Report on directors' remuneration
Notes contentsThe personnel committee
David Arculus chaired the personnel committee for the year 2009; the other members were Terry Burns, Ken Hydon and Glen Moreno. David Arculus, Terry Burns and Ken Hydon are independent non-executive directors. Glen Moreno, chairman of the board, is a member of the committee as permitted under the Combined Code.
Marjorie Scardino, chief executive, David Bell, director for people, Robin Baliszewski (who replaced David Bell as director for people on 1 September 2009), Robert Head, compensation and benefits director, and Stephen Jones, deputy company secretary, provided material assistance to the committee during the year. They attended meetings of the committee, although no director was involved in any decisions relating to his or her own remuneration.
To ensure that it receives independent advice, the committee has appointed Towers Perrin (now Towers Watson) to supply survey data and to advise on market trends, long-term incentives and other general remuneration matters. Towers Perrin also advised the company on health and welfare benefits in the US and provided consulting advice directly to certain Pearson operating companies.
The committee's principal duty is to determine and regularly review, having regard to the Combined Code and on the advice of the chief executive, the remuneration policy and the remuneration and benefits packages of the executive directors, the chief executives of the principal operating companies and other members of the Pearson Management Committee who report directly to the chief executive. This includes base salary, annual and long-term incentive entitlements and awards, and pension arrangements.
The committee's terms of reference are available on the company's website.
The committee met four times during 2009. The matters discussed and actions taken were as follows:
20 and 27 February 2009 |
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Reviewed and approved 2008 annual incentive plan payouts |
Reviewed and approved 2006 long-term incentive plan payouts |
Approved vesting of 2004 and 2006 annual bonus share matching awards |
Reviewed and approved 2009 Pearson and operating company annual incentive plan targets |
Reviewed and approved 2009 individual annual incentive opportunities for Pearson Management Committee |
Reviewed and approved 2009 long-term incentive awards and associated performance conditions for Pearson Management Committee |
Reviewed and approved 2008 report on directors’ remuneration |
Reviewed strategy on 2009 long-term incentive awards for executives and managers |
Noted company’s use of equity for employee share plans |
Reviewed and approved treatment of David Bell’s outstanding share awards on his retirement from the company on 31 December 2009 |
23 July 2009 |
Approved 2009 long-term incentive awards for executives and managers |
Reviewed committee’s charter and terms of reference |
11 December 2009 |
Reviewed status of outstanding long-term incentive awards |
Considered return on invested capital targets for long-term incentive plan |
Reviewed 2010 annual incentive plan metrics |
Considered Towers Perrin’s report on remuneration for Pearson Management Committee for 2010 |