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Remuneration Reports / NWR NV / Remuneration Report 2013 

Remuneration Report

The Remuneration Report explains the main principles and rules regarding the remuneration of the Directors of the Company and also provides details of Directors’ remuneration for the year ended 31 December 2013..

Remuneration Committee

Following the UK redomiciliation, the Company does no longer maintain the Remuneration Committee and as of 6 May 2011, the Remuneration Committee exists at the level of NWR Plc. The Remuneration Committee is chaired by Bessel Kok (senior independent director of NWR Plc) and the other members are Hans-Jörg Rudloff (Independent Non-Executive Director) and Zdeněk Bakala (non-independent non-executive director of NWR Plc).

Directors’ Remuneration Policy

This part of the report sets out the Company’s policy on the remuneration of its Directors and will be proposed for approval by the sole shareholder at the 2014 AGM.

Remuneration of Executive Directors

The objective of the remuneration policy is to attract, retain and motivate high value executives by providing well-balanced remuneration packages. The remuneration policy aims to ensure that a competitive remuneration package for the Executive Directors is maintained and benchmarked against other multinational companies based in Europe and operating in global markets. Levels of remuneration should be sufficient to attract, retain and motivate Directors of the quality required to run the Group successfully, but should not be more than is necessary. A significant proportion of Executive Directors’ remuneration will be structured so as to link rewards to corporate and individual performance. There will be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director may be involved in deciding his or her own remuneration.

The Remuneration Committee sets the contractual terms, salary, bonuses and other benefits of the Executive Directors. It also approves and evaluates the performance criteria set under the Company’s and NWR Plc’s share plans for every bonus year, which is a period during which the annual bonus is awarded, commencing on 1 January and ending on 31 December of the relevant calendar year. The remuneration package for Executive Directors includes a significant variable element in the form of a cash bonus incentive and a long-term incentive in the form of deferred shares and stock options. As explained below, the Remuneration Committee ensures that an appropriate balance between the fixed and performance-related elements of executive remuneration is maintained.

The Remuneration Committee analyses executive remuneration in terms of the pay policy of the Company as a whole, pay and conditions elsewhere in the Group and the overall costs to shareholders. Periodic reporting will ensure that the Remuneration Committee receives the required information and is kept up-to-date with any changes, so that these can be taken into account when considering the remuneration of Executive Directors.

Element of remuneration How it works  How it supports
NWR’s strategy
Maximum which
may be paid
Details of performance
Base salary Salary is paid monthly. It typically includes fees for membership of the Board committees and directorships in other entities of the NWR Group. To ensure remuneration remains effective in supporting the Group’s business objectives, the Remuneration Committee annually reviews base salary levels, taking into account external benchmarks, market conditions, individual performance, Group performance and changes in responsibility. The maximum base salary is EUR 500,000, including any directors’ fees. Not applicable
Benefits in kind The Company offers Executive Directors a range of benefits, such as relocation allowances, car allowance, housing, private medical and accident insurance, life assurance, pension, education for children, personal training and access to external advice when necessary. The non-cash benefits are subject to individual agreements. Executive Directors are not entitled to any benefit upon termination of their employment agreement other than the contractual benefits that apply during the notice period. Offering market-competitive levels of benefits in kind aims to attract and retain executives of high calibre. The total annual value of benefits in kind may not exceed EUR 300,000 for each Executive Director. Subject to that limit, the Remuneration Committee annually reviews the value of benefits in kind. Not applicable
Annual bonus1,3 The Remuneration Committee sets, for the financial year, performance criteria and the percentage of any bonus that will be paid in the form of a Deferred Bonus Award. After the end of the financial year, the Remuneration Committee decides whether an Executive Director is eligible for a bonus in respect of the financial year, determines the extent to which performance criteria have been met and determines the total bonus amount. A portion of a bonus will be paid in cash and a portion will be paid in the form of a Deferred Bonus Award. The Remuneration Committee may attach vesting conditions to the Deferred Bonus Award. It will normally vest three years after grant or such other period as the Remuneration Committee may set. Performance criteria for bonus awards ensure close alignment of remuneration with delivery on key strategic goals. The total bonus amount (including the Deferred Bonus Award) may not be more than 300 per cent of the base salary of each Executive Director. The actual amount is determined on the basis of evaluation of performance criteria by the Remuneration Committee. The full bonus will be paid if the targets for EBITDA, production and OPEX, as budgeted for every year, are all met. Every year the Remuneration Committee sets the thresholds and targets for each criterion. Performance criteria apply cumulatively so no bonus is paid if any of the thresholds are not met. In the opinion of the Board, the targets set for the performance criteria will be commercially sensitive. As permitted by the regulations, they are not being disclosed in advance.
Long Term Incentive Plan
(‘LTIP’): LTI Award2,3
Effective as of 1 January 2013, the LTIP is designed to provide awards in fully paid A shares of NWR Plc which will normally vest three years after the grant date or such other period as the Remuneration Committee may set when the LTI Award is granted. When granting an LTI Award, the Remuneration Committee may attach vesting conditions to it. These may be linked to the performance of the Company, the Director or any other factors. An LTI Award can only be granted if the Director is entitled to a bonus in the year. The LTIP enhances the Board’s ability to retain and incentivise Executive Directors and gives the Board the flexibility to adapt to future changes in business environment, law, tax and best market practice. The aggregate market value (at the time of the grant) of the shares subject to any LTI Award may not exceed 300 per cent of base salary. The amount of the LTI Award is determined by the  Remuneration Committee in accordance with the performance measures. The LTI Awards will typically be settled by the issue of new shares. The Company uses a balanced scorecard format, as described below (the ‘Balanced Scorecard’). Three levels of attainment are defined in advance for the grant  of the LTI Awards - target, stretch and super-stretch, the achievement of which over the financial year preceding the year of grant, will determine the actual size of the LTI Awards. An LTI Award at ‘target’ would be 100 per cent of base salary, at ‘stretch’ would be 200 per cent and at ‘super-stretch’ would be at 300 per cent. The qualifying conditions for the LTI Awards to be granted to the Executive Directors are financial criteria (25 per cent; covering EBITDA, net income, pre-dividend cash flow), operations (25 per cent; covering LTIFR, unit cost, coking coal sales), customers and supplier relationships (12.5 per cent), organisational effectiveness (12.5 per cent) and delivery on growth strategy (25 per cent).
Pension The Company currently offers a contribution (expressed as a percentage of base salary) to a defined contribution pension scheme. The Company does not set aside or accrue amounts to provide pension, retirement or similar benefits. Offering pension allowance helps us attract and retain executives of high calibre. The maximum amount payable is 5 per cent of base salary. N/A
It is the Company’s policy to honour any commitments made to a Director before this remuneration policy took effect or before he or she became a Director. This may include satisfying entitlements to remuneration payments or payments for loss of office.

(1) The Company adopted the DBP on 8 April 2011. A modification of the DPB allowing for the grant of LTI Awards was approved by the shareholders of NWR Plc and took effect on 26 April 2013. Several other changes that did not require shareholder approval were made at the same time and the name of the DBP was changed to the Long Term Incentive Plan. If, in relation to any Deferred Bonus Award granted before 26 April 2013, there is any conflict between the LTIP and the DBP as they applied on that date, the latter will prevail.
(2) By focusing not only on financial outcomes but also on the operational, marketing and developmental inputs to these outcomes, the Balanced Scorecard provides a comprehensive connection with NWR’s strategy. The Remuneration Committee ensures that these are fully aligned. The Balanced Scorecard consists of quantitative (financial and operational) and qualitative (customers and suppliers, organisational effectiveness and growth strategy) performance criteria, which shall apply as relevant to each Executive Director and his area of responsibility.
(3) In addition to the rules and principles already described in the table above, the following LTIP rules also apply:

Timing of awards: The awards will normally be granted within 42 days of the announcement of theGroup’s results for any period but may be granted at other times (e.g. on recruitment).
Put option: For a period of three years after vesting, the Director has the right to sell shares acquired on vesting and receive at least the market value of a share at the time of vesting. This right lapses earlier if the Director leaves NWR or otherwise sells his shares.
No dividend and no transfer: The Directors are not entitled to vote, to receive dividends or to have any other shareholder rights in respect of shares subject to an award until they are issued or transferred to him. Similarly, they may not, except on death, transfer, assign or dispose of an award, otherwise the award will immediately lapse.
Adjustment: If there is a variation in the Company’s capital (including a capitalisation or rights issue, sub-division, consolidation or reduction of share capital), a demerger, a special dividend or distribution or any other corporate event which might affect the current or future value of any award, the Remuneration Committee may adjust the number or class of shares subject to the award.
Clawback provisions: If the Board considers that extraordinary circumstances have occurred during or after the period over which the predetermined performance criteria have been or should have been achieved, which lead to an unfair result with respect to the grant or vesting of an award, the Board retains the discretionary power to reduce the values or delay the vesting date as appropriate. If any variable remuneration, be it in the form of cash or A shares of NWR Plc, has been paid or awarded or has vested on the basis of incorrect financial or other data, the Board is entitled to recover such remuneration from the Director. This right of recovery exists irrespective of whether the Director was responsible for the incorrect financial or other data or was aware or should have been aware of the incorrectness.
Termination: If the Director leaves employment from the NWR Group due to death, illness or disability, retirement at normal retirement age or early retirement with the agreement of his employer, the Director’s employing company ceasing to be under control of any member of the NWR Group, change of control or authorised leave of absence (‘good leaver’), his award will not lapse and will continue in effect. Alternatively, the Board may decide that it will vest in full on the date he leaves employment. If the Director leaves in other circumstances, his award will lapse. The Board may, at its discretion, decide to treat a Director who leaves employment for any other reason as if he were a good leaver, and vice versa. The Board will not normally exercise this discretion if it would be inappropriate given overall performance of the NWR Group or the Director or for other reasons the Board may determine.
Takeovers: Unless exchanged for a new award, the awards will vest on the date of a takeover. The number of shares in respect of which it vests will be reduced by reference to the period up to the normal vesting date which has elapsed before the date of the takeover and it will lapse as to the balance. A takeover typically occurs where a general offer to acquire shares becomes wholly unconditional or a person obtains control of the Company. Instead of vesting, the awards may be exchanged for a new award to the extent it is accepted by the Director and with the consent of the acquiring company or the Board pays the Director an amount equal to the market value of the shares subject to his award.
Amendments: The Board may at any time change the LTIP in any way including the terms of any award already granted or any bonus condition or vesting condition. Shareholder approval is required for amendments to the advantage of participants which relate to, amongst other things, the people who can be granted the LTI Awards, the limits on the number of shares which may be issued under the LTIP, the individual limits on the LTIP, the adjustment of the LTIP Awards if there is a capitalisation issue, rights issue or open offer, sub-division or consolidation of shares or reduction of capital or any other variation of capital. But amendments to performance criteria and certain other minor amendments can be made without shareholder approval.

(4) In addition to the items in the policy table, there are two arrangements forming part of the on-going policy applicable to the Executive Directors.

Gareth Penny - The option plan of Mr Penny was agreed as a condition of employment, in order to attract and secure a unique and high-quality candidate for the top-level position. On 3 September 2012, NWR Plc granted Mr Penny 250,000 share options over A shares of NWR Plc in three equal tranches (representing an aggregate of 750,000 ordinary A shares). Each share option gives Mr Penny the right to acquire one A share of NWR Plc for an exercise price of EUR 0.01. Each tranche vests equally over three years representing one third of the options each year (first tranche on the first, second and third anniversary of the grant date, second tranche on the second, third and fourth anniversary of the grant date and lastly third tranche on the third, fourth and fifth anniversary of the grant date). The options vest subject to Mr Penny remaining employed by NW Plc. If he ceases to be an employee, all unvested options will immediately vest, unless he ceases by reason of death, illhealth, injury, dismissal by NWR Plc or in connection with any other circumstances determined by the Directors at their discretion. Upon change of control the options lapse and may be, at the discretion of the Directors, replaced by equivalent options in the company that obtains control. The Directors may change the option plan, but changes to the advantage of Mr Penny in the number of shares, beneficiary, exercise price and certain other rights are subject to an ordinary resolution of the general meeting. Adjustments can be made in the event of a rights issue, demergers or other variation of capital in any way the Directors consider appropriate to reflect such variation.

Marek Jelínek – Mr Jelínek received certain stock options under the Stock Option Plan of the Company (the ‘SOP’). For the details on their SOP awards, please see the ‘Scheme Interests’ table on page 102. Due to the implementation of the DBP, granting of options was discontinued as of 31 December 2010 and the SOP continues only in relation to options granted prior to that date. In connection with the UK redomiciliation, NWR Plc has granted equivalent (rollover) options over NWR Plc A shares to the Executive Directors who participated in the SOP. These rollover options continue on the same terms and conditions as applied to the options granted originally under the SOP (with appropriate adjustments). The vesting period is three years. For each year during the vesting period, one third of the granted options became eligible for vesting. 50 per cent of the options vested if the EBITDA threshold was achieved, and 100 per cent of the options vested if the EBITDA target was achieved. Vesting between threshold and target was on a straight-line basis. 2013 was the last year in which options granted under the SOP became eligible for vesting. Options can be exercised from the vesting date until the eighth anniversary of the date of award. Options, which have not been exercised will lapse on the eighth anniversary of their grant. Options may, however, be exercised early under certain circumstances, including certain terminations of employment and in the event of a takeover (change of control), scheme of arrangement or winding up. Options are not transferable and may only be exercised by the persons to whom they are granted.

(5) Other than as described above, there are no components of the Executive Directors’ remuneration that are not subject to performance criteria.
(6) All of the items now proposed for inclusion in the Directors’ remuneration policy formed part of the previous policy and none of them has been changed.
(7) The remuneration policy for the Executive Directors applies in unchanged form to our key executives, though the levels of awards tend to be lower than those offered to the Executive Directors and their individual performance criteria usually include elements relating to parts of the business for which the individual executive is responsible.
(8) For senior management personnel of the Group, pay comprises base salary, various allowances provided in cash or kind, eligibility for the Deferred Bonus Awards and participation in the SOP before its discontinuation in 2010. Workers and miners are remunerated in line with the collective agreements agreed between OKD’s management and the trade unions. Their pay comprises base tariff wages, holiday and Christmas bonuses and bonuses linked to performance. In addition, they can receive benefits in cash or in kind (such as pension allowance, life insurance, reimbursement of physiotherapies and various leisure activities, cafeteria plans, etc.). Underground workers also receive two weeks of paid holidays in addition to the statutory holiday of the Czech Republic.

Approach to Recruitment Remuneration

In general, the starting point for negotiations with new recruits will be the policy described above. However, the Board (or the Remuneration Committee, as appropriate) may provide oneoff benefits (or ad hoc share incentive plan awards) to new-joiners for recruitment purposes or to employees (including Executive Directors) upon promotion or for retention purposes. The maximum level of variable remuneration payable to a new recruit or the maximum size of a retention or promotion award is 600 per cent of annual base salary. This would not include any buy-out awards. In addition, performance criteria applicable to the LTI Awards would apply on retention awards.

Service Contracts of Executive Directors

Service contracts of Executive Directors provide for payment of salary alone in lieu of notice and statutory severance payment. A right to any benefits accrued or claimed under any sharebased incentive plan or pension plan will be determined in accordance with the governing documents of the relevant plan (described above). Any accrued but unpaid holiday pay will be paid on termination. Apart from that no other payments for loss of office will be made.

The notice periods will be no more than 12 months but different notice periods may be agreed as described below. They are set on a discretionary basis and subject to the Director’s position. Generally, the more specialised the position or the greater the degree of responsibility associated with it, the longer the period of notice awarded. Among the factors considered by the Remuneration Committee in assessing the period of reasonable notice are length of service and character of employment.

The service contracts are available at the Company’s registered office. The current contracts
provide the following notice periods

Name Date of appointment Termination date Notice period
Gareth Penny 3 September 2012
Twelve months’ notice by NWR Plc; six
month’s notice by Director
Marek Jelínek 31 March 2011 Six months’ notice by NWR Plc; three
month’s notice by Director

Remuneration of Non-Executive Directors

The Remuneration Committee advises the Board in relation to its responsibilities with respect to the remuneration of Non-Executives Directors.

The term of appointment of the Non-Executive Directors is four years, subject to satisfactory performance and re-election when appropriate at the annual general meeting of shareholders. One-month notice period applies for the termination of each Non-Executive Director‘s letter of appointment. Unless the appointment as a Non-Executive Director is renewed on, or prior to the termination date, the term as a Non-Executive Director shall lapse immediately after the termination date. The appointment may also be terminated at any time by the general meeting. None of the Non-Executive Directors is entitled to any benefit on termination of his letter of appointment.

Directors’ fees shall from time to time be determined by the Board. The basic annual fee payable to the Non-Executive Directors is reviewed annually by the Remuneration Committee. As of 1 May 2013, the Non-Executive Directors receive an annual fixed fee of EUR 68,459. This amount reflects the time commitment and responsibilities of the role. In addition to the annual fixed fee, the chairman of the Real Estate Committee receives an annual fee of EUR 22,820 and its members receive EUR 11,409.

NWR does not operate an equity plan for the Non-Executive Directors and they do not participate in the LTIP; nor may they receive any bonus. Non-Executive Directors are not be entitled to any non-cash benefits. No personal loans, guarantees or other similar instruments may be provided to Non-Executive Directors.

Non-Executive Directors may be reimbursed for all reasonable and documented expenses incurred in performing their role.

Remuneration of Directors in financial year 2013

Single Total Figures for Executive Directors’ Remuneration

The table below shows the pre-tax remuneration of Executive Directors for the fiscal year ended 31 December 2013.

Salary and
Value of
option awards
Gareth Penny2 355,343  9,756  0 74,728 26,667 466,494
Marek Jelínek3 212,573  80,843  0 -84,307 0 293,416


(1) The remuneration includes the remuneration received for directorships in both NWR and NWR Plc. 
(2) Mr Penny’s contractual annual salary is EUR 400,000. In the period from 1 May until 31 December 2013, his annual salary was reduced by 10 per cent to EUR 360,000 as part of the personnel cash saving measures. The components of Mr Penny’s taxable benefits were health insurance (EUR 9,756) and liability insurance (EUR 14,942). Mr Penny’s total remuneration includes a face value of 83,333 stock options vested on 3 September 2013 in line with his option plan described in footnote 4 below the policy table. The options were not linked to any performance criteria. They are included in this table to set out all items of Mr Penny’s remuneration in 2013. In line with Mr Penny’s employment contract, NWR Plc contributes, in monthly arrears, 5 per cent of his annual base salary to his personal pension arrangements. In 2013, Mr Penny received an annual fee of CHF 233,659 from Julius Baer Holding Ltd for his nonexecutive directorship and USD 75,000 for his position on the advisory board of TowerBrook Capital Partners. He also accepted a non-executive directorship in Norilsk Nickel, which he joined during the year.
(3) Mr Jelínek’s contractual annual salary is EUR 290,000. In the period from 1 May until 31 December 2013, his annual salary was reduced by 10 per cent to EUR 261,000 as part of the personnel cash saving measures. Mr Jelínek’s taxable benefits comprised family health insurance (EUR 3,668), liability insurance (EUR 12,112) and children’s education (EUR 77,175). Mr Jelínek’s total remuneration includes a face value of 19,870 stock options vested on 17 March 2013, 73,963 stock options vested on 24 June 2012 and 29,437 stock options vested on 17 March 2012 in line with his option plan described in footnote 4 below the policy table.
(4) The face value of share awards vested is calculated by multiplying the number of shares or options vested less the exercise price by the closing price on the LSE at the date of vesting and converted into EUR at an average exchange rate of 0.85 for 2013. Where the face value is negative, the total figure shows the actual remuneration. The closing price on the LSE on 3 September 2013 was GBP 0.77 and on 18 March 2013 it was GBP 2.45. The LSE was closed on 17 March 2013, which was the vesting date for Mr Jelínek’s stock options and the closing price is provided for the closest LSE trading day, i.e. 18 March 2013.

Scheme Interests Awarded in 2013 and Held by Directors

large table

Type of interest and basis of award Date of grant Performance criteria  As at 1 January 2013 As at 31 December 2013 Granted during year  Vested during year Lapsed during year Exercise period (SOP) or vesting date (DBP) Exercise price Closing price on LSE on the date of grant Face value5 % of SOP or DBP receivable if minimum performance achieved
Gareth Penny1


SOP 03.09.12 N/A  750,000 666,667 83,333 - 03.09.13-03.09.24 EUR
Marek Jelínek


SOP2 09.05.08 N/A  39,776 39,776 - - 09.05.11-09.05.16 GBP
SOP2 24.06.09 N/A  221,889  221,889 - - 24.06.12-24.06.17
SOP2,3 17.03.10 N/A  88,310  88,310 19,870  9,566 17.03.13-17.03.18
DBP4 03.03.11 N/A  30,000 30,000
- - 03.03.14 N/A GBP


(1) Mr Penny was granted options under his stock option plan. Details of this plan can be found in the footnotes to the table in the ‘Remuneration of Executive Directors’ on page 94.
(2) All options under the SOP were granted for no consideration. The grants of options were not subject to performance conditions (as opposed to their vesting, where the budgeted EBITDA thresholds and targets were used). Due to discontinuation of the SOP at the end of 2010, no options were granted from 2011 onwards.
(3) One third of Mr Jelínek’s stock options granted in 2010 vested at 67.50 per cent since the actual performance was between the relevant EBITDA threshold and target performance condition set for 2012.
(4) All DBP awards shown in this table were granted under the DPB rules as they applied on the date of such award. In the absence of a transitional arrangement for equity incentives to Executive Directors who participated in the DBP on that date, for their performance in financial year 2010 the board of NWR NV resolved, on 3 March 2011, on an ad hoc grant of 30,000 deferred NWR NV A shares to Mr Jelínek. There are no performance conditions attaching to this award. The deferred shares, which have been rolled over to A shares of NWR Plc, will vest three years after grant, provided that Mr Jelínek is employed by the Group on the vesting date.
(5) The face value is calculated by multiplying the number of shares by the closing share price on the LSE less the exercise price at the date of grant. The difference between the closing price and the exercise price of the stock options under the SOP was caused by the calculation of the exercise price, which was equal to the average opening value of an A share of NWR Plc on the LSE on the five business days preceding the date of grant.

Single Total Figures For Non-Executive Directors’ Remuneration

Name Annual fee1,2
annual fee
annual fee
Hans-Jörg Rudloff3 70,959 0 53,182 124,141
Steven Schuit4
70,959 0 88,636
Barry Rourke5
70,959 82,785
Paul Everard6 70,959 59,132 29,361


(1) As of 1 May 2013, the basic annual fee and the fees for committee chairmanship and membership have been reduced by 10 per cent as part of the personnel cash-saving measures. Effective from 1 January 2014, the Board resolved to decrease the fees for the chairmanship and the membership of the Real Estate Committee. The fees are paid pro rata parte in cash upon the end of each quarter.
(2) The fees include the remuneration received for directorships and committee memberships in both NWR and NWR Plc.
(3) Mr Rudloff is a member of the Audit and Risk Management Committee and the Remuneration Committee of NWR Plc.
(4) Mr Schuit is a member of the Audit and Risk Management Committee and the Safety, Health and Sustainability Committee of NWR Plc and the Real Estate Committee of NWR and NWR Plc.
(5) Mr Rourke is a member of the Audit and Risk Management Committee and the chairman of the Nomination Committee of NWR Plc. He is also the chairman of the Real Estate Committee of NWR and NWR Plc.
(6) Mr Everard is the chairman of the Safety, Health and Sustainability Committee of NWR Plc and a member of the Real Estate Committee of NWR and NWR Plc.

Directors’ Shareholding and Share Interests

The table below sets out information pertaining to the shares held by the Directors in NWR Plc and their connected persons. There have been no changes in the interests of each Director in the NWR Plc’s shares between 31 December 2013 and the date of this report. The Company does not require the Directors to own shares in the Company.

Name At 1 January 2013 At 31 December 2013
Gareth Penny 750,000 unvested options which are not subject to performance conditions 750,000 options which are not subject to performance conditions, out of which 83,333 options are vested but unexercised
Marek Jelínek 7,075 shares, 349,975 options under the SOP, out of which 320,539 options are vested but unexercised, and 30,000 deferred shares under the DBP, which are not subject to performance conditions 7,075 shares, 340,409 options under the SOP, which are vested but unexercised, and 30,000 deferred shares under the DBP, which are not subject to performance conditions
Hans-Jörg Rudloff   26,589 shares  26,589 shares
Steven Schuit  25,843 shares  25,843 shares
Barry Rourke   55,843 shares  55,843 shares
Paul Everard  67,843 shares  67,843 shares

Payments to Former Directors

No payments of money or any other assets were made during 2013 to any former Director of the Company.

Payments for Loss of Office

Except as described above, there have been no payments in relation to loss of office during 2013.

Directors’ Remuneration in 2014

The remuneration policy for Directors for 2014 is unchanged to any significant degree from that in force in recent years and the Company intends to follow it in 2015 as well. Some elements of pay for Executive Directors are subject to the achievement of performance conditions. At its January 2014 meeting, the Remuneration Committee considered the budgeted EBITDA target for 2014, which will have to be met for the bonuses to be payable to the Executive Directors under the LTIP. It further considered the Balanced Scorecard for 2014, where the performance criteria for each level are strongly linked to the Group’s budget and strategy. The principles of the Balanced Scorecard are fully explained in the ‘remuneration policy’ table on page 94. In the opinion of the Board, the targets set for the performance criteria will be commercially sensitive. As permitted by the regulations, they are not being disclosed in advance and there will be full retrospective disclosure in the 2014 Annual Report and Accounts, if any bonuses have been paid in relation to 2014. The Remuneration Committee also discussed a possible remuneration of the input required to deliver the ongoing capital review of the NWR Group. This will be properly considered during the year and the incentive plan, if any, will be subject to the limits
included in the remuneration policy. Other than that, no material salary increases are expected across the NWR Group for 2014. 

This Remuneration Report was approved by the Board on 18 March 2014.