Remuneration arrangements during
the year ended 31 March 2011
for executive directors

Balance between fixed and performance-related components

The relative proportions of fixed and performance-related remuneration for the Chief Executive and the Chief Financial Officer are shown below. These are valued at both target and stretch performance levels, including base salary, annual bonus and the award value of the long-term incentives.

Target performance and Stretch performance (pie charts)

Chief Executive’s remuneration package

The Committee has agreed the following changes to the Chief Executive’s remuneration package, to align these components with the new executive remuneration policy agreed in 2010, which is already applicable to the Chief Financial Officer:

Annual bonus (changes effective for year ending 31 March 2012)

  • Annual bonus payable for performance at threshold will reduce from 10% of base salary to 0% of base salary;
  • Maximum annual bonus, payable for outstanding performance, will increase from 150% to 175% of base salary; and
  • The portion of any annual bonus payment that exceeds 100% of base salary will be delivered in the form of Tate & Lyle PLC shares, which are deferred for two years and subject to service conditions.

The Chief Executive will continue to be entitled to a 75% target bonus to respect the arrangements agreed upon his recruitment.

Long-term incentive – Performance Share Plan (changes effective for grant in 2012)

  • The level of vesting at threshold performance will reduce from 25% of the award to 15%. The award level remains at 300% of base salary, the level agreed when Javed Ahmed was recruited in 2009.

The Chief Executive’s shareholding target will remain at 4x base salary; he has already met this target.

Summary of remuneration components

The current remuneration package for executive directors consists of base salary, annual bonus, long-term incentives, and retirement and other benefits as follows:

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Component

Objective

 

Summary

1

In accordance with the special arrangements that were put in place to facilitate his recruitment, the Chief Executive can earn a bonus of up to 150% of base salary which is not subject to deferral. With effect for the year ending 31 March 2012, the Chief Executive’s threshold, target and maximum annual bonus will be 0%, 75% and 175% of base salary respectively, with the portion of bonus above 100% of base salary deferred into shares for two years. The change in the maximum and threshold bonus potential and deferral of bonus will align these elements with the new policy.

2

In accordance with the special arrangements that were put in place to facilitate his recruitment, the Chief Executive’s award level is set at 300% of base salary, with 25% vesting at threshold performance. With effect from the long-term incentive grant scheduled for 2012, the level of vesting at threshold performance for the Chief Executive will reduce to 15% of the award, to align it with the new policy.

Base salary

Reflects market value of the individual, their skills and experience and performance.

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Reviewed annually with changes usually taking effect on 1 April.
Benchmarked against relevant comparators, primarily the 50th to 130th ranked companies of the FTSE index.
Base salary reviews take into account pay increase levels for employees below the executive level, and the impact on pension and other consequences of increases.
Positioned around the median of the relevant market, taking account of personal performance.

Annual bonus

Rewards the achievement of the annual performance objectives of the Company.

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Three performance metrics apply: sales, profit and cash conversion.
Greatest weighting is on profit, and a minimum profit hurdle also applies before any bonus is payable against any of the metrics.
Targets for each metric are set at the start of each financial year, taking account of the business strategy, performance in previous years, market expectations and the prevailing economic climate.
The Chief Financial Officer’s threshold, target and maximum annual bonuses are 0%, 50% and 175% of base salary, respectively. The equivalent figures for the Chief Executive, in accordance with the special arrangements that were put in place to facilitate his recruitment, are 10%, 75% and 150% of base salary.1
For the maximum bonus to be payable, performance in all three metrics is required to be outstanding.
The portion of any annual bonus above 100% of base salary is delivered in Tate & Lyle PLC shares1 which are deferred for two years; these do not benefit from any matching.
The Committee can ‘claw back’ bonus in the exceptional event of misstatement of results or gross misconduct.

Long-term
incentives

Rewards sustained performance, and helps retain talent.

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Awards in the form of performance shares that vest after three years, subject to demanding performance requirements.
Two performance metrics apply: earnings per share growth and percentage return on capital employed.
Maximum annual award size is currently 250% of base salary2, although the Committee may make awards up to 300% of base salary if necessary to ensure market competitiveness and taking account of Group performance. However, only 15% of the award vests at threshold performance2. Outstanding performance is required for 100% vesting.

Shareholding requirement

Ensures alignment with shareholders.

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The Chief Executive and the Chief Financial Officer have target holdings of four and three times base salary respectively.

Pension

Provides competitive pension, with low risk to the Company.

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Only base salary is pensionable for executive directors.
The Chief Executive has a defined contribution cash allowance of 35% of base salary.
The Chief Financial Officer had a defined benefit of 1/38th of final salary (3% employee contribution) until 5 April 2011, which from 6 April 2011 changes to a cash allowance of 25% of base salary.

Other benefits

Provide competitive benefits.

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These include car (or car allowance) benefit, health insurance, group income protection and, where appropriate, life cover.

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© 2011 Tate & Lyle - All rights reserved. Tate & Lyle PLC is a public limited company listed on the London Stock Exchange and registered in England.
The Business review and Governance section make up the Directors’ Report. This part of the Annual Report sets out the information on the Group’s principal activities,
together with a review of the development and performance of the Group, including financial performance, in accordance with Section 417 of the Companies Act 2006.