- Full 2007 Annual Report
- Annual Report
Summary Financial Statement
Summary Remuneration Report
The full Remuneration Report is contained in the 2007 Annual Report at www.smith-nephew.com/investors.
Remuneration policy
The remuneration policy, as approved by the Remuneration Committee, is designed to ensure that remuneration is sufficiently competitive to attract, retain and motivate executive directors and executive officers of a calibre that meets the Group’s needs to achieve its business objectives. Remuneration includes base pay and benefits which are targeted at median competitive levels for acceptable performance, and incentive schemes which are designed to motivate and reward for outperformance. Remuneration packages are benchmarked by reference to appropriate UK and US companies and where relevant other local markets. Individual remuneration levels are based on measurable performance against fair and open objectives and there are no automatic pay adjustments unless required by law or local protocol. Major changes to the remuneration policy are discussed with the Group’s principal shareholders.
Performance graph
As a component company of the FTSE-100 the Company’s Total Shareholder Return (TSR) performance compared to the TSR of the FTSE-100 index is shown below.
Directors’ emoluments and share interests
| Total emoluments(i) | Ordinary share interests | |||
|---|---|---|---|---|
|
2007 £’000 |
2006 £’000 |
31 Dec 2007 Shares | 1 Jan 2007 Shares | |
| Chairman: | ||||
| John Buchanan (appointed Chairman April 2006) | 325 | 235 | 121,131 | 60,351 |
| Executive directors: | ||||
| David J Illingworth, CEO (appointed CEO July 2007) | 1,311 | 790 | 51,045 | 31,855 |
| Adrian Hennah, CFO (appointed CFO June 2006) | 1,063 | 502 | 7,834 | – |
| Non-executive directors: | ||||
| Dr Rolf W H Stomberg | 62 | 56 | 13,092 | 13,092 |
| Warren D Knowlton | 68 | 56 | 59,501 | 54,001 |
| Richard De Schutter | 60 | 47 | 250,000 | 250,000 |
| Dr Pamela J Kirby | 54 | 47 | 8,500 | 8,500 |
| Brian Larcombe | 54 | 47 | 20,000 | 5,000 |
| Former directors: | ||||
| Sir Christopher O’Donnell (retired July 2007) | 974 | 1,358 | ||
- Inclusive of salaries and fees, benefits, annual bonus, pension entitlements and salary supplement in lieu of pension contributions.
- In January 2006 Sir Christopher O’Donnell acquired 50,000 Deferred Shares which are not listed on any stock exchange and have extremely limited rights. On his retirement in July 2007 these shares were transferred to David J. Illingworth.
Directors’ incentives
| Share options | |||||||
|---|---|---|---|---|---|---|---|
| 1 Jan 2007 | Granted | Lapsed | Exercised | Profit on Exercise (£) |
31 Dec 2007 or on ceasing to be a director |
||
| David J Illingworth | 364,515 | 210,504 | (110,157) | – | – | 464,862 | |
| Adrian Hennah | 103,686 | 73,934 | – | – | – | 177,620 | |
|
Sir Christopher O’Donnell (retired July 2007) |
920,121 | 160,294 | (199,365) | – | – | 881,050 | |
| Long-term incentive plans | |||||||
|---|---|---|---|---|---|---|---|
| 1 Jan 2007 | Awards | Value Awarded £’000 | Lapsed | Vested | Value Vested £’000 |
31 Dec 2007 or on ceasing to be a director |
|
| David J Illingworth | 238,150 | 245,696 | 1,527 | (33,700) | (48,355) | 280 | 401,791 |
| Adrian Hennah | 161,289 | 107,740 | 675 | – | – | – | 269,029 |
|
Sir Christopher O’Donnell (retired July 2007) |
369,136 | 258,397 | 1,413 | (332,114) | (84,815) | 326 | 210,604 |
Under the Co-investment Plan, subject to the growth in ESPA over a three year period, at 31 December 2007, David J Illingworth would be eligible for up to 57,650 shares, Adrian Hennah would be eligible for up to 27,042 shares and at his date of retirement Sir Christopher O’Donnell would be eligible for up to 70,510 shares.