Introduction

This part of the Directors' Remuneration Report sets out the Directors' remuneration paid in respect of the 2017 financial year. It sets out the payments to Directors and details of the link between Company performance and remuneration of the Chief Executive Officer. This part, together with the "Description of the Remuneration Committee" section constitutes the Annual Report on Remuneration, and will be put to an advisory shareholder vote at the Company's AGM.

Highlights for 2017 (audited)

This table briefly summarises the highlights of the Directors' remuneration arrangements for the financial year.

Base Pay and BenefitsPensionAIPLong-Term IncentivesAll-Employee Schemes
Base pay increase of 2.75% for the Executive Directors, in line with other employees.
Non-Executive Directors fees were not changed in the period.
No change to taxable benefits.
Company contributions to pensions for Executive Directors, which are currently significantly below the maximum provided for under the 2017 Policy, did not change during the period.Total bonus earned by Executive Directors for 2017 based on achievement of 41.5% to 42% of performance target, was £745,282 (2016: £759,953).Awards were granted under the LTIP.
For the 2015 LTIP awards, which are due to vest in March 2018, achievement was 25%.
Ongoing participation in the SIP and Sharesave schemes.
Sharesave options lapsed during the period.
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Total Director Remuneration (audited)

The total remuneration paid to all of the Directors during the period was £3,531,000. The detailed remuneration breakdown for the Executive Directors and the Non-Executive Directors is set out separately.

Seabass

Executive Directors

Total Remuneration (audited)

The total remuneration for the period for each of the Executive Directors is set out in the table below. Total cash-based remuneration paid to the Executive Directors was £2,488,000 in 2017, which was 0.6% higher than in 2016 (£2,472,000). 

Tim SteinerNeill AbramsDuncan Tatton-
Brown
Mark RichardsonTotal
2017
£'000
2016
£'000
2017
£'000
2016
£'000
2017
£'000
2016
£'000
2017
£'000
2016
£'000
2017
£'000
2016
£'000
Salary5895723052973643543643541,6221,577
Taxable Benefits4211111175
Pensions4746302626281231115131
Total Fixed Pay6406203363243913833773861,7441,713
AIP310315129132153156152156744759
Total Remuneration in cash9509354654565445395295422,4882,472
Share Plans
JSOS
LTIP21018665689710297102469458
GIP
ESOS
2014 ESOS
SIP433313
Sharesave
Total for Share Plans2141866868100102100102482458
Recovery of Sums Paid
Total Remuneration1,1641,1215335246446416296442,9702,930
  1. The value of LTIP awards for 2014 included in the column for the 2016 financial year has been restated to show the actual vested amount (based on the vesting of the award on 31 March 2017 at a price of 249.007 pence per share). The actual vested amount is £48,500 lower than the estimated vested amount stated in the 2016 annual report of £507,000. The estimated vested amount was based on the three-month average share price from 1 September 2016 to 27 November 2016 of 275.42 pence per share. No dividends were paid.
  2. The value of LTIP awards for 2015 included in the column for the Financial Year has been estimated based on 25% vesting and the three-month average share price from 1 September 2017 to 3 December 2017 of 288.239 pence per share, as these awards are not capable of vesting until after the end of the period, on 22 March 2018. This value assumes no dividends will be payable. The value assumes that the participant will not be required to pay an amount to acquire the conditional shares, being the nominal price of 2 pence per share. These estimated figures will be restated in next year's annual report.
  3. A savings contract under the Sharesave scheme matured on 1 December 2016. A value of nil is shown in the table for this award, which is explained here.
  4. Under the Share Incentive Plan, awards of Free Shares and Matching Shares became unrestricted during the period. These awards are explained here.

An explanation of each element of remuneration paid in the table is set out in the following section.

The Company has obtained a written confirmation from each Executive Director that they have not received any other items in the nature of remuneration from the Group, other than those already disclosed in this report.

Base Salary (audited)

During the period, the Remuneration Committee reviewed the salaries of the Executive Directors. After taking into account a number of relevant factors which are discussed in more detail below, the Remuneration Committee recommended that all basic salaries be increased. The following table shows the change in each Executive Director's salary.

DirectorSalary 2017
(£)
Salary 2016
(£)
Effective from
Tim Steiner594,000577,8301 April 2017
Duncan Tatton-Brown367,000357,2041 April 2017
Mark Richardson367,000357,2041 April 2017
Neill Abrams308,000300,0001 April 2017

The changes to base salary were made in line with the Directors' Remuneration Policy. The Executive Directors received an increase in base pay of 2.75% (rounded accordingly) which was in line with the percentage salary increases for the monthly paid employees of the Group in the period. The increases, which position the salaries broadly around the market median for a company of the Company's size and complexity, also aim to help retain the Executive Directors.

Taxable Benefits (audited)

The Executive Directors received taxable benefits during the period, notably private medical insurance and travel insurance. The Executive Directors also received other benefits, which are not taxable, including income protection insurance, life assurance and Group-wide employee benefits, such as an employee discount. The remuneration arrangements for the Executive Directors do not include a Company car or car cash allowance, but the Executive Directors have access to a chauffeur to drive a car for the purposes of attending business meetings. Non-business use of the chauffeur is tracked and is shown as a taxable benefit in the total remuneration table to the extent it was used for that purpose. These benefits arrangements were made in line with the Directors' Remuneration Policy which allows the Company to provide a broad range of employee benefits.

Pensions (audited)

The Company made pension contributions on behalf of the Executive Directors to the defined contribution Group personal pension scheme. The employer contributions to the pension scheme in respect of each Executive Director are made in line with the Group personal pension scheme for all employees (the Company contributions being, for employees and Executive Directors joining the pension scheme before May 2013, from 3% up to 8%, for employees joining the scheme after May 2013, from 3% up to 6%, depending on the number of years the employee or Executive Director has participated in the scheme and for employees and Executive Directors joining the scheme after October 2017 up to 7%). The contributions during the period made on behalf of the Executive Directors were 8% of base salary. These contributions were made in line with the Directors' Remuneration Policy which allows the Company to make employer contributions of up to 30% of base salary.

Pension contributions can be made to the Executive Directors (and any other employee) as a cash allowance where the Executive Director (or employee) has reached either the HMRC annual tax free limit or HMRC lifetime allowance limit for pension contributions as provided for in the Directors' Remuneration Policy. In accordance with this policy, Tim Steiner, Mark Richardson and Neill Abrams have elected to receive their part of their pension contributions as an equivalent cash allowance. Duncan Tatton-Brown has elected to receive all of his pension contribution as cash in line with the Company policy.

Annual Incentive Plan (audited)

The Remuneration Committee re-examines the design of the AIP each year to incentivise the delivery of key business objectives and individual performance for that financial year. The 2017 AIP was based on the performance targets and weightings set out below. Financial performance measures, namely Gross Sales (Retail)A and EBITDAA for the Group, were the primary targets, with 70% of the annual bonus being determined by performance against targets set by the Remuneration Committee at the start of the financial year, by reference to the Company's budget for the period. Of the balance, 30% related to individual objectives for each of the Directors, largely independent of the financial objectives. The Remuneration Committee has agreed "threshold" and "maximum" conditions that must be achieved. A bonus is not payable unless a "threshold" level of the performance condition has been achieved. At "threshold" performance for a financial performance measure, 8.75% of total bonus is payable and at "maximum" performance, 35% of total bonus is payable. A straight-line sliding scale will apply in relation to the intermediate points between the "threshold" and "maximum". Each target was discrete and could be earned separately. The Chief Executive Officer had a maximum bonus opportunity of 125% of salary and the other Executive Directors had a maximum opportunity of 100% of salary.

Tim SteinerDuncan Tatton-BrownMark RichardsonNeill Abrams
Financial objectives
EBITDAA (% of total target)35353535
Gross Sales (Retail)A (% of total target)35353535
Individual objectives
(% of total target)30303030
Examples of business area objectives1.Deliver/progress key projects including new CFCs and technologyDrive sufficient cost challenge for operational programmesIncrease capacity at Andover CFCSupport all Ocado Solutions contractual negotiations
2.Increase business development capability in Ocado SolutionsPrepare and execute a financing strategy for future growthLaunch Morrisons store pickEnsure head office functions continue to service changing business needs

Financial Targets and Individual Targets

Each Executive Director had five to six individual objectives, with different weightings, under the plan. They related to specific programmes relevant to each Executive Director's business area for which they have primary responsibility. All of the Executive Directors had an individual objective which concerned the strategic plans for the Ocado Solutions business. The Remuneration Committee also considered environmental, social and governance issues when setting the individual objectives, in particular for Neill Abrams who has responsibility for the Group's CR policy. The Remuneration Committee reviewed the performance of each Executive Director against the measurable performance metrics and based their judgement on a scoring report by the Chief Executive Officer and the Chairman.

The Group’s Gross Sales (Retail)A were £1,429.1 million for 52 weeks, which was above the ‘‘threshold” of £1,400 million set under the 2017 AIP. The Group’s EBITDAA (pre-exceptional items) for 52 weeks was £84.3 million, which was below the “threshold” of £88 million set under the 2017 AIP. 

The Remuneration Committee, in assessing performance, took into account the level of the Group's trading performance compared with UK grocery retail peers and the Group's progress against its strategic objectives. All Executive Directors met to some extent their individual objectives, with achievement being scored between 81% and 83% of maximum.

DirectorFinancial TargetsIndividual ObjectivesTotal Payment
Gross Sales (Retail)AGroup EBITDAA
TargetPerformanceAchievementTargetPerformanceAchievementPerformanceAchievement
ThresholdMaximumActual% bonus% salaryThresholdMaximumActual% bonus% salary% bonus% salary% salary£'000
Tim Steiner£1,400m£1,490m£1,429.1m17.2%21.5%£88m£96m£84.3m0%0%Note 124.6%30.8%52.3%£310
Duncan Tatton-Brown£1,400m£1,490m£1,429.1m17.2%17.2%£88m£96m£84.3m0%0%Note 124.6%24.6%41.8%£153
Neill Abrams£1,400m£1,490m£1,429.1m17.2%17.2%£88m£96m£84.3m0%0%Note 124.8%24.8%42%£129
Mark Richardson£1,400m£1,490m£1,429.1m17.2%17.2%£88m£96m£84.3m0%0%Note 124.3%24.3%41.5%£152
  1. There is no threshold or maximum target set for the individual objectives. Each objective is weighted and scored to provide a total score out of 30. Performance may range from zero to 30.
  2. The applicable salary used for calculating the bonus payment under the rules of the 2017 AIP is the applicable base salary on the date of payment.

Disclosure of Targets

The threshold and maximum targets and achievement against the targets have been disclosed in respect of the financial targets for the AIP. A broad description of some of the Executive Directors' individual objectives has been provided, but specific details concerning the individual objectives and performance against them has not been disclosed in this report. Although the Remuneration Committee is conscious of the regulations and the Code requirement that performance targets should be transparent, it considers that the individual objectives were and remain commercially sensitive to the Company and if disclosed could damage the Company's commercial interests. These individual objectives mostly relate to important business strategies and actions and consequently could hinder the progress of the business or the Group's competitive advantage if publicly disclosed. The Remuneration Committee does not expect to disclose this information at a later date. The Remuneration Committee believes that the targets were stretching and have been rigorously applied.

Summary of Bonus Earned

The Remuneration Committee has, in accordance with the Directors’ Remuneration Policy and the rules of the 2017 AIP, recommended an aggregate bonus payment under the plan for the period of £745,282 (2016: £759,953), based on achievement between 41.5% and 42% of maximum (2016: achievement of 43% to 44% of maximum). The Remuneration Committee believes that this level of bonus payment appropriately reflects the performance of the business and individual performance during the period, which saw strong sales and customer growth and progress with strategic objectives, but which saw Group EBITDAA in line with prior year due to increased costs. The table above summarises the bonus payments for each Executive Director for the 2017 AIP. The cash payments are expected to be made in February 2018. No amount has been deferred to a later date given that under the rules of the AIP deferral does not apply as all of the Executive Directors have met the minimum shareholding expectations under the Directors’ Remuneration Policy.

Long Term Incentives and Share Plans

Awards granted under long-term incentive plans and share plans only count towards the total remuneration figure for the period in which they vest or where achievement of performance targets is determined in the period. Awards under most of the Company's share plans are subject to three-year vesting periods and therefore awards made or exercised during the period will not necessarily be reflected in the total remuneration figure for this period. Further details on all the existing share incentives held by the Executive Directors are set out below.

LTIP

The LTIP is the primary long-term incentive for the Executive Directors. The LTIP awards help reward the Executive Directors for the delivery of long-term business objectives. 

The three-year performance period for the 2015 LTIP awards expired at the end of the financial year. The Remuneration Committee reviewed the performance against the four equally weighted performance conditions for the 2017 financial year. The four performance conditions for the 2015 LTIP awards were retail RevenueA, adjusted retail EBT*, platform operational efficiency and platform capital efficiency.

Retail Revenue represented 25% of the award. As noted in the Chief Financial Officer's Review, the retail Revenue for the period was £1,317.4 million for 52 weeks, which was an increase of 12.4% on 2016 and an increase of 27.4% between 2015 and 2017, but which fell below the threshold of £1,330.0 million set under the LTIP award. The revenue used as a performance criteria for the LTIP includes retail revenue generated by Ocado.com and the other retail sites – Fetch, Sizzle and Fabled – but excludes revenue from Morrisons and the Solutions business. Consequently, achievement against this performance target was nil.

Adjusted retail EBT* for the period was £12.8 million, which fell below the threshold of £14.8 million set under the LTIP award. This measure is not consistent with the segmental reporting changes made in 2017. The performance target for adjusted retail EBT* is based on Group EBT less an apportionment of certain costs in a number of areas relating to the Solutions business and based on 52 weeks. Consequently, achievement against this performance target was nil.

Platform operational efficiency and platform capital efficiency represented 25% of the award each and achievement against each was 0% and 25% respectively. Specific details of achievement against these targets has not been disclosed in this report, although overall achievement has been. The first concerns the operational efficiency of the platform solution for the Financial Year and the second covers the capital cost for the platform. Although the Remuneration Committee is conscious of the regulations and the Code requirement that performance targets should be transparent, it considers that disclosure of the achievement against these specific targets remains commercially sensitive to the Company and if disclosed could damage the Company’s commercial interests. The Remuneration Committee believes that the targets were stretching and have been applied vigorously.

Accordingly, the Remuneration Committee has, in accordance with the Directors’ Remuneration Policy and the rules of the LTIP, recommended overall vesting of 25% for the 2015 LTIP awards. The Remuneration Committee believes that this level of vesting appropriately reflects the performance of the business during the performance period. Details of performance are set out in the table below.

The value of the 2015 LTIP awards in the total remuneration table is estimated based on the average Company share price for the final three months of the period, being 288.239 pence per share.

The expected vesting date of the 2015 LTIP award is 22 March 2018. Subject to the continued satisfaction of the award conditions, final vesting will be determined.

None of the 2015 LTIP awards that vest will be subject to deferral as they were awarded to participants under the 2014 directors’ remuneration policy and therefore are not subject to deferral.

DirectorRetail RevenueAdjusted retail EBT*Platform Operational EfficiencyPlatform Capital EfficiencyTotal vesting
TargetPerformance AchievementTargetPerformance AchievementPerformance AchievementPerformance Achievement
ThresholdMaximumActual% of MaximumThresholdMaximumActual% of Maximum% of Maximum% of Maximum% of
Maximum
£'000
Tim Steiner£1,330.0m£1,430.0m£1,317.40%£14.8m£22.8m£12.8m0%0%25%25%£210
Duncan Tatton-Brown£1,330.0m£1,430.0m£1,317.40%£14.8m£22.8m£12.80%0%25%25%£97
Neill Abrams£1,330.0m£1,430.0m£1,317.40%£14.8m£22.8m£12.80%0%25%25%£65
Mark Richardson£1,330.0m£1,430.0m£1,317.40%£14.8m£22.8m£12.80%0%25%25%£97
  1. The Remuneration Committee has agreed "threshold" and "maximum" conditions that must be achieved. An award will not vest unless a "threshold" level of the performance condition has been achieved. At "threshold" performance for a financial performance measure, 6.25% of the total award will vest and 25% vesting will occur for achieving or exceeding "maximum" performance for a condition. A straight-line sliding scale applies in relation to the intermediate points between the "threshold" and "maximum".
  2. Details of the number of conditional shares awarded to each Director for the 2015 LTIP awards are shown in the table on here.
  • This measure is used by the Remuneration Committee to assess management performance for the 2015 LTIP only. It is not considered an Alternative Performance Measure.

Sharesave

A three-year savings contract under the Sharesave scheme matured on 1 December 2016. Tim Steiner, Duncan Tatton-Brown and Neill Abrams each held 2,987 Sharesave options at this date. At the date of vesting, the share price of 264 pence per share was lower than the exercise price of 301 pence per share, meaning that the options had no value on vesting. During the exercise period, which ended in May 2017, the share price did not rise higher than the exercise price, and therefore the options lapsed and the Directors withdrew the value of their savings of £9,000 each. Accordingly, a value of nil is shown in the Directors' remuneration table.

Share Incentive Plan

The 2014 award of free shares made under the SIP became unrestricted during the period on 10 September 2017. Certain matching shares also became unrestricted during the period. Free shares and matching shares awarded under the SIP are subject to a three-year forfeiture period starting from the date of grant. This means that if an Executive Director ceases to be employed by the Group during the three-year period, the free shares and matching shares will be forfeited. Partnership shares purchased under the SIP are not included in the total remuneration table as these are purchased by the Executive Directors from their salary, rather than granted by the Company as an element of remuneration. Only the value of free shares and matching shares that became unrestricted during the period are shown in the total remuneration table. This is the first period in which shares became unrestricted. The value shown is the value of the shares on the date that they became unrestricted. Unrestricted shares can be held in Trust under the SIP for as long as the participant remains an employee of the Company.

Recovery of Sums Paid (audited)

No sums paid or payable to the Executive Directors were sought to be recovered by the Group.

Non-Executive Directors

Total Fees (audited)

The fees paid to the Non-Executive Directors and the Chairman during the period are set out in the remuneration table below. With the exception of Robert Gorrie (who received other remuneration as set out below), the Non-Executive Directors received no remuneration from the Group other than their annual fee.

Non-Executive DirectorFeesTaxable
Benefits
Pension EntitlementsAnnual
Bonus
Long-Term IncentivesRecovery of Sums PaidTotal Remuneration
2017
£'000
2016
£'000
2017
£'000
2016
£'000
2017
£'000
2016
£'000
2017
£'000
2016
£'000
2017
£'000
2016
£'000
2017
£'000
2016
£'000
2017
£'000
2016
£'000
Lord Rose
2002001,3342001,534
Ruth Anderson62616261
Jörn Rausing50495049
Douglas McCallum62616261
Andrew Harrison50375037
Emma Lloyd5050
Robert Gorrie
25492549
Alex Mahon
62566256
Total5615431,3345611,847
  1. The Chairman’s Share Matching Award of 452,284 shares vested on 10 May 2016. It was a one-off award made on Lord Rose’s appointment as Chairman of the Board. The value on vesting was calculated using the closing share price of 295 pence per share on the day of vesting. Further details of the award can be found in the 2016 annual report.
  2. David Grigson retired from the Board with effect from the 2016 annual general meeting. His fee in the prior year was £30,000.
  3. Robert Gorrie retired from the Board with effect from the 2017 annual general meeting on 3 May 2017.
  4. Alex Mahon retired from the Board with effect from 13 December 2017. The fees paid during 2017 are therefore her full fee and the following period’s fees will be disclosed in the 2018 annual report.

The remuneration arrangements for the Non-Executive Directors (except the Chairman) were reviewed by the Executive Directors and the Chairman during the period and the basic fees for non-executive directors were not changed (2016: £50,000).

The review was carried out by the Executive Directors and Chairman in accordance with the Directors' Remuneration Policy and accordingly took into account the responsibility and time commitments of the roles of the Non-Executive Directors and Board committee chairmen, the financial position and trading performance of the business, and the appropriate benchmark data (provided by Deloitte) for comparable roles for companies of equivalent size and complexity to the Group.

The Chairman's fee was reviewed by the Remuneration Committee and was not changed. The Chairman's fee has not changed since the Chairman's appointment in March 2013.

Other Remuneration for the Non-Executive Directors (audited)

In addition to the fees, the Non-Executive Directors are entitled to a staff shopping discount in line with the Group's employees.

Until his retirement from the Board, Robert Gorrie chaired the meetings of the Ocado National Council and occasionally provided advice on various employee matters, in addition to his role as a Non-Executive Director. He provided these services through Robert Gorrie Limited (of which he is the sole shareholder) and was paid a per diem fee for these services. These fees are included in the related party transactions with key management personnel in Note 5.4 to the consolidated financial statements.

The Company has obtained a written confirmation from each Non-Executive Director that they have not received any other items in the nature of remuneration from the Group, other than those already referred to in this report.

Recovery of Sums Paid (audited)

No sums paid or payable to the Non-Executive Directors were sought to be recovered by the Group.

Other Remuneration Disclosures

Executive Directors' Service Contracts

Each of the Executive Directors has a service contract with the Group. The terms of these contracts are consistent with the Directors' Remuneration Policy, though the contracts provide for payment in lieu of notice of one times basic salary only (and do not include other fixed elements of pay, which are permitted by the policy). The service contracts for each of the Executive Directors are continuous until terminated by either party (on 12 months' notice if terminated by the Company, or six months' notice if terminated by the Director).

Non-Executive Directors' Letters of Appointment

The Chairman and the Non-Executive Directors do not have service contracts and were appointed by letter of appointment for an initial period of three years, subject to annual re-appointment at the annual general meeting. There are no provisions in the letters of appointment for payment for early termination. A Non-Executive Director appointment may be terminated by either party giving to the other not less than one month's notice, except in the case of the Chairman, which requires six months' notice by either party. A copy of a pro forma Non-Executive Director letter of appointment is available on the Company's corporate website. Copies of the letters of appointment and the service contracts of the Executive Directors are available for inspection at the Company's registered office.

Deferral or Holding Periods (audited)

The 2017 Directors' Remuneration Policy introduced a holding period of two years from the third anniversary of the date of grant under the LTIP. This is explained in the Remuneration Policy Report.

Under the AIP, up to 50% of any bonus payment will be deferred into shares, vesting after a period of three years, to the extent that an Executive Director does not meet the minimum shareholding.

The other Executive Director share schemes (including the GIP) do not contain any requirements for Directors to retain shares post vesting. However, the Remuneration Committee feels that their absence is materially mitigated by the existing large shareholdings held by the Executive Directors in the Company and by the five-year vesting period that applies to the GIP. Such factors help create a longer term focus from the Executive Directors and strong alignment with shareholders, as envisaged by Code principle D.1.

Director Retirement Arrangements and Payments for Loss of Office (audited)

As announced on 18 November 2016 and 14 December 2017, it was determined in accordance with the 2014 Directors' Remuneration Policy and the Directors' Remuneration Policy respectively that the arrangements set out below should apply in relation to Robert Gorrie's and Alex Mahon's remuneration on retirement.

Element of RemunerationTreatment
Remuneration PaymentsAll outstanding fees were paid to Robert Gorrie up to 3 May 2017 in accordance with the terms of his letter of appointment. No payments are expected after the date of retirement, although Robert Gorrie was continued to be paid a fee for services to the Group not in a Director capacity (as explained on above).
All outstanding fees were paid to Alex Mahon up to 13 December 2017 in accordance with the terms of her letter of appointment. No payments are expected after the date of retirement.
Payment for Loss of OfficeNo payment for loss of office or other remuneration payment was made or is expected to be made to Robert Gorrie or Alex Mahon.
Share SchemesAt the time of retirement, neither Robert Gorrie nor Alex Mahon was a participant in a Group share scheme.

Fruit and veg

Director Appointment Arrangements (audited)

As announced on 18 November 2016, Emma Lloyd was appointed to the Board as a Non-Executive Director with effect from 1 December 2016. Emma Lloyd's remuneration is in line with the Directors' Remuneration Policy. On appointment, Emma Lloyd's basic annual fee was £50,000, which was in line with the other Non-Executive Directors. Emma Lloyd will not receive any other benefits or payments, in line with the Directors' Remuneration Policy.

Payments to Past Directors (audited)

The Company does not have any arrangements for payments to any former Directors of the Company.

Enforcing the Directors' Remuneration Policy

The Company has not made any payments to a Director outside of the Directors' Remuneration Policy. All of the decisions regarding executive remuneration for the period have been made in line with the Directors' Remuneration Policy.

No Director has options over Company shares outside one of the Company's recognised share schemes.

External Remuneration for Executive Directors

As at the date of this Annual Report:

  • In addition to his role as Executive Director of the Company, Neill Abrams is an alternate non-executive director of Mr Price Group Limited, listed on the Johannesburg Stock Exchange. The role does not involve any remuneration paid or payable to Neill.
  • In addition to his role as Executive Director of the Company, Duncan Tatton-Brown is an independent non-executive director, senior independent director and audit committee chairman of Zoopla Property Group plc, listed on the London Stock Exchange. For his services to Zoopla Property Group plc Duncan was paid a fee of £65,000 in 2017.
  • In addition to his role as Executive Director of the Company, Mark Richardson is a non-executive director of Paneltex Limited. This role does not involve any remuneration paid or payable to Mark.

Director Shareholdings (audited)

The table below shows the beneficial interests in the Company's shares of Directors serving at the end of the period, and their connected persons, as shareholders and as discretionary beneficiaries under trusts. The table also shows current compliance with the Director shareholding requirements in the Directors' Remuneration Policy as at the date of this Annual Report. All Directors comply with the Director shareholding requirements.

DirectorOrdinary Shares of 2 Pence each held at 3 December 2017Ordinary Shares of 2 Pence each held at 27 November 2016Minimum Shareholding Requirement (% of Base Salary or Fee)
Complied with Shareholding Requirement
Basis for compliance
Direct HoldingIndirect HoldingDirect HoldingIndirect Holding
Tim Steiner15,245,05214,293,13015,205,55714,292,464200YesIndirect and direct shareholdings
Lord Rose1,202,2841,202,284100YesIndirect and direct shareholdings
Duncan Tatton-Brown583,04161,869561,36361,247200YesIndirect and direct shareholdings
Mark Richardson265,5306,994243,8086,328200YesJSOS and SIP interests
Neill Abrams768,8671,319,704754,3861,319,048200YesDirect shareholdings
Ruth Anderson80,00080,000100YesDirect shareholdings
Andrew Harrison18,16611,500100YesDirect shareholdings
Emma Lloyd17,300100YesDirect shareholdings
Douglas McCallum100,000100,000100YesDirect shareholdings
Jörn Rausing69,015,60269,015,602100YesIndirect shareholdings
Alex Mahon17,35517,355100YesDirect shareholdings
  1. The indirect holding for Neill Abrams includes holdings of Caryn Abrams (wife of Neill Abrams) who holds 79,701 (2016: 79,701) ordinary shares, Daniella Abrams (daughter of Neill Abrams) who holds 1,363 (2016: 1,363) ordinary shares, Mia Abrams (daughter of Neill Abrams) who holds 1,363 (2016: 1,363) ordinary shares, Joshua Abrams (son of Neill Abrams) who holds 1,363 (2016: 1,363) ordinary shares and as a discretionary beneficiary of a trust holding 133,100 (2016: 133,100) ordinary shares.
  2. The indirect holding for Duncan Tatton-Brown includes a holding by Kate Tatton-Brown (wife of Duncan Tatton-Brown) who holds 59,889 (2016: 59,934) ordinary shares.
  3. The indirect holding for Mark Richardson includes a holding by Rebecca Richardson (wife of Mark Richardson) who holds 4,970 (2016: 4,970) ordinary shares.
  4. There have been no changes in the Directors' interests in the shares issued or options granted by the Company and its subsidiaries between the end of the period and the date of this Annual Report, except shares held pursuant to the SIP, as set out on below. There have been no changes in the Directors' beneficial interests in trusts holding ordinary shares of the Company.
  5. No Director had an interest in any of the Company's subsidiaries at the beginning or end of the period.
  6. Tim Steiner has granted a security interest over his ordinary shares in the Company. The security interest was granted in connection with a loan made to him. For further details, refer to the Company's announcement made on 28 November 2016. The security interest was granted over 15,197,812 ordinary shares in the Company and any further ordinary shares held by Tim Steiner from time to time. Arthur Seligman as trustee of the Steiner 2008 Millennium Trust, of which Tim Steiner is one of a number of discretionary beneficiaries, granted a security interest over 14,291,200 ordinary shares in the Company. On 24 November 2017, Arthur Seligman, as trustee of the Steiner 2008 Millennium Trust, transferred the 14,291,200 ordinary shares in the Company to Linic Ltd, a company wholly owned by Arthur Seligman, as trustee of the Steiner 2008 Millennium Trust. The existing security interest over the shares was therefore released and a new security interest granted on similar terms on 24 November 2017. The shares therefore remain subject to a security interest. There was no change in the underlying beneficial ownership of the shares.
  7. On 13 May 2016, in respect of various contracts for the transfer of shares (as described on pages 235 and 238 of the Prospectus), Tim Steiner delayed the date on which completion under the contracts for transfer would take place to 30 June 2019, or such later date as the parties may agree. As a result of the security interest granted over Tim Steiner's ordinary shares in the Company (see footnote 6), the completion of these contracts is conditional on the release of the security interest.
  8. On 11 May 2016, in respect of various contracts for the transfer of shares (as described on pages 235 and 238 of the Prospectus), Neill Abrams delayed the date on which completion under the contracts for transfer would take place to 30 June 2019, or such later date as the parties may agree.
  9. Where applicable, the above indirect holdings include SIP Partnership Shares held under the SIP, which are held in trust.
  10. The Executive Director shareholdings have increased during the period primarily due to the vesting of the 2014 LTIP awards. Read more below.
  11. During the year, Non-Executive Director Robert Gorrie retired from the Board. Robert Gorrie held 415,660 ordinary shares at 27 November 2016 and on the date of his retirement on 3 May 2017, therefore complying with the shareholding requirement up to this date. His shareholdings were held directly.
  12. Following the period end, Alex Mahon retired from the Board. Alex Mahon held 17,355 ordinary shares at 3 December 2017 and on the date of her retirement on 13 December 2017, therefore complying with the shareholding requirements up to this date. Her shareholdings were held directly.
  13. Where an Executive Director does not meet the minimum shareholding requirement, up to 50% of any cash bonus payable under the AIP as an award of shares must be deferred.
  14. The assessment for shareholding compliance is based on the current annualised salary or fee (as set out in the total remuneration tables) which applied on 22 January 2018 (being the last practicable date prior to the publication of this Annual Report) and the higher of the original purchase price(s) or the current market price (being 526 pence per share on 22 January 2018), of the relevant shareholdings.

Director Interests in Share Schemes (audited)

JSOS (audited)

At the end of the period the Executive Directors' interests in ordinary shares in the Company pursuant to the Group's JSOS were as follows:

DirectorType of interestDate of
issue
Number of
share interests
Hurdle Price
(£)
Vesting Date
Tim SteinerJoint interest in shares03/02/102,513,1001.7301/01/11
Joint interest in shares03/02/102,513,1001.9101/01/12
Joint interest in shares03/02/102,513,1002.0801/01/13
Joint interest in shares03/02/102,513,0002.2801/01/14
Neill AbramsJoint interest in shares03/02/101,017,2001.7301/01/11
Joint interest in shares03/02/101,017,2001.9101/01/12
Joint interest in shares03/02/101,017,2002.0801/01/13
Joint interest in shares03/02/101,017,1002.2801/01/14
Duncan Tatton-BrownJoint interest in shares01/11/12365,0001.7001/01/13
Joint interest in shares01/11/121,100,0001.8001/01/14
Mark RichardsonJoint interest in shares03/02/10223,3001.7301/01/11
Joint interest in shares03/02/10223,3001.9101/01/12
Joint interest in shares03/02/10223,3002.0801/01/13
Joint interest in shares03/02/10223,2002.2801/01/14
Joint interest in shares30/11/12711,9751.7001/01/13
Joint interest in shares30/11/12776,7001.8001/01/14

Granted: No awards of JSOS share interests were made during the period. The Remuneration Committee does not, as at the date of this Annual Report, have any intention of making a further award of share interests under the JSOS scheme to the current Executive Directors. The JSOS scheme, which was put in place prior to the Company's Admission in 2010, involves the Executive Directors investing their own funds to purchase a shared interest in the Company's shares at the market value at that time. These investments were made in 2010 (in the case of Tim Steiner, Neill Abrams and Mark Richardson) and in 2012 (in the case of Duncan Tatton-Brown and Mark Richardson again). The Executive Directors invested from their own resources. The purchased interests entitle the Executive Directors to a return only if, in the future, the share price exceeds the relevant hurdle rate. The Executive Directors would lose their investment if the share price were not to exceed the hurdle price. For a detailed description of the JSOS scheme refer to pages 249 to 252 of the Prospectus.

Vested: No JSOS share interests vested during the period.

Sold: No JSOS share interests have been sold by an Executive Director since inception of the scheme.

Lapsed: No JSOS share interests lapsed during the period.

Food

LTIP (audited)

At the end of the period the Executive Directors' total LTIP awards were as follows:

DirectorType of InterestDate of
Grant
Basis on Which Award is made
(% of Salary)
Number of SharesFace Value of Award
(£)
End of Performance PeriodExpected Vesting Date
Tim SteinerConditional shares13/03/15200291,0051,100,00003/12/1722/03/18
Conditional shares17/03/16200429,8851,122,00002/12/1817/03/19
Conditional shares20/02/17200452,8811,155,65801/12/1915/03/20
Mark RichardsonConditional shares13/03/15150134,920510,00003/12/1722/03/18
Conditional shares17/03/16150199,310520,00002/12/1817/03/19
Conditional shares20/02/17150209,972535,80501/12/1915/03/20
Neill AbramsConditional shares13/03/1512090,476342,00003/12/1722/03/18
Conditional shares17/03/16120133,655349,00002/12/1817/03/19
Conditional shares20/02/17120176,346449,99801/12/1915/03/20
Duncan Tatton-BrownConditional shares13/03/15150134,920510,00003/12/1722/03/18
Conditional shares17/03/16150199,310520,00002/12/1817/03/19
Conditional shares20/02/17150209,972535,80501/12/1915/03/20
  1. The LTIP awards are conditional awards under the rules of the LTIP, which is a right to receive free shares in the Company, subject to the achievement of performance conditions over a three-year performance period.
  2. The 2015 LTIP award was determined based on a price of 378 pence per share, being the volume weighted average price of the Company's ordinary shares on the three trading days prior to 13 March 2015 (being the LTIP grant date). The 2015 LTIP award is subject to the achievement of four equally weighted performance conditions for the 2016/2017 financial year, being the third year of a three-year performance period. The performance conditions concerning the financial performance of the Group, both earnings before tax and revenue, are focused on the Group's retail business performance and weighted 25% each. The Ocado Solutions performance conditions each have a 25% weighting. In respect of a target, at "threshold" performance, 6.25% of an LTIP award will vest and at "maximum" performance, 25% of an LTIP award will vest. Vesting will be on a straight-line basis between the "threshold" and the "maximum".
  3. The 2015 LTIP awards are not capable of vesting until after the end of the period, on 22 March 2018.
  4. The 2016 LTIP award was determined based on a price of 261 pence per share, being the volume weighted average price of the Company's ordinary shares on the three trading days prior to 17 March 2016 (being the LTIP grant date). The 2016 LTIP award is subject to the achievement of four equally weighted performance conditions for the 2017/2018 financial year, being the third year of a three-year performance period. The performance conditions concerning the financial performance of the Group, both earnings before tax and revenue, will be focused on the Group's retail business performance and will be weighted 25% each. The proprietary infrastructure solution performance conditions will each have a 25% weighting and concern platform operational efficiency and platform capital efficiency. In respect of a target, at "threshold" performance, 6.25% of an LTIP award will vest and at "maximum" performance, 25% of an LTIP award will vest. Vesting will be on a straight-line basis between the "threshold" and the "maximum".
  5. The 2017 LTIP award is outlined below.

Granted: LTIP awards were made in respect of 2017 of up to 150% of annual base salary and in the case of the Chief Executive Officer, an LTIP award with a total market value of 200% of annual base salary. Such awards were made in accordance with the Directors' Remuneration Policy. The number of shares subject to an LTIP award was determined based on a price of 255.1792 pence per share, being the volume weighted average price of the Company's ordinary shares on the three trading days prior to 20 February 2017 (being the LTIP grant date).

The 2017 LTIP awards are conditional awards under the rules of the LTIP, which are a right to receive free shares in the Company, subject to the achievement of four equally weighted performance conditions. The performance metrics relate to the retail business and the platform business. The Remuneration Committee believes that these performance conditions encourage the delivery of crucial strategic objectives of the Group. The performance conditions concerning the financial performance of the Group, both earnings before tax and revenue, will be focused on the Group's retail business performance and will be weighted 25% each. The proprietary infrastructure solution performance conditions will each have a 25% weighting. The first concerns platform operational efficiency and the second concerns sales of the Ocado Solutions platform.

The rationale for, and basis of measurement of, the performance metrics was as follows:

Performance targetCommercial rationaleBasis of measurement
Retail business (50%)Rewards top line sales growth for the retail business in line with the Group's strategy and the creation of financial returns to shareholders.Revenue and earnings before tax for the retail business for the 2018/2019 financial year.
Platform business (50%)Rewards progress and achievement with the proprietary infrastructure solution and solutions business, which is a key strategy objective.Operational efficiency of the platform business and sales of the Ocado Solutions platform.

The Remuneration Committee has agreed "threshold" and "maximum" conditions that must be achieved. No LTIP award will vest unless a "threshold" level of the performance condition has been achieved. At "threshold" performance for a performance target, 6.25% of an LTIP award will vest and at "maximum" performance, 25% of an LTIP award will vest. Vesting will be on a straight-line basis between the "threshold" and the "maximum". Each target is discrete and can be earned separately. Full vesting will only occur where exceptional performance levels have been achieved and significant shareholder value created.

The performance conditions for the 2017 LTIP awards will be tested in relation to the financial year ending in 2019 (except in the case of the Ocado Solutions target which measures performance over the three year performance period) to determine what percentage of the LTIP awards has been achieved, and will vest during 2020 to the extent that the performance conditions have been achieved. Any 2017 LTIP awards that vest will not be subject to deferral as they were awarded to participants under the 2014 directors' remuneration policy and therefore are not subject to deferral.

The specific performance conditions are not disclosed due to their commercial sensitivity on the basis that if disclosed it would be likely to damage the Company's commercial interests. The Company will disclose the performance conditions after the end of the performance period, to the extent that the targets are not considered commercially sensitive at the time.

Vested: The 2014 LTIP awards had a vesting date of 31 March 2017 for a three-year performance period that ended with the 2015/2016 financial year. As explained in the 2016 annual report, the Remuneration Committee reviewed the performance against the award's two equally weighted performance conditions, which were the levels of diluted and adjusted earnings per share, and Group revenue, for the 2015/2016 financial year. The Group's diluted and adjusted earnings per share for the period was 3.075 pence per share, which was above the threshold performance target of 1.3 pence per share but below the maximum performance target of 3.5 pence per share. Accordingly, achievement against the performance target was 42.76%. The Group's revenue for the period was £1,271.0 million, which was below the threshold performance target of £1,385.5 million. Consequently, achievement against the performance target was 0% and therefore overall 42.76% of the award vested.

The performance period for the 2015 LTIP awards finished in the year, although these awards are not capable of vesting until 22 March 2018 (as noted on above).

Sold: As a result of the vesting of the 2014 LTIP awards, the Executive Directors sold shares in the Company. The Directors sold sufficient of the shares that vested to cover the cost of the tax and National Insurance. The details of the LTIP vesting and resulting share sale for each Executive Director are set out below.

DirectorDate of
Grant
Grant price (£)Number of Shares VestedDate of Vesting
and Sale
Share Price on Vesting
(£)
Value of
Shares Vested (£)
Shares
Sold on Vesting
Shares
Retained on Vesting
Tim Steiner05/02/145.15574,65331/03/172.49007185,89135,15839,495
Duncan Tatton-Brown05/02/145.15541,05931/03/172.49007102,24019,33721,722
Mark Richardson05/02/145.15541,05931/03/172.49007102,24019,33721,722
Neill Abrams05/02/145.15527,37331/03/172.4900768,16112,89214,481
  1. For more details see the total remuneration table on above.

Lapsed: No LTIP awards lapsed during the period.

GIP (audited)

At the end of the period, the Executive Directors' total GIP awards were as follows:

DirectorType of InterestDate of
Grant
Number of
Share Options
Face Value of
Award
(£)
End of
Performance
Period
Exercise Period
Tim SteinerOption with nil exercise price08/05/144,000,00012,744,00008/05/1908/05/19 – 31/05/24
Mark RichardsonOption with nil exercise price08/05/141,000,0003,186,00008/05/1908/05/19 – 31/05/24
Duncan Tatton-BrownOption with nil exercise price08/05/141,000,0003,186,00008/05/1908/05/19 – 31/05/24
  1. The face value of the options which are the subject of a GIP award was determined based on a price of 318.60 pence per share being the price on date of grant. A condition of vesting is that each participant holds, and retains throughout the performance period, shares in the Company. The Chief Executive Officer is required to hold shares equivalent, at the date of the award, to the value of his annual salary. Both other participants are required to hold shares equivalent, at the date of the award, to the value of half of their annual salary. The GIP award is subject to the achievement of a single performance condition to be satisfied over five years commencing on the date of grant of the awards. The share price of the Company is the sole performance measure, and will be assessed relative to the growth of the FTSE 100 Share Index over that period assessed using a three-month averaging period. The performance schedule is set out in the table below:
Performance targetPercentage of
award vesting (%)
Growth of less than the FTSE 100 Share Index +5% p.a.0
Growth in the FTSE 100 Share Index +5% p.a.25
Growth in the FTSE 100 Share Index +10% p.a.50
Growth in the FTSE 100 Share Index +15% p.a.75
Growth in the FTSE 100 Share Index +20% p.a. (or more)100

Granted: No awards under the GIP were granted during the period.

Vested: No awards under the GIP vested during the period. The awards are expected to vest in May 2019 (if and to the extent that the vesting criteria are met).

Sold: No awards under the GIP have been exercised or sold by an Executive Director during the period.

Lapsed: No awards under the GIP lapsed during the period.

ESOS (audited)

At the end of the period, the Executive Directors held options under the ESOS as follows:

DirectorType of InterestDate of
Grant
Number of
Share Options
Exercise Price (£)Face Value of Grant
(£)
Exercise
Period
Mark RichardsonOption31/05/0970,0001.2084,00031/05/12 – 30/05/19
Duncan Tatton-BrownOption12/08/139,9233.0229,96708/07/16 – 07/07/23

Granted: The Remuneration Committee does not, as at the date of this Annual Report, have any intention of making a further award of options under the ESOS scheme to the existing Executive Directors. Existing options held by the Executive Directors under the ESOS were granted prior to the Company's listing in 2010 (except those granted in 2013 to then new appointee Director, Duncan Tatton-Brown). None of the grants of ESOS options to the Executive Directors are subject to performance conditions.

Vested: No awards under the ESOS vested during the period.

Sold: No awards under the ESOS have been exercised or sold by an Executive Director during the period.

Lapsed: No options under the ESOS lapsed during the period.

2014 ESOS (audited)

No awards have been granted to the Executive Directors under the 2014 ESOS, and the Remuneration Committee does not have any intention of making an award of options under the 2014 ESOS scheme to the existing Executive Directors. Accordingly, no value is shown in the total remuneration table for the period.

SIP (audited)

At the end of the period, interests in shares held by the Executive Directors under the SIP were as follows:

DirectorPartnership Shares Acquired in the YearMatching Shares Awarded in the YearFree Shares Awarded in the YearTotal Face Value of Free Shares and Matching Shares Awarded in the Year
(£)
Total SIP Shares Held 3/12/2017SIP Shares that Became Unrestricted in the PeriodTotal Unrestricted SIP Shares Held at 3/12/2017
Tim Steiner666951,2403,8546,9971,1771,177
Duncan Tatton-Brown667951,2403,8546,9401,1201,120
Mark Richardson666951,2403,8546,9911,1261,126
Neill Abrams666951,0613,3356,258948948
  1. Unrestricted shares are those which have been held beyond the three-year forfeiture period.
  2. The value of the share awards made under the SIP is based on the middle market quotation of a share on the trading day immediately preceding the date of grant.

Granted: The Directors continued their SIP participation during the period. The SIP scheme is made available to all employees. The SIP allows for the grant of a number of different forms of awards. An award of free shares was made to the Executive Directors in September 2017 under the terms of the SIP and the Directors' Remuneration Policy. "Free shares" of up to £3,600 of ordinary shares may be allocated to any employee in any year. Free shares are allocated to employees equally on the basis of salary, as permitted by the relevant legislation.

An award of matching shares was made to those Executive Directors who purchased partnership shares (using deductions taken from their gross basic pay) under the terms of the SIP and in accordance with the Directors' Remuneration Policy. "Partnership shares" are where employees are invited to purchase ordinary shares directly from their earnings. The market value of such partnership shares which an employee can purchase in any tax year currently may not exceed £1,800 (or 10% of the relevant employee's remuneration, if lower). "Matching shares" are additional free shares which may be allocated to an employee who purchases partnership shares. The rules of the SIP reflect current UK legislation and allow for a maximum matching ratio of two to one. The matching ratio adopted by the Company for the SIP during the period was a ratio of one matching share for every seven partnership shares purchased, considerably lower than the maximum permitted ratio.

There are no performance conditions attached to awards made under the SIP, although free shares and matching shares are subject to a three-year forfeiture period. Partnership shares are purchased by the employees and therefore forfeiture does not apply. Free shares and matching shares awarded under the SIP are subject to a holding period of no less than three years but no more than five years. Shares held in trust for more than five years are not subject to income tax or National Insurance contributions on withdrawal. Partnership shares purchased by employees are not subject to a holding period.

The Executive Directors continued their membership in the SIP after the end of the period and were therefore awarded further matching shares pursuant to the SIP rules. Between the end of the period and 22 January 2018, being the last practicable date prior to the publication of this Annual Report, the Executive Directors acquired or were awarded further shares under the SIP as set out in the table below:

DirectorPartnership Shares AcquiredMatching Shares AwardedFree Shares AwardTotal Face Value of Free Shares and Matching Shares
(£)
Total SIP Shares
Held at
22/01/2018
Tim Steiner7912457,088
Duncan Tatton-Brown7812457,030
Mark Richardson7911427,081
Neill Abrams7911426,348
  1. The value of the share awards made under the SIP is based on the middle market quotation of a share on the trading day immediately preceding the date of grant.

Vested: For details of free shares and matching shares that became unrestricted in the period, see above. Only the value of free and matching shares that became unrestricted during the period is shown in the total remuneration table. Unrestricted shares can be held in Trust under the SIP for as long as the participant remains an employee of the Company.

Sold: No shares held under the SIP have been sold by an Executive Director.

Lapsed: No shares held by an Executive Director under the SIP lapsed during the period.

Sharesave Scheme (audited)

At the end of the period, the Executive Directors' option interests in the Sharesave scheme were as follows:

DirectorType of InterestDate of
Grant
Number of
Share Options
Exercise Price (£)Face Value
(£)
Exercise Period
Tim SteinerOptions05/08/167,8942.2817,99801/12/19 – 01/05/20
Neill AbramsOptions05/08/167,8942.2817,99801/12/19 – 01/05/20
Duncan Tatton-BrownOptions05/08/167,8942.2817,99801/12/19 – 01/05/20
Mark RichardsonOptions05/08/167,8942.2817,99801/12/19 – 01/05/20

Granted: No awards under the Sharesave were granted during the period.

Vested: For details of vested Sharesave options, see above.

Exercised: No awards under the Sharesave were exercised or sold by the Executive Directors during the period.

Lapsed: A savings contract under the Sharesave scheme matured on 1 December 2016. Tim Steiner, Duncan Tatton-Brown and Neill Abrams each held 2,987 options at this date. Participants were able to exercise their options until the end of the exercise period in May 2017. During the exercise period, the share price did not rise higher than the exercise price and therefore the options lapsed and the Directors withdrew their savings.

Dilution

Dilution Limits

Awards granted under the Company's Sharesave, ESOS, 2014 ESOS and SIP schemes are met by the issue of new shares when the options are exercised or shares granted. The allocation of awards under the JSOS were met by the subscription for new shares by the participant and the EBT. Awards granted under the GIP may be met by the issue of new shares, the transfer of shares from treasury, or the purchase or transfer of existing shares by the EBT (where available). Awards vesting under the LTIP are typically satisfied by the issue of new shares and transfer of existing shares by the EBT. The share deferral provisions in the AIP have not been approved by shareholders and accordingly awards will be satisfied only by the purchase of existing shares by the EBT until such shareholder approval is obtained.

There are limits on the number of shares that may be allocated under the Company's share plans. These dilution limits were recommended by the Remuneration Committee and incorporated into the rules of the various share schemes, which have been approved by the Company's shareholders.

The dilution limits restrict the commitment to issue new ordinary shares or reissue treasury shares under all share schemes of the Group to 10% of the nominal amount of the Company's issued share capital and under the JSOS, the LTIP and the GIP (and any other selective share scheme) to 5% of the nominal amount of the issued share capital of the Company in any rolling ten-year period. These limits are consistent with the guidelines of institutional shareholders.

The JSOS rules have additional overriding limits on the number of shares that may be allocated under the JSOS. Up to 7.5% of the Company's ordinary issued share capital may be held under the JSOS.

Impact on Dilution

The Company monitors the number of shares issued under these schemes and their impact on dilution. The charts below show the Company's commitment, as at the last practicable date prior to the publication date of this Annual Report being 22 January 2018, to issue new shares in respect of its share schemes assuming all performance conditions are met, all award holders remain in employment to the vesting date and all awards are settled in newly issued shares. For these purposes, no account is taken of ordinary shares allocated prior to the Company's Admission.

 

All Share Plans

All Share Plans Purple

Discretionary Share Plans

Discretionary Shares Purple

Review of Changes in Remuneration and Company Performance

This part of the report provides some context for the Directors' remuneration arrangements including information concerning the Company's performance, shareholder returns and the Group's total expenditure on employee pay.

Steak and quinoa

Chief Executive Officer Historical Remuneration

The table below summarises in respect of the Chief Executive Officer the single figure of total remuneration, the AIP or bonus plan payment as a percentage of maximum opportunity, and the long-term incentives as a percentage of maximum opportunity for the current period and the previous seven financial years.

YearChief Executive Officer
Total Remuneration
(£'000)
AIP or Bonus Payment as
a Percentage
of Maximum Target Achievement
(%)
Value of
AIP or Bonus Payment
(£'000)
Long-Term Incentives as a Percentage of Maximum Opportunity
(%)
20171,16441.831033.4
20161,14143.631543.2
20155,09865.045990.8
20146,48356.0385100
20131,01198.35280
201248329.71040
201198700100
2010599n/a2200
  1. The Chief Executive Officer total remuneration figures prior to the 2013 period represent the previously presented audited information with necessary adjustments for amounts required to be included in the single total figure of remuneration (such as pension amounts) under the new regulations (which first applied to the 2013 financial period).
  2. From 2010, the Company had the JSOS as the main form of long-term incentive plan. In 2011, the first tranche of JSOS shares vested in that period. For the 2012 and 2013 financial years, the JSOS interests did not have any value at the vesting date. In 2014, the final tranche of JSOS shares vested in that period (the value of such remuneration is noted in the single total figure of remuneration above). The LTIP was implemented in 2013 and the first award had a performance period ending in 2015 and a vesting date in 2016. The GIP and SIP were both implemented in 2014, but have vesting dates in 2019 and 2017 respectively.
  3. The total remuneration amounts shown above are the amounts restated so as to account for the final vesting of the LTIP awards. For an explanation of this restatement in respect of the 2016 period see note 1 of the total remuneration table. For details of the 2017 period LTIP value, see note 2 of the total remuneration table.

Chief Executive Officer Percentage Change Versus Employee Group

To put the Directors' remuneration into context, the table below sets out the change in salary, benefits, and bonus of the Chief Executive Officer and of all of the Group's employees from the preceding period to the current period.

Chief Executive OfficerAll UK employees
Percentage change in salary from 2016 to 20172.8%4.1%
Percentage change in taxable benefits from 2016 to 2017100%(15.2)%
Percentage change in AIP earned from 2016 to 2017(1.6)%n/a
  1. Most of the Group's employees are not entitled to earn an annual bonus payment as part of their remuneration.
  2. The change in salary data for the Group's employees is on a per capita basis.

Relative Importance of Spend on Pay

The following table shows the Company's profit and total Group-wide expenditure on pay for all employees for the period and last financial year. The Company has not paid a dividend or carried out a share buyback in the current year or previous year. The information shown in this chart is:

  • Profit – Group profit before tax as set out in Note 2.1 to the consolidated financial statements.
  • Total gross employee pay – total gross employment costs for the Group (including pension, variable pay, share-based payments and social security) as set out in Note 2.6 to the consolidated financial statements.
3 December 2017
(£m)
27 November 2016
(£m)
Profit before tax1.012.1
Total gross employee pay335.9287.7

Company Share Price

The closing market price of the Company's shares as at 1 December 2017, being the last trading day in the period ended 3 December 2017, was 363.5 pence per ordinary share (2016: 275.8 pence) and the share price range applicable during the period was 238.5 pence to 363.5 pence per ordinary share.

Total Shareholder Return

The following graph shows the TSR performance of an investment of £100 in the Company's shares from its Admission to the end of the period compared with an equivalent investment in the FTSE 250 Index (which was chosen because it represents a broad equity market index of which the Company is a constituent). The TSR was calculated by reference to the movements in share price. The Company has not paid a dividend since its Admission so the Company's TSR does not factor in dividends reinvested in shares.

Tsr Graph New Purple

See Alternative Performance Measures

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