to defined contribution schemes for David Levin, Nigel Wilson and Malcolm Wall.
Charles Gregson is a member of the United Pension Plan. Normal retirement age under the plan is 60. Charles Gregson’s pension entitlement is two thirds of final pensionable salary, which is calculated as the average of the highest three consecutive pensionable salaries in the ten years prior to retirement. Pensions in payment are increased by 5% per annum or RPI if less. The widow’s pension is two thirds of the individual’s pension.
Under the terms of Charles Gregson’s previous service contract, the definition of pensionable salary included annual bonus up to 50% of base salary. This was a longstanding term of his contract. If his services were terminated by the company without his consent he would be entitled
to an immediate pension calculated as a proportion of his pension entitlement at age 60, based on his final pensionable salary at the date of termination. Charles Gregson will cease to be an active member of the United Pension Plan on 1 April 2006 and will cease to accrue benefits from that date.
Clive Hollick was also a member of the United Pension Plan until 31 March 2005, when a transfer value of £14.73 million was paid to a self-administered scheme. The United Pension Plan has no liability for pension provision to Clive Hollick or his dependants. |
|
Name |
Current
age |
Accrued
pension
31.12.2005
£000 pa |
Increase in
accrued
pension
during the
year ended
31.12.2005
£000 pa |
Transfer value
31.12.2004
£000 |
31.12.2005
£000 |
Increase in
transfer value
for year ended
31.12.2005
less member
contributions
£000 |
Increase in
accrued
pension
during year
ended
31.12.2005
in excess
of inflation
£000 pa |
Transfer value
at 31.12.2005
of increase
in excess
of inflation
less member
contributions
£000 |
|
Charles Gregson |
58 |
371 |
12 |
6,459 |
7,432 |
967 |
4 |
59 |
|
|
|
David Levin, Nigel Wilson and Malcolm Wall are all members of the defined contribution section of the United Group Pension Scheme. The table below shows the total pension contributions paid by the company during the year on behalf of each individual. |
|
Name |
|
Normal
retirement
age |
pension
contribution |
Company
pension
contribution
during
the year
£000 |
|
David Levin |
|
60 |
20% of basic salary |
72 |
Nigel Wilson |
|
60 |
20% of basic salary |
68 |
|
|
|
|
|
Malcolm Wall |
|
60 |
15% of basic salary |
10 |
|
|
|
Directors’ interests in share options |
|
|
Date of
Grant |
Options
held at
1.1.05 |
Exercised/
lapsed during
2005 |
Options
held at
31.12.05
(or date
of leaving
if earlier) |
Exercise
period
from |
Exercise
period
to |
Exercise
price (p) |
Market
price at
date of
exercise (p) |
Total
gain on
exercise |
|
|
David Levin |
|
|
|
|
|
|
|
|
|
|
United 2000
Executive Scheme |
06.04.05 |
- |
|
157,500 |
06.04.08 |
06.04.15 |
532.17 |
|
|
|
|
Nigel Wilson |
|
|
|
|
|
|
|
|
|
|
United 2000
Executive Scheme |
08.08.01 |
104,000 |
- |
104,000 |
08.08.04 |
08.08.11 |
595.70 |
|
|
|
|
08.08.01 |
104,000 |
- |
104,000 |
08.08.05 |
08.08.11 |
595.70 |
|
|
|
|
19.12.01 |
75,000 |
- |
75,000 |
19.12.04 |
19.12.11 |
529.00 |
|
|
|
|
19.12.01 |
75,000 |
- |
75,000 |
19.12.05 |
19.12.11 |
529.00 |
|
|
|
|
22.08.02 |
125,000 |
125,000 |
- |
22.08.05 |
22.08.12 |
277.20 |
563.75 |
£358,188 |
|
|
22.08.02 |
125,000 |
- |
125,000 |
22.08.06 |
22.08.12 |
277.20 |
|
|
|
|
09.04.03 |
120,000 |
- |
120,000 |
09.04.06 |
09.04.13 |
247.25 |
|
|
|
|
05.04.04 |
65,000 |
- |
65,000 |
05.04.07 |
05.04.14 |
500.67 |
|
|
|
United SAYE Scheme |
10.04.03 |
11,060 |
- |
11,060 |
01.06.10 |
01.12.10 |
160.48 |
|
|
|
|
Charles Gregson |
|
|
|
|
|
|
|
|
|
|
United 1994
Executive Scheme |
16.09.96 |
69,252 |
- |
69,252 |
16.09.99 |
16.09.06 |
686.00 |
|
|
|
United 2000
Executive Scheme |
18.12.00 |
52,500 |
- |
52,500 |
18.12.03 |
18.12.10 |
843.00 |
|
|
|
|
18.12.00 |
52,500 |
- |
52,500 |
18.12.04 |
18.12.10 |
843.00 |
|
|
|
|
08.05.01 |
52,500 |
- |
52,500 |
08.05.04 |
08.05.11 |
724.80 |
|
|
|
|
08.05.01 |
52,500 |
- |
52,500 |
08.05.05 |
08.05.11 |
724.80 |
|
|
|
|
19.12.01 |
75,000 |
- |
75,000 |
19.12.04 |
19.12.11 |
529.00 |
|
|
|
|
19.12.01 |
75,000 |
- |
75,000 |
19.12.05 |
19.12.11 |
529.00 |
|
|
|
|
22.08.02 |
125,000 |
- |
125,000 |
22.08.05 |
22.08.12 |
277.20 |
|
|
|
|
22.08.02 |
125,000 |
- |
125,000 |
22.08.06 |
22.08.12 |
277.20 |
|
|
|
|
09.04.03 |
120,000 |
- |
120,000 |
09.04.06 |
09.04.13 |
247.25 |
|
|
|
|
05.04.04 |
65,000 |
- |
65,000 |
05.04.07 |
05.04.14 |
500.67 |
|
|
|
United SAYE Scheme |
10.04.03 |
8,187 |
- |
8,187 |
01.06.08 |
01.12.08 |
160.48 |
|
|
|
|
08.04.04 |
793 |
- |
793 |
01.06.09 |
01.12.09 |
412.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clive Hollick |
|
|
|
|
|
|
|
|
|
|
United 1994
Executive Scheme |
16.09.96 |
153,455 |
153,455 |
- |
16.09.99 |
19.11.05 |
686.00 |
|
|
|
United 2000
Executive Scheme |
18.12.00 |
152,500 |
- |
152,500 |
19.05.05 |
19.05.06 |
843.00 |
|
|
|
|
18.12.00 |
152,500 |
- |
152,500 |
19.05.05 |
19.05.06 |
843.00 |
|
|
|
|
08.05.01 |
152,500 |
- |
152,500 |
19.05.05 |
19.05.06 |
724.80 |
|
|
|
|
08.05.01 |
152,500 |
- |
152,500 |
19.05.05 |
19.05.06 |
724.80 |
|
|
|
|
19.12.01 |
150,000 |
- |
150,000 |
19.05.05 |
19.05.06 |
529.00 |
|
|
|
|
19.12.01 |
150,000 |
- |
150,000 |
19.05.05 |
19.05.06 |
529.00 |
|
|
|
|
22.08.02 |
250,000 |
- |
250,000 |
19.05.05 |
19.05.06 |
277.20 |
|
|
|
|
22.08.02 |
250,000 |
- |
250,000 |
19.05.05 |
19.05.06 |
277.20 |
|
|
|
|
09.04.03 |
120,000 |
- |
120,000 |
19.05.05 |
09.10.06 |
247.25 |
|
|
|
United SAYE Scheme |
31.10.97 |
616 |
- |
616 |
01.02.05 |
01.08.05 |
632.70 |
|
|
|
|
10.04.03 |
5,888 |
- |
5,888 |
19.05.05 |
19.11.05 |
160.48 |
|
|
|
|
Malcolm Wall |
|
|
|
|
|
|
|
|
|
|
United 2000
Executive Scheme |
18.12.00 |
76,000 |
- |
76,000 |
31.03.05 |
31.03.06 |
843.00 |
|
|
|
|
18.12.00 |
76,000 |
- |
76,000 |
31.03.05 |
31.03.06 |
843.00 |
|
|
|
|
08.05.01 |
76,000 |
- |
76,000 |
31.03.05 |
31.03.06 |
724.80 |
|
|
|
|
08.05.01 |
76,000 |
- |
76,000 |
31.03.05 |
31.03.06 |
724.80 |
|
|
|
|
19.12.01 |
75,000 |
- |
75,000 |
31.03.05 |
31.03.06 |
529.00 |
|
|
|
|
19.12.01 |
75,000 |
- |
75,000 |
31.03.05 |
31.03.06 |
529.00 |
|
|
|
|
22.08.02 |
125,000 |
- |
125,000 |
31.03.05 |
31.03.06 |
277.20 |
|
|
|
|
22.08.02 |
125,000 |
- |
125,000 |
31.03.05 |
31.03.06 |
277.20 |
|
|
|
|
09.04.03 |
120,000 |
- |
120,000 |
31.03.05 |
31.03.06 |
247.25 |
|
|
|
|
05.04.04 |
65,000 |
- |
65,000 |
05.04.07 |
05.04.08 |
500.67 |
|
|
|
United SAYE Scheme |
08.04.04 |
457 |
- |
457 |
31.03.05 |
30.09.05 |
412.27 |
|
|
|
|
|
Awards under the 2000 Executive Share Option Scheme (“ESOS”) are granted at market value and awards are generally made on a phased basis.
Options are subject to a performance condition which requires growth in earnings per share to exceed the increase in UK inflation by an average of at least 3% per annum over the period of three years from the date of grant. If this condition is met, options with a face value equal to 0.75 times salary will vest. In order for the whole award to vest, growth in earnings per share must exceed the increase in UK inflation by an average of 5% per annum over the measurement period. A sliding scale applies between these two figures.
The committee considers that the performance condition is in line with market practice at the time the scheme was set up and is appropriately stretching. Options granted prior to 2004 may be re-tested up to six years from the date of grant from a fixed base. No re-testing is permitted of options granted after February 2004.
Options granted under the 1994 Executive Scheme are subject to a performance condition which requires EPS growth to exceed the increase in UK inflation by an average of 2% per annum over a three year period. At the time of the plan’s inception this performance condition was in line with existing market practice. The performance condition has been met in respect of all outstanding options held under the United 1994 Executive Scheme, which are consequently fully vested. All options were granted at market value and for no consideration.
Directors’ interests in the Senior Executive Equity Participation Plan (“SEEPP”)
The SEEPP offers selected senior executives (including executive directors) the opportunity to waive part or all of their annual bonus and receive an interest in shares in the company (“bonus shares”) to the equivalent value. The executive may also be granted a right to acquire further shares (“matching shares”) in the company equal in value to the gross amount of the bonus foregone.
Matching share awards will vest after four years but only to the extent that the associated bonus shares are still held on that date. Matching share awards are also subject to a performance condition which is measured over the four year vesting period. One third of the award may only be exercised if growth in earnings per share during that period exceeds inflation by an average of 3% per annum; a further one third requires such growth to exceed inflation by an average of 5% per annum; the remaining one third requires no performance condition. No re-testing of performance conditions is permitted. These conditions are in accordance with the committee’s policy as outlined above.
Charles Gregson and Nigel Wilson each waived their cash bonuses for 2004 and received awards under the SEEPP which are included in the table below. Following the introduction of the Bonus Investment Plan, no further awards will be made under the SEEPP. |
|
|
|
B shares/
options at
01.01.05+ |
Ordinary
shares/
options at
01.01.05+ |
Ordinary
shares/
options
granted
in 2005 |
B shares/
options
exercised
or lapsed
in 2005 |
Ordinary
shares/
options
exercised
or lapsed
in 2005 |
B shares/
options at
31.12.05+
(or date of
leaving if
earlier) |
Ordinary
shares/
options at
31.12.05+
(or date of
leaving if
earlier) |
Exercisable
from |
Expiry
date |
Market
value † |
Gain on
exercise |
|
Nigel Wilson |
|
- |
59,796 |
- |
- |
- |
- |
59,796 |
11.04.07 |
11.04.13 |
£190,450 |
n/a |
|
|
- |
66,248 |
- |
- |
- |
- |
66,248 |
24.03.08 |
24.03.14 |
£211,000 |
n/a |
|
|
- |
- |
69,270 |
- |
- |
- |
69,270 |
31.03.09 |
31.03.15 |
£220,625 |
n/a |
|
Charles Gregson |
|
15,152 |
19,972* |
- |
15,152** |
19,972 |
- |
- |
18.03.02 |
29.06.07 |
n/a |
£9,170 |
|
|
9,398 |
12,388* |
- |
- |
- |
9,398 |
12,388 |
08.03.03 |
29.06.07 |
£62,481 |
n/a |
|
|
778 |
2,050* |
- |
- |
- |
778 |
2,050 |
03.03.04 |
29.06.10 |
£5,168 |
n/a |
|
|
- |
23,850* |
- |
- |
23,850‡ |
- |
- |
08.05.05 |
08.05.11 |
n/a |
£2,131 |
|
|
- |
5,500* |
- |
- |
- |
- |
5,500 |
16.04.06 |
16.04.12 |
£17,518 |
n/a |
|
|
- |
121,836* |
- |
- |
- |
- |
121,836 |
11.04.07 |
11.04.13 |
£388,048 |
n/a |
|
|
- |
80,924* |
- |
- |
- |
- |
80,924 |
24.03.08 |
24.03.14 |
£257,743 |
n/a |
|
|
- |
- |
47,618* |
- |
- |
- |
47,618 |
31.03.09 |
31.03.15 |
£151,663 |
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Clive Hollick |
|
34,038 |
44,868* |
- |
34,038** |
44,868 |
- |
- |
18.03.02 |
29.06.07 |
n/a |
£206,023 |
|
Malcolm Wall |
|
- |
- |
28,598 |
- |
- |
- |
28,598 |
31.03.05 |
31.03.06 |
£91,085 |
n/a |
|
|
|
Awards becoming exercisable on or after 3 March 2004 were granted under the 2000 SEEPP, which is described above. Awards becoming exercisable prior to 3 March 2004 were granted under the 1996 SEEPP, which operates in a similar manner to the 2000 SEEPP, except that the matching awards are subject to a longer vesting period (up to 7 years) but no performance conditions are attached. At the time the 1996 SEEPP was established, it was not customary to attach performance conditions to matching awards. |
|
Notes |
* |
The directors gave up cash bonuses that would otherwise have been receivable by them in order to receive awards under the SEEPP. For Clive Hollick and Charles Gregson, the bonus was paid to each individual’s Funded Unapproved Retirement Benefit Scheme (“FURBS”) and used by the FURBS Trustees to purchase shares from the SEEPP Trustees at full market value. A matching award was granted over an equal number of shares. The table shows the total bonus shares and matching awards. The bonus shares are included in the directors’ beneficial interest in shares shown on page 33. The amount used to purchase the bonus shares was included in the director’s reported remuneration for the year in which the award was made. |
|
|
** |
Following exercise of the matching awards, the bonus shares cease to have any restrictions attached to them and are no longer considered to form part of the director’s SEEPP interests. |
|
|
+ |
The SEEPP bonus shares/options and matching awards were adjusted to reflect the capital reorganisation which took place on 23 April 2001, whereby every shareholder received 44 B shares and 29 new ordinary shares in place of every 44 ordinary shares previously held. |
|
|
‡ |
The performance condition was not met for awards made in 2001 and consequently two thirds of the matching options under these awards lapsed during 2005. |
|
|
† |
The market value of the matching awards is calculated at 637 pence per share, the closing mid market price on 30 December 2005, and 245 pence per B share. |
|
|
Directors’ interests in Performance Share Plan |
|
|
|
Date of
Grant
|
Options held
at 01.01.05 |
Exercised/
lapsed during
2005 |
Options held
at 31.12.05 |
Exercisable
from |
Expiry
date |
Market
value |
|
David Levin |
|
12.10.05 |
- |
- |
104,000 |
12.10.08 |
12.10.15 |
£662,480 |
|
Nigel Wilson |
|
12.10.05 |
- |
- |
110,395 |
12.10.08 |
12.10.15 |
£703,216 |
|
Charles Gregson |
|
12.10.05 |
- |
- |
55,198 |
12.10.08 |
12.10.15 |
£351,611 |
|
|
|
The Performance Share Plan is described on page 25. The market value of shares is calculated at 637 pence per share, the closing mid market price on 30 December 2005.
Directors’ interests in MTIP |
|
|
Date of
Grant |
Options held
at 01.01.05
|
Granted
during
2005 |
Exercised/
lapsed during
2005 |
Options held
at 31.12.05
(or date of
leaving if
earlier) |
Exercisable
from |
Expiry
date |
Market
value |
|
Nigel Wilson |
|
25.03.04 |
42,641 |
|
- |
42,641 |
01.01.06 |
25.03.11 |
£271,623 |
|
|
31.03.05 |
- |
32,319 |
- |
32,319 |
01.01.07 |
31.03.12 |
£205,872 |
|
Charles Gregson |
|
25.03.04 |
42,503 |
|
- |
42,503 |
01.01.06 |
25.03.11 |
£270,744 |
|
|
31.03.05 |
- |
40,269 |
- |
40,269 |
01.01.07 |
31.03.12 |
£256,514 |
|
|
|
|
|
|
|
|
|
|
|
Clive Hollick |
|
25.03.04 |
91,935 |
|
- |
91,935 |
01.01.06 |
01.01.08 |
£585,626 |
|
|
31.03.05 |
- |
69,681 |
- |
69,681 |
01.01.07 |
01.01.09 |
£443,868 |
|
Malcolm Wall |
|
25.03.04 |
18,329 |
|
- |
18,329 |
01.01.06 |
01.01.08 |
£116,756 |
|
|
31.03.05 |
- |
33,883 |
- |
33,883 |
01.01.07 |
01.01.09 |
£215,835 |
|
|
|
Awards made under the MTIP are in the form of nil cost options over the company’s shares, the number of shares to be calculated using the average share price for the month preceding the start of the relevant financial year. Thus the company’s results for 2004 formed the basis for awards made in 2005, with the number of options granted being calculated by reference to the average share price during December 2003. Awards made in 2005 will vest as to 50% in January 2007 and the balance in January 2008, provided the director remains in the group’s employment. Awards will also vest if employment ceases due to redundancy, disability, injury, death, retirement at or after contractual retirement age, or in other circumstances at the discretion of the remuneration committee. Only purchased shares may be used to fulfil awards under the MTIP. The market value is calculated at 637 pence per share, the closing mid market price on 30 December 2005.
Executive directors are no longer eligible to participate in the MTIP.
Directors’ interest in shares
The interests of the directors in ordinary shares (all of which are beneficial) are shown as at 1 January 2005 (or date of appointment if later), and 31 December 2005 (or date of leaving if earlier). |
|
Director |
|
Ordinary shares
at 01.01.05 |
Ordinary shares
at 31.12.05 |
SEEP
Bonus shares
at 01.01.05 |
SEEP
Bonus shares
at 31.12.05 |
|
David Levin |
|
- |
70,164 |
- |
- |
Nigel Wilson |
|
19,449 |
16,016 |
63,022 |
97,657 |
Charles Gregson |
|
425,622 |
283,721 |
- |
- |
John Botts |
|
12,661 |
15,466* |
- |
- |
Christopher Hyman |
|
815 |
3,969* |
- |
- |
Sandy Leitch |
|
- |
2,270* |
- |
- |
Jonathan Newcomb |
|
8,556 |
11,710* |
- |
- |
Chris Powell |
|
13,341 |
16,026* |
- |
- |
Adair Turner |
|
10,684 |
13,838* |
- |
- |
Geoff Unwin |
|
60,032 |
80,364* |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
Clive Hollick |
|
785,434 |
646,828 |
- |
- |
Malcolm Wall |
|
14,014 |
11,540 |
14,299 |
14,299 |
|
|
|
The share interests as at 31 December 2005 reflect the consolidation of capital that took place on 20 June 2005.
* Interests of non-executive directors include provisional allocations of shares by way of remuneration as described on page 27.
On joining UBM, David Levin was conditionally awarded 28,400 ordinary shares which are included in the table above. Provided he is still employed by UBM he will be entitled to receive 50% of these shares on 6 April 2007 and 50% on 6 April 2008.
As at 31 December 2005 the Trustees of the United Business Media ESOP Trust and the Qualifying Employee Share Trust held 2,142,914 ordinary shares (2004: 2,346,073) and 34,918 B shares (2004: 279,484). Under paragraph 2 of Schedule 13 to the Companies Act 1985 the executive directors are deemed to be interested in these shares.
Changes in directors’ interests since 31 December 2005
There have been no changes to the interests of directors in UBM shares nor in options over UBM shares between 31 December 2005 and 27 February 2006.
The minimum price of ordinary shares during the year was 476.0 pence and the maximum price was 639.0 pence.
Approved by the board and signed on its behalf
Chris Powell
28 February 2006 |
|
|
|
|
|
|
|
|
|