Annual Report 2014

REPORT OF THE REMUNERATION COMMITTEE ON DIRECTORS’ REMUNERATION

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Dear Shareholder

On behalf of the Board, I am pleased to present the Report on Directors’ remuneration for the financial year ended 28 February 2014, which sets out the remuneration policy for the Directors and information on their remuneration for the year.

The layout of the Report has changed this year compared with previous years. C&C is an Irish-incorporated company and is therefore not subject to the new UK regulations1 (the “UK Regulations”) regarding the presentation of the remuneration report and the disclosures to be made by UK quoted companies, but the Group has sought to apply the new requirements on a voluntary basis to the extent possible under Irish law in order to reflect evolving best practice under the UK Corporate Governance Code.

The Report is presented in three main sections:

  • The Directors’ Remuneration Policy, which sets out the forward-looking remuneration policy for Directors (the “Policy Report”);
  • A statement of how this policy will be applied in the year ending 28 February 2015; and
  • The Annual Report on Remuneration, which provides details on the amounts earned in respect of the year ended 28 February 2014.

The Board will submit the Policy Report to shareholders for approval on an advisory basis, rather than binding basis (as required under the UK Regulations) at the Company’s 2014 Annual General Meeting. However it is the Board’s intention to operate in line with the approved policy from the close of business at the 2014 Annual General Meeting, if it is approved. The Board will seek a further advisory vote of the Company’s shareholders at succeeding AGMs if the current policy changes or, if earlier, in three years’ time.

The Board will also submit the remainder of the Remuneration Report to an annual advisory non-binding vote by shareholders at the AGM, in accordance with best practice.

Outturn for FY2014+-

The results for the year ended 28 February 2014 are set out elsewhere in the annual report. Economic conditions in FY2014 continued to be challenging for the Group and Group operating profit was within guidance. The year was one of consolidation and integration of the acquisitions of VHCC and Gleeson.

FY2014 decisions and changes relating to Directors’ remuneration+-

The Board remain committed to a responsible approach to executive pay, particularly given the continuing challenges of the economic environment. During the year ended 28 February 2014 the Committee reviewed executive remuneration but the executive Directors did not consider it appropriate, in challenging economic times, to take a salary increase in FY2014 and this was supported by the Committee. The Committee feel it is important to observe that no change has been made to the base salaries for the roles of Chief Executive Officer and Chief Finance Officer since November 2008. Since that date Stephen Glancey and Kenny Neison have waived contractual entitlements to salary indexation in 2009 and 2010, to bonus payments in 2009 and to contractual awards under the share schemes in respect of FY2014. The Committee is appreciative of these gestures. Similarly no increase has been made to non-executive Directors fees since 2008.

Changes were made after the year-end to the structure of Joris Brams’ service contract and remuneration, to reflect his greater focus on the United States following our acquisition of VHCC and services being provided by his service company in respect of Belgian brand development. Details are set out on this page.

The Committee determined that executive Directors should be paid bonuses of 15% of base salary under the bonus scheme. The Committee further determined that in respect of awards made in FY2012 (a) under the C&C Executive Share Option Scheme (ESOS), the performance condition relating to growth in Group earnings per share (EPS) was not met and the options did not vest and (b) in respect of awards under the C&C Long Term Incentive Plan (Part I) (LTIP (Part I)), the performance condition relating to growth in Group earnings per share (EPS) was met at slightly above the minimum threshold but the performance condition relating to the Company’s relative total shareholder return (TSR) was not met. Details are set out on this page. In addition the Committee approved various share awards and cash-settled awards and the principles of the FY2015 bonus scheme.

At the 2013 Annual General Meeting shareholders approved a resolution to enable the ESOS and LTIP (Part I) to continue to be used for a further three years, to 3 July 2016. During this period, the Company intends to undertake a review of its share schemes to take account of recent changes to its business model, especially its acquisition of Vermont Hard Cider Company in the United States, and recently published recommendations of institutional investors’ protection committees in respect of employee share schemes. The Company’s Save-as-you-earn savings-related share option scheme was also reapproved for the same duration but the Directors currently have no plans to bring this scheme into operation.

 

Yours sincerely

Breege O’Donoghue

Chairman of the Remuneration Committee
20 May 2014

1 The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013

Introduction

COMMITTEE AND ADVISERS +-

Composition

The Committee of the Board consists solely of independent non-executive Directors.

During the year ended 28 February 2014 the Chairman of the Committee was Breege O’Donoghue. Other members of the Committee were Richard Holroyd and Stewart Gilliland.

Terms of reference of Committee

The Committee’s terms of reference are summarised on this page.

Advice and Consultation

The Chairman of the Board and the Chief Executive Officer are fully consulted on remuneration proposals but neither is present when his own remuneration is discussed.

The Committee has access to external advice from remuneration consultants and other independent firms on compensation when necessary. During the year ended 28 February 2014 the Committee obtained advice from the following consultants, who were appointed by the Committee:

  • Towers Watson: advice in respect of the 2013 Directors’ remuneration report. Towers Watson were appointed by the Committee. The fees paid amounted to €8,818, charged on a time basis.
  • New Bridge Street in respect of the extension of the Group’s employee share schemes and other matters relating to the share schemes. The fees paid amounted to €55,013, charged on a time basis.
  • During the period, a separate division of the Aon group of which New Bridge Street is a member provided insurance broking services for the Group, and Aon is the independent investment adviser to the pension scheme trustees.
  • Deloitte: advice to the Committee in respect of awards under the Recruitment and Retention Plan; the Joint Share Ownership Plan, the International Director’s service contract and the Remuneration report. Deloitte’s fees for this advice amounted to €13,082, charged on a time or fixed fee basis.

During the period, separate divisions of Deloitte advised the Group on commercial contract issues and tax issues.

Each of the above advisers is a member of the UK Remuneration Consultants Group and, as such, voluntarily operates under a code of conduct. To safeguard objectivity, protocols are established to cover the basis for contact with executive management and to avoid potential conflict arising from other client relationships. The Committee is satisfied that the remuneration advice provided by the external consultants above is objective and independent.

The Committee also obtains advice from:

  • Paul Walker, Company Secretary and General Counsel, who is secretary to the Committee.
  • Sarah Riley, Group Director of Human Resources.

No Director is present when their own remuneration is discussed.

SHAREHOLDERS’ VIEWS +-

The Committee is committed to open and transparent dialogue with shareholders and consults with shareholders and governance bodies on proposals relating to remuneration structures. During the year, the Committee consulted with significant shareholders regarding their views on the extension of the share schemes.

The following table sets out actual voting in respect of the resolution to approve the Report on Directors’ Remuneration at the Company’s Annual General Meeting on 3 July 2013:

Resolution

Votes for

% of vote

Votes against

% of vote

Votes withheld

Approve Report on Directors’ remuneration

236,630,748

98.95%

2,504,907

1.05%

1,436

DIRECTORS’ REMUNERATION POLICY

This part of the report sets out the Group’s policy on Directors’ remuneration. The policy has been determined by the Committee of the Board of Directors (“the Committee”). The Directors’ remuneration policy will be subject to an advisory vote at the 2014 AGM and will take effect from that date.

General statement of policy +-

The main aim of the Group’s policy on Directors’ remuneration is to attract, retain and motivate Directors of the calibre required to run the Group successfully. The Committee therefore seeks to ensure that Directors are properly, but not excessively, remunerated and motivated to perform in the best interests of shareholders, commensurate with ensuring shareholder value.

The Committee seeks to ensure that executive Directors’ remuneration is aligned with shareholders’ interests and the Group’s strategy. Share awards are therefore seen as the principal method of long-term incentivisation. Executive Directors are incentivised on a range of equity share structures, notably the significant share ownership held by Stephen Glancey and Kenny Neison through the Joint Share Ownership Plan. Similar principles are applied for senior management, several of whom have material equity holdings in the Company.

Annual performance-related rewards aligned with the Group’s key financial, operational and strategic goals and based on stretching targets and achieving personal objectives are a further component of the total executive remuneration package. For senior management, mechanisms are tailored to local requirements.

The Group seeks to bring transparency to executive Directors’ reward structures through the use of cash allowances in place of benefits in kind. In setting executive Directors’ remuneration the Committee has regard to pay levels and conditions applicable to other employees across the Group.

FUTURE POLICY TABLE

Executive Directors’ remuneration

Element

Salary

Purpose and link to strategy

Purpose is to attract, recruit and retain Directors of the necessary calibre.

Operation

Salary levels are determined by the Committee taking into account factors including:

- scope and responsibilities of the role

- experience and performance

- overall business performance

- prevailing market conditions

- pay in comparable companies, principally in the global beverage sector

- overall risk of non-retention.

Opportunity

Executive Directors are entitled to an annual review of their salary, but there is no entitlement to receive any increase.

 

The Committee may award salary increases to take account of individual circumstances such as:

• increases or changes in scope and responsibility;

• increases to reflect the executive Director’s development and performance in the role; or

• alignment to market level.

 

In awarding increases, the Committee will have regard to the outcome of pay reviews for employees as a whole.

 

The base salaries effective as at 1 March 2014 and subsequent changes made are shown on this page.

Performance metrics

Not applicable.

Element

Benefits/cash allowance in lieu

Purpose and link to strategy

Purpose is to attract, recruit, and retain Directors of the necessary calibre.

Operation

The Group seeks to bring transparency to Directors’ reward structures through the use of cash allowances in place of benefits in kind. The cash allowance can be applied to benefits such as a company car and health benefits. Group benefits such as death in service insurance are also made available. Other benefits may be provided based on individual circumstances including housing or relocation allowances, travel allowance or other expatriate benefits. Benefits and allowances are reviewed alongside salary.

Opportunity

The Committee has not set an absolute maximum on the levels of benefits that may be awarded since this will depend upon the circumstances applicable to the relevant Director. The value of the cash allowance / benefit is set at a level which the Committee considers appropriate against the market and provides sufficient level of benefit based on individual circumstances.

 

See ‘Implementation’ section on this page below for details of the benefits for FY2015.

Performance metrics

Not applicable.

 

Element

Pension/cash allowance in lieu

Purpose and link to strategy

Purpose is to attract, recruit, and retain Directors of the necessary calibre.

Operation

The Group seeks to bring transparency to Directors’ reward structures through the use of cash allowances in place of pension scheme participation, the allowance being either paid direct or into a personal pension plan. No executive Director accrues any benefits under a defined benefit pension scheme. All cash allowances are reviewed alongside salary.

Opportunity

Maximum cash allowance is 30% of salary.

The value awarded is set at a level which the Committee considers appropriate against the market and provides sufficient level of benefit based on individual circumstances.

 

See ‘Implementation’ section below on this page for details of the benefits for FY2015.

Performance metrics

Not applicable.

 

Element

Annual bonus

Purpose and link to strategy

Rewards performance against annual financial and strategic business targets which support the strategic direction of the Company and align the interests of executives and shareholders.

Operation

A discretionary scheme under which executive Directors are entitled to receive a variable reward contingent upon the achievement of performance targets.

 

The structure and value of the bonus scheme and the applicable performance measures are subject to annual approval by the Committee. Any pay-out is determined by the Committee after the year end, based on performance against the relevant targets.

 

The Committee has discretion to vary the bonus pay out should any formulaic output not reflect the Committee’s assessment of overall business performance.

 

The Committee reserves the right to vary, amend, replace or discontinue the bonus scheme at any time depending on business needs and/or financial viability or as appropriate by reference to any changes in corporate structure during the financial year.

Opportunity

Maximum opportunity is 100% of base salary.

 

However, executive Directors are currently entitled to a bonus opportunity of 80% of base salary.

Performance metrics

Measures and targets are set annually reflecting the Company’s strategy and aligned with key financial, strategic and/or individual objectives.

 

Targets, whilst stretching, do not encourage inappropriate business risks to be taken.

 

The relevant measures and the respective weightings may vary each year based upon Company’s priorities.

 

See ‘Implementation’ section below on this page for details of the bonus conditions for FY2015.

 

Element

Share-based rewards – executive (discretionary) plans

Purpose and link to strategy

To incentivise executive Directors to execute the Group’s business strategy over the longer term and align their interests with those of shareholders to achieve a sustained increase in shareholder value.

Operation

Options or awards may be granted under the ESOS and the LTIP (Part I) as detailed below.

Options and awards are granted solely at the discretion of the Committee save where the executive has a contractual entitlement.

 

Awards are usually made annually by the Committee following the release of full year financial results but can be made after release of the interim results and exceptionally at other times.

Opportunity

The rules of each current scheme, which are approved by shareholders, stipulate a normal maximum award as a percentage of base salary.

Performance metrics

The vesting of awards is subject to the satisfaction of performance conditions set by the Committee. Performance conditions are selected that are aligned to the Company’s strategy and with shareholders’ interests. The performance measures chosen are reviewed regularly to ensure they remain relevant. The relevant measures, targets and weightings may vary each year based upon the Company’s priorities. Options lapse if the performance target threshold is not met in the relevant testing period and there is no retesting.

 

Element

(a) ESOS

Purpose and link to strategy

 

Operation

The Committee may grant options to acquire shares in the Company at a market related exercise price.

 

Options will not normally be exercisable until three years after the date of grant and vesting is subject to meeting a specific performance target set by the Committee.

 

Early vesting may be available for certain qualifying leavers. See compensation on termination policy on this page for more details. See note 5 (Share-based Payments) to the financial statements.

 

Options vest early on a change of control (or other relevant event), taking into account the performance conditions. Options may be adjusted in the event of a variation of share capital in accordance with the scheme rules.

 

Part 1 of the ESOS is a general scheme. Part 2 of the Scheme is a scheme approved by the UK Revenue authorities and allows grants of options over shares with a market value of up to £30,000 to be made on a tax efficient basis to employees who are UK taxpayers. This is subject to the same performance condition as Part 1 of the Scheme.

Opportunity

The normal maximum award under the rules of the scheme is 150% of base salary. However, the rules, approved by shareholders, provide that in very exceptional circumstances the Committee can grant awards above 150% of base salary. If this discretion is used, disclosure of the option grant will be made in the Company’s next annual report.

 

Contractual entitlements:

Stephen Glancey - ESOS: 150% of base salary

Kenny Neison - ESOS: 150% of base salary

Joris Brams - ESOS: 150% of aggregate base salary

Performance metrics

See ‘Implementation’ section below on this page for details of the performance conditions for FY2015.

 

See note 5 (Share Based Payments) to the financial statements for details of the performance conditions for FY2014.

 

Element

(b) LTIP (Part I)

Purpose and link to strategy

 

Operation

Awards are granted in the form of nominal cost options to acquire shares or conditional awards.

 

Awards will not normally be exercisable until three years after the date of grant and vesting is subject to meeting specific performance targets set by the Committee, normally over a three year performance period.

 

For awards made after the announcement of results for FY2012, the Committee may decide that a participant has a right to ‘dividend equivalents’ whereby the participant receives additional value equivalent to that which accrues to shareholders by way of dividends that would have been paid on the underlying shares during the vesting period. This value can be paid as cash or shares.

 

Early or pro-rata vesting may be available for certain qualifying leavers. See compensation on termination policy on this page for more details. See note 5 (Share-based Payments) to the financial statements.

 

Awards vest early on a change of control (or other relevant event) taking into account the performance conditions and pro-rating for time, although the Committee has discretion not to apply time pro-rating. Awards may be adjusted in the event of a variation of share capital in accordance with the scheme rules.

Opportunity

The normal maximum award under the rules of the scheme is 100% of base salary. Under the plan rules, approved by shareholders, the normal maximum award limit will only be exceeded in exceptional circumstances, in which case the overall maximum opportunity is 200% of base salary.

 

Contractual entitlements:

Stephen Glancey - LTIP (Part I): 100% of base salary

Kenny Neison - LTIP (Part I): 100% of base salary

Joris Brams - LTIP (Part I): 100% of aggregate base salary

 

The Board will continue to review annually all incentive schemes and all awards are made subject to performance. However, the Board has informed Stephen Glancey and Kenny Neison that it is the intention of the Board to maintain an equivalent value of LTIP (Part 1) or incentive in the event of the LTIP scheme being evolved further.

Performance metrics

See ‘Implementation’ section on this page below for details of the performance conditions for FY2015.

 

See note 5 (Share-based Payments) to the financial statements for details of the performance conditions for FY2014.

 

Element

Share-based rewards – all-employee plans

Purpose and link to strategy

To align the interests of eligible employees with those of shareholders through share ownership.

Operation

(See schemes described below)

Opportunity

For tax-approved plans the maximum opportunity set by the rules or adopted by the Committee will be in line with or below the statutory limits.

Performance metrics

No performance conditions would usually be required in tax-approved plans.

 

Element

(a) Irish APSS/ UK SIP

Purpose and link to strategy

 

Operation

The C&C Profit Sharing Scheme is an all-employee share scheme and has two parts that are still operational.

Part A relates to employees in ROI and has been approved by the Irish Revenue Commissioners (the Irish SIP). Part B relates to employees in the UK and has been approved by HM Revenue & Customs (HMRC) in the UK (the UK SIP); UK resident executive Directors are eligible to participate in Part B only. Under the UK SIP, participants undertake to subscribe for partnership shares to be held for 5 years and receive matching shares. Tax benefits may be lost upon ceasing employment for a non-qualifying reason within the first 5 years and matching shares may be forfeited during the first 3 years on the same basis.

 

There is currently no equivalent plan for Directors resident outside Ireland or the UK.

Opportunity

Under the Company’s UK SIP the current maximum subscription is £750 per annum with entitlement to matching shares of £750 per annum. However, the Committee reserves the right to increase the maximum to the statutory limits.

Performance metrics

No performance conditions are attached to SIP awards under the Irish SIP or the UK SIP.

Element

(b) SAYE share option scheme

Purpose and link to strategy

 

Operation

Not currently operational.

Part A of the C&C Save-as-you-earn Savings-Related Share Option scheme would be a scheme approved by the Irish Revenue Commissioners. Part B would be a scheme approved by HMRC in the UK. UK resident executive Directors are eligible to participate in Part B only.

Opportunity

Participants undertake to save over 3 or 5 years and are awarded options over shares which they may exercise using the proceeds of the savings plan.

 

Under the UK revenue limits the current maximum subscription is £500 per month. However, the Committee reserves the right to set a lower limit than the statutory limits.

Performance metrics

Not applicable

 

Non-executive Directors’ remuneration

Element

Non-executive Director fees

Purpose and link to strategy

Sole element of non-executive Director remuneration is set at a level that reflects market conditions and is sufficient to attract individuals with appropriate knowledge and experience.

Operation

Fees paid to non-executive Directors are determined and approved by the Board as a whole. The Committee recommends the remuneration of the Chairman to the Board.

 

Fees are reviewed from time to time and adjusted to reflect market positioning and any change in responsibilities.

 

Non-executive Directors receive a basic fee and an additional fee for further duties (for example chairmanship of a committee or senior independent Director responsibilities).

 

Non-executive Directors are not eligible to participate in the annual bonus plan or share-based schemes and do not receive any benefits (including pension) other than fees in respect of their services to the Company.

 

Non-executive Directors may be eligible to receive certain benefits as appropriate such as the use of secretarial support.

Opportunity

Fees are based on the level of fees paid to non-executive Directors serving on Boards of similar-sized Irish and UK-listed companies and the time commitment and contribution expected for the role.

 

The Articles of Association provide that the ordinary remuneration of Directors (i.e. Directors’ fees, not including executive remuneration) shall not exceed a fixed amount or such other amount as determined by an ordinary resolution of the Company. The current limit was set at the Annual General Meeting held in 2013, when it was increased to €1.0 million in aggregate.

 

The fees effective as at 1 March 2014 are shown on this page.

Performance metrics

Not applicable.

 

Discretion to depart from policy+-

Share schemes and other incentives

The Committee recognises the importance of ensuring that the outcomes of the Group’s executive pay arrangements properly reflect the Group’s overall performance over the performance period. It is the Committee’s intention that the mechanistic application of performance conditions relating to awards will routinely be reviewed to avoid outcomes which could be seen as contrary to shareholders’ expectations.

To the extent provided for in accordance with any relevant amendment power under the rules of the ESOS and LTIP (Part 1) or in the terms of any performance condition, the Committee may alter the performance conditions relating to an option already granted if an event occurs (such as a material acquisition or divestment or unexpected event) which the Committee reasonably considers means that the performance conditions would not, without alteration, achieve their original purpose. The Committee will act fairly and reasonably in making the alteration so that the performance conditions achieve their original purpose and the thresholds remain as challenging as originally imposed. The Committee will explain and disclose any such alteration in the next remuneration report.

Legacy payments

The Committee reserves the right to make any remuneration payment or any payment for loss of office without the need to consult with shareholders or seek their approval, notwithstanding that it is not in line with the policy set out above, where the terms of the payment were agreed either:

  • before the policy came into effect; or
  • at a time when the relevant individual was not a Director of the Company and, in the opinion of the Committee, the payment was not in consideration for the individual becoming a Director of the Company.

For these purposes: the term ‘payment’ includes any award of variable remuneration; in relation to an award over shares, the terms of the payment are ‘agreed’ at the time the award is granted.

Minor changes

The Committee may without the need to consult with shareholders or seek their approval make minor changes to this Policy to aid in its operation or implementation taking into account the interests of shareholders.

Comparison with remuneration policy for employees generally +-

Remuneration packages for executive Directors and for employees as a whole reflect the same general remuneration principle that individuals should be rewarded on their contribution to the Group and its success, and the reward they receive should be competitive in the market in which they operate without paying more than is necessary to recruit and retain them.

The remuneration package for executive Directors reflects their role of leading the strategic development of the Group. Accordingly there is a strong alignment with shareholders interests, through long term performance-based share rewards. Senior management are similarly rewarded.

These rewards are not appropriate for all employees but it is the Committee’s policy that employees in general should be afforded an opportunity to participate in the Group’s success through holding shares in the Company through all-employee schemes.

Executive Directors are incentivised through an annual cash bonus to achieve shorter term objectives, and all grades are similarly incentivised.

For executive Directors the remuneration package reflects the demands of a global market. For employees generally remuneration and reward are tailored to the local market in which they work. It is the Committee’s policy that all employees should share in the success of the business divisions towards whose success they have contributed.

It is the Committee’s policy that remuneration value should be transparent. Accordingly, for all employees cash allowances and/or cash contributions to pension schemes are preferred over benefits in kind.

Consideration of employment conditions generally and consultation with employees +-

As described above, when setting the policy for executive Directors’ remuneration, the Committee applies the same core principle as applied for the pay and employment conditions of other Group employees. When reviewing Directors’ remuneration, the Committee has regard to the outcome of pay reviews for employees as a whole.

The Committee did not directly consult with employees when formulating the Directors’ remuneration policy set out in this report and no remuneration comparison measurements comparing executive Directors remuneration with employees generally were used.

The Group has regular contact with employee representatives on matters of pay and remuneration for employees covered by collective bargaining or consultation arrangements.

ILLUSTRATION OF REMUNERATION POLICY +-

The charts below show the level of remuneration and the relative split of remuneration between fixed pay (base salary, benefits and cash allowance in lieu of pension) and variable pay (annual bonus, ESOS and LTIP (Part I)) for each executive Director on the basis of minimum remuneration, remuneration receivable for performance in line with the Company’s expectations and maximum remuneration (not allowing for any share price appreciation).

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Bases and Assumptions

For the purposes of the above charts, for Stephen Glancey and Kenny Neison base salary is their salary as at 1 March 2014 and cash allowances and benefits are as described on this page. For Joris Brams base salary is his aggregate base salary with effect from 1 April 2014 and cash allowances and benefits are as described on this page with effect from 1 April 2014. The average exchange rate for FY2014 has been used for ease of comparison.

In illustrating the potential reward the following assumptions have been made:

Element

Minimum performance

Performance in line with expectations

Maximum performance

Fixed pay

Fixed elements of remuneration (base salary, benefits allowance and pension allowance)

Fixed elements of remuneration (base salary, benefits allowance and pension allowance)

Fixed elements of remuneration (base salary, benefits allowance and pension allowance)

Annual bonus

No bonus

30% of salary delivered for achieving target performance

80% of salary delivered for achieving maximum performance

ESOS

No vesting

The expected value of awards based on full vesting of awards of 150% of salary

The expected value of awards based on full vesting of awards of 150% of salary

LTIP (Part I)

No vesting

30% of salary for achieving threshold performance

100% of salary for achieving maximum performance

RECRUITMENT REMUNERATION POLICY +-

When recruiting a new executive Director, the Committee will typically seek to use the policy detailed in the table above to determine the appropriate remuneration package to be offered. To facilitate the hiring of candidates of the appropriate calibre required to implement the Group’s strategy, the Committee also retains the discretion to include any other remuneration component or award which is outside the remuneration policy.

In determining appropriate remuneration, the Committee will take into consideration all relevant factors (including the quantum and nature of remuneration) to ensure the arrangements are in the best interests of the Group and its shareholders.

The Committee may make an award to compensate the prospective employee for remuneration arrangements forfeited on leaving a previous employer. In doing so the Committee will take account of relevant factors regarding the forfeited arrangements which may include the form of any forfeited awards (e.g. cash or shares), any performance conditions attached to those awards (and the likelihood of meeting those conditions) and the time over which they would have vested. These awards or payments are excluded from the maximum level of variable remuneration referred to below; however, the Committee’s intention is that the value awarded or paid would be no higher than the expected value of the forfeited arrangements.

Recruitment awards will normally be liable to forfeiture or “clawback” on early departure (i.e. within the first 12 months of employment). It would be the Committee’s policy that a significant portion of the remuneration package would be variable, linked to stretching performance targets, with an expectation that the maximum level of variable remuneration using existing schemes that may be granted to new Directors (excluding buy-out arrangements or other introductory awards) is 5 times base salary. The Committee will normally require that introductory awards are linked to the achievement of appropriate long term performance targets and will vest only to the extent that the performance conditions and continued employment condition are met.

Where a position is filled internally, any pre-appointment remuneration entitlements or outstanding variable pay elements shall be allowed to continue according to the original terms.

Fees payable to a newly-appointed Chairman or non-executive Director will be in line with the fee policy in place at the time of appointment.

POLICY ON PAYMENT FOR LOSS OF OFFICE +-

Executive Directors

Service Contracts

Each of the executive Directors is employed on a service contract. Details of the service contracts of the executive Directors in office during the year are as follows:

Contract date

Notice period

Unexpired term of contract

Stephen Glancey

9 November 2008, amended 28 February 2012

12 months

n/a

Kenny Neison

9 November 2008, amended 28 February 2012

12 months

n/a

Joris Brams

1 September 2012, amended as of 1 April 2014

12 months

n/a

Compensation on Termination

The service contracts of the executive Directors do not contain any pre-determined compensation payments in the event of termination of office or employment other than payment in lieu of notice. See ‘Implementation’ section on this page below in relation to Joris Brams contracts.

The principles on which the compensation for loss of office would be approached are summarised below:

 

 

Policy

Notice period

None of the executive Directors has a service contract with a notice period in excess of one year. Service contracts for new directors will generally be limited to 12 months’ notice by the Company.

Termination payment / payment in lieu of notice

The Company has retained the right to make payment to the executive Director of 12 months’ salary in lieu of the notice period. Discretionary benefits may also include, but are not limited to, outplacement and legal fees.

Annual bonus

Payment of the annual bonus would be at the discretion of the Committee on an individual basis and would be dependent upon the circumstances of their departure and their contribution to the business during the bonus period in question. A departing Director may be eligible, depending on the circumstances and subject to performance, for payment of a bonus pro-rata to the period of employment during the year, to be payable at the usual time.

Share based payments

The extent to which any award under the ESOS and the LTIP (Part1) will vest and the timescale for exercising an award would be determined based on the leaver provisions contained within the ESOS and LTIP (Part1) rules. These provide that awards may vest and become exercisable in “qualifying leaver” circumstances including death, injury, ill-health, disability, redundancy, retirement or business disposal. In either case, the extent to which an award vests will be determined taking into account the extent to which any performance conditions have been satisfied in the period from the grant date to the date the award becomes exercisable.

 

Under the ESOS, any “qualifying leaver” awards will become exercisable for six months from the date of leaving (or 12 months, in the case of death).

 

Under the LTIP (Part I), most “qualifying leaver” awards will become exercisable for six months from the date of leaving and (unless the Committee determines otherwise) be pro-rated by reference to the time which has elapsed between the grant date and the date of leaving. However, in the case of retirement, LTIP (Part I) awards will vest on the usual vesting date, the third anniversary of the grant date, and become exercisable for six months from that date.

Mitigation

Executive Directors’ service contracts contain no contractual provision for reduction in payments for mitigation or for early payment, and accordingly any payment during the notice period will not be reduced by any amount earned in that period from alternative employment obtained as a result of being released from employment with the Group before the end of the contractual notice period.

Other payments

Payments may be made under the Company’s all employee share plans which are governed by the Irish Revenue Commissioners and HMRC tax-approved plan rules and which cover leaver provisions. There is no discretionary treatment of leavers under these plans.

 

Where on recruitment a buy-out award had been made outside the ESOS or LTIP (Part I), then the applicable leaver provisions would be specified at the time of the award.

The Committee reserves the right to make additional exit payments where such payments are made in good faith in discharge of an existing legal obligation (or by way of damages for breach of such an obligation) or by way of settlement or compromise of any claim arising in connection with the termination of a Director’s office or employment. In doing so, the Committee will recognise and balance the interests of shareholders and the departing executive Director, as well as the interests of the remaining Directors. Where the Committee retains discretion it will be used to provide flexibility in certain situations, taking into account the particular circumstances of the Director’s departure and performance.

 

Non-executive Directors

Letters of appointment

Each of the non-executive Directors in office during the financial year was appointed by way of a letter of appointment. Each appointment was for an initial term of three years, renewable by agreement (but now subject to annual re-election by the members in General Meeting). The letters of appointment are dated as follows:

Non-executive Director

Date of letter of appointment

Sir Brian Stewart

10 February 2010

Stewart Gilliland

17 April 2012

Anthony Smurfit

17 April 2012

John Hogan

26 April 2004

Richard Holroyd

26 April 2004

Breege O’Donoghue

26 April 2004

 

The letters of appointment are each agreed to be terminable by either party on one month’s notice and do not contain any pre-determined compensation payments in the event of termination of office or employment.

IMPLEMENTATION OF THE REMUNERATION POLICY FOR
THE YEAR ENDING 28 FEBRUARY 2015

Information on how the Company intends to implement the policy for the financial year ending 28 February 2015 is set out below.

EXECUTIVE DIRECTORS+-

Service Contracts

The fundamental structure of the remuneration of Stephen Glancey and Kenny Neison remains unchanged from the previous year. Specifically there are no changes to their salary, the maximum rate of the annual bonus, the ESOS and LTIP (Part I) opportunity or the rate of the cash allowance in lieu of pension or benefits in kind.

Changes were made with effect from 1 April 2014 to Joris Brams’ service contract and remuneration, to reflect the greater focus of his role on the United States following the Group’s acquisition of Vermont Hard Cider Company LLC (‘VHCC’) and the services being provided by his service company in respect of Belgian brand development. His existing service contract was split into a USA contract with VHCC and an amended contract with Wm. Magner Limited, with the same aggregate base salary and other terms but with no cash allowance in lieu of pension provision. A consulting contract with his service company was also entered into.

Base salary is split €238,000 (was €366,160) under the international contract and €128,160 under the USA contract, each with a cash benefits allowance of 7.5% of base salary. He is entitled to a bonus opportunity of 80% of base salary under each contract. He continues to be entitled to an ESOS award of 150% of aggregate base salary, under both contracts and an LTIP (Part I) award of 100% of aggregate base salary under both contracts. He is entitled to 12 months’ notice of termination or payment in lieu of notice equal to 12 months’ aggregate base salary.

In addition, C&C IP Sàrl (‘CCIP’) entered into a contract for services effective as of 1 April 2014 with Joris Brams BVBA (‘JBB’),
(a company wholly owned by Joris Brams and family), under which JBB agreed to provide to CCIP brand development services in relation to Belgian products and CCIP agreed to pay monthly fees totalling on an annual basis €91,540 plus VAT. The agreement is terminable by either party on one month’s notice.

Base salaries

The Company’s approach on base salary continues to be to provide a fixed remuneration component which reflects the experience and capabilities of the individual in the role, the demonstrated performance of the individual in the role, and which is competitive in the markets in which the Company operates.

Under their service contracts the base salaries of Stephen Glancey and Kenny Neison are expressed and payable in pounds sterling. The base salary of Joris Brams is expressed and payable in euro.

The salary levels of executive Directors are normally reviewed together with those of senior management annually in January. The salary levels were reviewed in respect of FY2015 and no change is being made to the base salaries of Stephen Glancey and Kenny Neison for the year ending 28 February 2015. Their base salaries have remained unchanged since 2008 other than by reason of promotion. The service contract of Joris Brams is adjusted for the reasons set out above.

The base salaries are as follows:

Year ended 28 February

2014

2015

Stephen Glancey

£585,000 (€691,653*)

£585,000

Kenny Neison

£420,000 (€496,571*)

£420,000

Joris Brams

€366,160

€366,160 in aggregate

with effect from 1 April 2014

* At the average exchange rate in the year.

Benefits

The executive Directors receive a cash allowance of 7.5% of base salary in lieu of benefits such as company car. The Group provides death-in-service cover of four times annual base salary and permanent health insurance (or reimbursement of premiums paid into a personal policy). Directors may also avail of medical insurance under a Group policy (or the Group will reimburse premiums).

Details of the deferred payments due by Stephen Glancey and Kenny Neison under the JSOP, as described on this page, and which give rise to a taxable benefit-in-kind, are unchanged.

Annual bonus

The Committee has reviewed the performance measures and targets for the annual bonus to ensure that they remain appropriately stretching in the current environment and continue to be aligned with the business strategy.

For FY2015, the Committee has approved a bonus scheme for executive Directors by reference to Group adjusted operating profit, under which executive Directors will be entitled to a bonus of 10% of base salary at threshold performance, a bonus of 20% (in total) at an intermediate threshold, 30% on target, and further bonus on a tapering basis in respect of performance above this level up to a maximum of 80% of base salary.

The Company is not disclosing the actual Group bonus profit target as, in the opinion of the Board, this target is commercially sensitive. The Board believes that disclosure of this commercially sensitive information could adversely impact the Company’s competitive position by providing competitors with insight into the Company’s business plans and expectations. Further the Board believes that retrospective disclosure of annual bonus targets may be inappropriate as the targets remain commercially sensitive information and it is not intending to disclose this information at any future time.

Long Term Incentives/ Share based payments

The service contracts of the executive Directors in office at the date of this report entitle them to an annual grant under the ESOS with a face value equal to 150% of base salary and an annual award under the LTIP (Part I) with a face value equal to 100% of base salary.

With respect to awards for the year commencing 1 March 2014, the Committee is reviewing the performance measures and targets for the ESOS and LTIP (Part I) to ensure that the measures continue to be aligned with the business strategy and the targets remain appropriately stretching in the current environment. The performance measures and targets will either continue to be those set out in note 5 (Share-based Payments) to the financial statements, or be no less stretching targets. Where any non-financial measures (such as TSR) are chosen, the Remuneration Committee must in any event be satisfied that the Group’s underlying financial performance warrants the level of vesting indicated by such measure, as supported by a financial underpin or otherwise.

ESOS

The executive Directors will be granted options with a face value of 150% of base salary, based on the exercise price at date of grant.

LTIP (Part I)

Stephen Glancey and Kenny Neison will be granted awards to acquire shares at nominal cost, with a face value of 100% of base salary and Joris Brams will be granted an award to acquire shares at nominal cost, with a face value of 200% of his aggregate base salary, this being an exceptional award to enable him to build up a material equity interest in the Company.

Pensions

No executive Director accrues any benefits under a defined benefit pension scheme. Under their service contracts executive Directors other than Joris Brams will receive a cash payment of 25% of base salary, in order to provide their own pension benefits, inclusive in Kenny Neison’s case of a fixed sterling payment into a personal pension plan.

Legacy Payments

Certain fees that were payable to Joris Brams BVBA (JBB), (a company wholly owned by Joris Brams and family) under an agreement effective 30 January 2012 made between C&C IP Sàrl and JBB and which was terminated on 31 August 2012 will continue to be payable to JBB, as follows.

(a) A deferred introductory incentive fee will be payable on 1 February 2015, with no performance conditions attached, by the payment of a sum equal to 98,600 notional units multiplied by the closing price of C&C Group plc shares on the dealing day before the settlement date. Payment of the fee is subject to the rules of the C&C Group Recruitment and Retention Plan, so far as applicable.

(b) A long term incentive fee was awarded on 17 May 2012 and comprised 87,943 notional units. The award was made subject to the rules of the LTIP (Part I) so far as applicable. Vesting of the award is subject to the achievement of performance conditions equivalent to those applicable for grants made in FY2013 under the LTIP (Part I) and the award will be settled following publication of the Company’s audited results for the financial year 2015 by the payment of a sum equal to the number of units that vest multiplied by the closing price of C&C Group plc shares on the dealing day before the settlement date (see note 5 (Share-based Payments) to the financial statements).

See also note 5 (Share-based Payments) to the financial statements regarding payments that may fall due under or in respect of the Joint Share Ownership Plan.

NON-EXECUTIVE DIRECTORS+-

The fees paid to non-executive Directors are set at a level which aims to attract individuals with the necessary experience and ability to make a significant contribution to the Group. After a review of non-executive Directors’ fees in May 2014 the Board concluded that no increases in the fees paid would be awarded. The annual fees are as follows:

Year ended 28 February

2014

2015

Chairman

€230,000

€230,000

Non-executive Director

€65,000

€65,000

Senior Independent Director

€10,000

€10,000

Chairman of the Audit Committee

€25,000

€25,000

Chairman of the Remuneration Committee

€20,000

€20,000

ANNUAL REPORT ON REMUNERATION
FOR THE YEAR ENDED 28 FEBRUARY 2014

The following parts of the Remuneration Report are subject to audit and have been audited.

DIRECTORS’ REMUNERATION +-

Details of the remuneration for each Director who served during the year ended 28 February 2014 are given below. The comparative figures included have been presented on a consistent basis with the current year.

These valuation methodologies used in this report are those required by the UK Regulations and are different from those applied within the financial statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”).

Further details on the valuation methodologies applied are set out in the notes relating to columns (a) to (e) below. Details of the overall Directors’ remuneration charged to the Group income statement are shown in note 27 (Related Party Transactions) to the financial statements.

SINGLE TOTAL FIGURE OF REMUNERATION +-

The table below reports the total remuneration receivable in respect of qualifying services by each Director during the year ended 28 February 2014 and the prior year.

Salary/fees (a)

Taxable benefits (b)

Annual Bonus (c)

Long term incentives (d)

Pension related benefits (e)

Total

Total

Year ended 28 February

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

€’000

€’000

€’000

€’000

€’000

€’000

€’000

€’000

€’000

€’000

€’000

€’000

Executive Directors

Joris Brams

366

130

27

10

55

0

0

0

92

33

540

173

Stephen Glancey

692

719

56

58

104

0

127

364

173

180

1,152

1,321

Kenny Neison

497

516

41

42

74

0

91

218

124

129

827

905

Sub-total

1,555

1,365

124

110

233

0

218

582

389

342

2,519

2,399

 

 

 

 

 

 

 

 

 

 

 

 

Non-Executive Directors

 

 

 

 

 

 

 

 

 

 

 

 

John Burgess

13

65

0

0

0

0

0

0

0

0

13

65

Stewart Gilliland

65

57

0

0

0

0

0

0

0

0

65

57

John Hogan

90

90

0

0

0

0

0

0

0

0

90

90

Richard Holroyd

75

75

0

0

0

0

0

0

0

0

75

75

Philip Lynch

0

64

0

0

0

0

0

0

0

0

0

64

Breege O’Donoghue

85

68

0

0

0

0

0

0

0

0

85

68

Anthony Smurfit

65

57

0

0

0

0

0

0

0

0

65

57

Sir Brian Stewart

230

230

0

0

0

0

0

0

0

0

230

230

Sub-total

623

706

0

0

0

0

0

0

0

0

623

706

2,178

2,071

124

110

233

0

218

582

389

342

3,142

3,105

 

 

 

 

 

 

 

 

 

 

 

 

Average number of executive Directors

3

2

Average number of non-executive Directors

6

7

Notes to the Remuneration Table

Column (a) Salaries and fees

(1) The amounts shown are the amounts earned in respect of the financial year.

(2) The Board released Joris Brams to serve on the Board of Democo as a non-executive Director. He received and retained an annual fee of €5,000 in relation to this role.

(3) The fees payable to the following non-executive Directors include fees paid in respect of the roles held by them as shown below.

2014

2013

€’000

€’000

John Hogan

Chairman of Audit Committee

25

25

Richard Holroyd

Senior Independent Director

10

10

Philip Lynch

Chairman of Remuneration Committee

0

15

Breege O’Donoghue

Chairman of Remuneration Committee

20

3

Column (b) Benefits

(1) The executive Directors received a cash allowance of 7.5% of base salary. The Group provided death-in-service cover of four times annual base salary and permanent health insurance (or reimbursement of premiums paid into a personal policy). S. Glancey and K. Neison also availed of medical insurance under a Group policy.

(2) When an award is granted to an executive under the Joint Share Ownership Plan, its value is assessed for tax purposes with the resulting value being deemed to fall due for payment on the date of grant. Under the terms of the Plan, the executive must pay the Entry Price at the date of grant and, if the tax value of the award (i.e. the initial unrestricted market value) exceeds the Entry Price, the executive must pay a further amount, equating to the amount of such excess, before a sale of the awarded Interests. The deferral of the payment of the further amount is considered to be an interest-free loan by the Company to the executive and a taxable benefit-in-kind arises, charged at Revenue stipulated rates (Ireland 13.5%; UK 4.0%). The resulting loans by the Company to the executive Directors are required to be disclosed under the Companies Act 1990. The balances of the loans outstanding to the executive Directors as at 28 February 2014 and 28 February 2013 are as follows:

28 February 2014

28 February 2013

€’000

€’000

Stephen Glancey

111

111

Kenny Neison

83

83

Total

194

194

When the further amount is paid, the Company compensates the executive for the obligation to pay this further amount by paying him an equivalent amount, which is, however, subject to income tax in the hands of the executive.

Further details of the Joint Share Ownership Plan are given in note 5 (Share-based Payments) to the financial statements. No further awards can be made. All extant awards are fully vested.

Column (c) Annual Bonus

(1) The amounts shown are the total bonus earned under the annual bonus scheme in respect of the financial year.

(2) For the year ended 28 February 2014, the annual bonus for executive Directors was based on performance against an operating profit target. The maximum bonus opportunity was 80% of salary. For the year ended 28 February 2014 the Committee determined that bonuses should be paid to the executive Directors at the rate of 15% of base salary.

(3) The Company is not disclosing the actual Group operating profit target as, in the opinion of the Board, this target is commercially sensitive. The Board believes that disclosure of this commercially sensitive information could adversely impact the Company’s competitive position by providing competitors with insight into the Company’s business plans and expectations. Further the Board believes that retrospective disclosure of annual bonus targets may be inappropriate as the target remains commercially sensitive information and it is not intending to disclose this information at any future time.

Column (d) Long term incentives

(1) The amounts shown in respect of long term incentives are the values of awards where final vesting is determined as a result of the achievement of performance measures or targets relating to the financial year and is not subject to achievement of further measures or targets in future financial years.

(2) For the year ended 28 February 2014, the amount shown is the deemed value of the LTIP (Part I) awards granted during February 2012 that will partly vest during February 2015. For the year ended 28 February 2013, the amount shown is the market value of the ESOS options granted during May 2010 that vested during May 2013.

FY2014

ESOS

In respect of the options granted in May 2011 under the ESOS, the performance measure and target were as set out in note 5 (Share-based Payments) to the financial statements in respect of the ESOS. The Committee determined that the Company’s adjusted EPS growth over the three year performance period commencing 1 March 2011 and ending 28 February 2014 was 4.01% in excess of Irish CPI. Accordingly the performance condition was not met and the options therefore did not vest.

LTIP

In respect of the options granted in February 2012 under the LTIP (Part I) the performance measures were as set out in note 5 (Share-based Payments) to the financial statements. The Committee determined that the Company’s adjusted EPS growth over the three year performance period commencing 1 March 2011 and ending 28 February 2014 was 4.01% in excess of Irish CPI and accordingly that performance was in excess of the threshold under the EPS performance condition of the LTIP (Part I) and the options therefore partly vested.

The Committee determined that Company’s TSR performance over the three year performance period commencing 1 March 2011 and ending 28 February 2014 was less than the median performance of the comparator group and accordingly performance did not achieve the threshold under the TSR performance condition and the options therefore did not vest as to this tranche. The Committee also determined that the EPS underpin was not met.

Accordingly the Committee determined that in aggregate 15.05% of the awards should vest. The market price at the date of vesting is not yet ascertainable and therefore the value attributed to the vested awards for each Director has been calculated by multiplying the number of options that will vest by the difference between the average share price over the quarter ending 28 February 2014 (€4.4077) and the exercise price per option (€0.01).

FY2013

For the year ended 28 February 2013, in respect of the options granted in May 2010 under the ESOS the performance measure and target were as set out in note 5 (Share-based Payments) to the financial statements. The Committee determined that the Company’s EPS growth over the three year performance period commencing 1 March 2010 and ending 28 February 2013 was 7.66% in excess of Irish CPI and accordingly that the performance condition was met and the options vested. To calculate the value attributed to the vested options for each Director the difference between the share price at the date of vesting (€4.76) and the exercise price per option (€3.205) has been multiplied by the number of options.

(3) Within the financial statements the amounts recognised within the income statement is calculated on the basis explained in accounting policies. See note 5 (Share-based Payments) to the financial statements for further details. The total expense in respect of long-term incentives relating to the Directors that was recognised within the income statement is as follows:

J. Brams (including cash settled award to Joris Brams BVBA): €0.2m (FY2013: nil)

S. Glancey: nil (FY2013: €0.6m)

K. Neison:€0.1m (FY2013: €0.4m)

Column (e) Pensions related benefits

No executive Director accrued any benefits under a defined benefit pension scheme. Under their service contracts each of the executive Directors received a cash payment of 25% of base salary, in order to provide their own pension benefits, inclusive in Kenny Neison’s case of a fixed sterling payment into a personal pension plan.

FORMER DIRECTORS+-

No payments were made to past Directors during the year ended 28 February 2014 in respect of services provided to the Company as a Director.

There were no payments made to Directors for loss of office during the year ended 28 February 2014.

DIRECTORS’ SHAREHOLDINGS AND SHARE INTERESTS +-

Shareholding guidelines

The Company does not impose minimum shareholding requirements on executive Directors. However, Stephen Glancey and Kenny Neison have significant shareholdings in the Company as set out below, currently representing as at year-end approximately 36 times and 25 times their respective base salary, well in excess of usual formal shareholding guidelines (generally between one and 2½ times base salary). Joris Brams, who was appointed to the Board in 2012, has indicated his intention of building up his shareholding in the Company to approximately two times base salary. The Remuneration Committee is therefore of the view that the executive Directors’ interests are sufficiently aligned with those of other shareholders without the need for additional shareholding guidelines.

Directors’ Interests in Share Capital of the Company

The interests of the Directors and the Company Secretary in office at 28 February 2014 in the share capital of Group companies at the beginning of the year (or date of appointment if later) and the end of the year were:

Interests in ordinary shares of €0.01 Each in C&C Group plc

28 February 2014

Total

1 March 2013 (or date of appointment if later)

Directors

Joris Brams

77,777

69,777

Stephen Glancey

5,120,000

5,120,000

Stewart Gilliland

12,000

0

John Hogan

10,597

10,432

Richard Holroyd

46,493

45,769

Kenny Neison

2,561,530

2,561,530

Breege O’Donoghue

61,930

60,961

Anthony Smurfit

300,000

300,000

Sir Brian Stewart

200,000

100,000

Total

8,390,327

8,268,469

Company Secretary

Paul Walker

90,200

63,200

Notes

(i) All the above holdings are beneficial interests except as stated in (ii) below.

(ii) The interests of Stephen Glancey and Kenny Neison include Interests in shares acquired and jointly held with the trustees of the C&C Employee Benefit Trust under the Company’s Joint Share Ownership Plan, which at 28 February 2014 and at 28 February 2013 comprised 3,413,334 shares in respect of Stephen Glancey and 2,560,000 shares in respect of Kenny Neison (see note 5 to the financial statements for further details).

The Directors and the Company Secretary have no beneficial interests in any of the Group’s subsidiary undertakings.

There was no movement in the Directors’ or the Company Secretary’s interests in C&C Group plc ordinary shares between 28 February 2014 and 20 May 2014.

Share incentive scheme interests awarded during year+-

On 16 May 2013 Joris Brams was granted the following awards:

(a) Under the ESOS he was granted options to subscribe for 115,629 shares at €4.75 each, being the closing price on the dealing day before the date of grant, and in aggregate equivalent at the subscription price to 150% of his base salary. At a price of €4.76 per share, the closing price on the date of grant, the options had an aggregate face value of €550,394. The options are subject to the performance conditions set out in note 5 (Share-based Payments) to the financial statements. If the minimum performance is achieved, 100% of the options vest.

(b) Under the LTIP (Part I) he was granted options to subscribe for 154,172 shares at €0.01 each being the nominal value, and in aggregate equivalent at the closing price on the dealing day before the date of grant, to 200% of his base salary. At a price of €4.76 per share, the closing price on the date of grant, the options had an aggregate face value of €733,859. The options are subject to the performance conditions set out in note 5 (Share-based Payments) to the financial statements in relation to the LTIP (Part I). If the minimum performance is achieved, 30% of the options vest. The companies in the comparator group for this award were as follows: Anheuser-Busch Inbev N.V., Carlsberg Breweries A/S, Constellation Brands Inc., Diageo plc, Heineken Holding N.V., Molson Coors Brewing Company, Remy Cointreau SA, SABMiller plc, Britvic plc, Greene King plc, Marston’s plc, Young & Co.’s Brewery plc and AG Barr plc.

No price was paid for any award of options.

Stephen Glancey and Kenny Neison waived their contractual annual entitlements to awards under the ESOS and the LTIP (Part I) in respect of FY2014.

Directors’ Interests in Options+-

Interests in options over ordinary shares of €0.01 each in C&C Group plc

Date of grant

Exercise price

Scheme

Exercise period

Total at 1 March 2013 (or date of appointment if later)

Awarded in year

Exercised in year

Lapsed in year

Total at 28 February 2014

Weighted average price

Directors

 

 

 

 

 

 

 

 

 

 

Joris Brams

16/5/2013

€ 0.00

LTIP (Part I)

 16/5/16 - 15/11/16 

nil

154,172

154,172

16/5/2013

€4.75

ESOS

16/5/16 - 15/5/20

nil

115,629

115,629

Total

nil

269,801

0

0

269,801

€2.04

 

 

 

 

 

Stephen Glancey

13/05/09

€ 1.94

ESOS

13/5/12 - 12/5/16

386,600

(386,600)

(i)

0

26/05/10

€ 3.205

ESOS

26/5/13 - 25/5/17

234,100

234,100

24/05/11

€ 3.607

ESOS

24/5/14 - 23/5/18

207,957

(207,957)

0

29/02/12

€ 0.00

LTIP (Part I)

1/3/15 - 28/8/15

191,186

(162,413)

28,773

17/05/12

€ 0.00

LTIP (Part I)

17/5/15 - 16/11/15

207,317

207,317

17/05/12

€ 3.525

ESOS

17/5/15 - 16/5/19

310,975

310,975

Total

1,538,135

0

(386,600)

(370,370)

781,165

€ 2.36

 

 

 

 

 

Kenny Neison

13/05/09

€ 1.94

ESOS

13/5/12 - 12/5/16

232,000

(232,000)

(i)

0

26/05/10

€ 3.205

ESOS

26/5/13 - 25/5/17

140,500

140,500

24/05/11

€ 3.607

ESOS

24/5/14 - 23/5/18

124,774

(124,774)

0

29/02/12

€ 0.00

LTIP (Part I)

1/3/15 - 28/8/15

137,262

(116,604)

20,658

17/05/12

€ 0.00

LTIP (Part I)

17/5/15 - 16/11/15

148,843

148,843

17/05/12

€ 3.525

ESOS

17/5/15 - 16/5/19

223,264

223,264

Total

1,006,643

0

(232,000)

(241,378)

533,265

€ 2.32

Date of grant

Exercise price

Scheme

Exercise period

Total at 1 March 2013 (or date of appointment if later)

Awarded in year

Exercised in year

Lapsed in year

Total at 28 February 2014

Weighted average price

Company Secretary

Paul Walker

29/06/10

€ 0.00

R&R

1/6/11 - 31/5/17

27,000

(27,000)

(ii)

0

02/06/10

€ 3.21

ESOS

1/6/13 - 31/5/18

127,200

127,200

29/06/11

€ 0.00

LTIP (Part I)

29/6/14 - 28/12/14

35,380

(30,055)

5,325

17/05/12

€ 0.00

LTIP (Part I)

17/5/15 - 16/11/15

40,754

40,754

17/05/12

€ 0.00

R&R

17/5/14 - 16/5/19

122,264

122,264

 

 

 

Total

352,598

0

(27,000)

(30,055)

295,543

€ 1.38

(i) market price at date of exercise: €4.584

(ii) market price at date of exercise: €4.611

 

 

 

 

 

Key: ESOS - Executive Share Option Scheme; LTIP (Part I) - Long Term Incentive Plan (Part I); R&R - Recruitment and Retention Plan.

No price was paid for any award of options. The price of the Company’s ordinary shares as quoted on the Irish Stock Exchange at the close of business on 28 February 2014 was €4.922 (2013: €4.895). The price of the Company’s ordinary shares ranged between €3.750 and €5.187 during the year.

There was no movement in the interests of any of the Directors or the Company Secretary (save for the lapsing of 79,447 options awarded to him under the R&R in 2012) in options over C&C Group plc ordinary shares between 28 February 2014 and 20 May 2014.

The following sections of the Remuneration Report are not subject to audit.

Performance graph and table+-

This graph shows the value, at 28 February 2014, of €100 invested in the Company on 28 February 2009 compared to the value of €100 invested in the ISEQ General Index. The relevant index has been selected as a comparator because the Company is a member of that index.

171066.png

CHIEF EXECUTIVE OFFICER +-

Five Year Record

The following table sets out information on the remuneration of the Chief Executive Officer for the five years to 28 February 2014:

Total

Remuneration

€’000

Annual Bonus

(as % of maximum

opportunity)

Long term incentives

vesting

(as % of maximum

number of shares)

FY2010

John Dunsmore (note)

5,525

Nil

100%

FY2011

John Dunsmore

989

Nil

100%

FY2012

John Dunsmore (to 31/12/11)

1,126

75%

100%

FY2012

Stephen Glancey (from 1/1/12)

956

75%

100%

FY2013

Stephen Glancey

1,321

Nil

100%

FY2014

Stephen Glancey

1,152

18.75%

7%

Note: FY2010 includes vesting of awards over a number of years

John Dunsmore retired as Chief Executive Officer on 31 December 2011 and Stephen Glancey was appointed with effect from 1 January 2012, having previously been Chief Operating Officer. The salary, benefits and bonus figures are calculated for the period in office.

Change in CEO’s remuneration

The table below sets out in relation to salary, taxable benefits and annual bonus the percentage change in remuneration for the Chief Executive Officer for the financial year ended 28 February 2014 compared with the previous financial year.

Change in Total

Remuneration

Change in Base Salary

Change in Taxable Benefits

Change in Annual Bonus

Chief Executive Officer

-10%

Nil %

Nil %

€104,000

Employees’ Pay Comparison

Comparable figures are not given for the Group’s employees as a whole on the basis that substantial changes to the Group’s workforce during the year make it impractical to calculate these figures. Information on employee remuneration is given in note 4 to the financial statements. The ratio of the average remuneration of executive Directors to the average remuneration of the employees of the Group (excluding Directors) was 19:1 (FY2013: 18:1).

RELATIVE IMPORTANCE OF SPEND ON PAY+-

The following table sets out the percentage change in dividends and the overall expenditure on pay (as a whole across the organisation).

FY2014

FY2013

% change

Dividends1

€31.0m

€28.4m

9%

Overall expenditure on pay2

€94.2m

€75.6m

25%

Other significant uses of cashflow3

€20.6m

€232.7m

1. As per note 9 to the financial statements

2. As per note 4 to the financial statements

3. Acquisitions of businesses and equity accounted investees as per note 11 to the financial statements



This report was approved by the Board and signed on its behalf by

Breege O’Donoghue

Chairman of the Remuneration Committee
20 May 2014