Annual report and financial statements 2008

Remuneration report

Part 1: Unaudited information

What are the current service contracts and terms of employment?

Chairman

Lord Burns was appointed Chairman on 11 July 2006, and will retire from the Board on 31 May 2008. His service agreement requires 12 months’ notice from the Company. The agreement contains a phased payment clause in line with executive directors’ contracts.

Deputy Chairman

Sir David Michels is appointed Deputy Chairman with effect from 1 June 2008, and will continue in his role as Senior Independent Director. On appointment to his new role, Sir David will have an agreement for service which requires six months’ notice by either party (currently three months).

Non-executive directors

The non-executive directors have agreements with the Company for an initial three-year term, which are terminable on three months’ notice by either party. Jack Keenan retired from the Board on 10 July 2007. Martha Lane Fox joined the Board on 1 June 2007.

Executive directors

Sir Stuart Rose is appointed Executive Chairman with effect from 1 June 2008.

All senior managers, including executive directors, have service contracts. These contracts can be terminated by the Company giving 12 months’ notice and by the employee giving six months’ notice. Sir Stuart Rose will remain on the same contract terms when he is appointed Executive Chairman.

The Company retains the right to terminate the contract of any executive director summarily, in accordance with the terms of their service agreement, on payment of a sum equivalent to the contractual notice entitlement of 12 months’ salary and specified benefits. In the case of all current executive directors, the Company reserves the right on termination to make phased payments which are paid in monthly instalments and subject to mitigation. Entitlement to participate in share schemes ceases on termination.

Contract terms and current annual salaries/fees for all members of the Board

Name Date of appointment Notice period/
unexpired term		 Basic
salary/fee1
£000		 Committee
member fee
£000		 Committee chair/
SID fee
£000		 Current annual salary/fee
£000
Chairman            
Lord Burns 01/10/05 12 mths/6 mths 450 – – 450
Chief Executive            
Sir Stuart Rose 31/05/04 12 mths/6 mths 1,130 – – 1,130
Executive directors            
Kate Bostock 10/03/08 12 mths/6 mths 500 – – 500
Ian Dyson 27/06/05 12 mths/6 mths 675 – – 675
Steven Esom 10/03/08 12 mths/6 mths 535 – – 535
Steven Sharp 08/11/05 12 mths/6 mths 565 – – 565
Non-executive directors            
Jeremy Darroch 01/02/06 3 mths/3 mths 55 6 12 73
Martha Lane Fox 01/06/07 3 mths/3 mths 55 12 – 67
Steven Holliday 15/07/04 3 mths/3 mths 55 12 – 67
Sir David Michels2 01/03/06 3 mths/3 mths 55 12 12 79
Louise Patten 01/02/06 3 mths/3 mths 55 6 12 73

1 From 1 January 2008 for Sir Stuart Rose and Steven Sharp and 10 March 2008 for Kate Bostock, Ian Dyson and Steven Esom.
2 Sir David Michel’s basic fee will increase to £245,000 per annum on 1 June 2008 on his appointment to Deputy Chairman. This fee is inclusive of all committee memberships and his continuing role as Senior Independent Director. In addition, the notice period for his agreement will increase to six months for both parties.

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