Report of The Board in relation to remuneration policy and practice
10.3.7 Interest in shares under Trusts
Certain Executive Directors, together with certain other colleagues, are deemed to have or have had an interest or a potential interest as potential discretionary beneficiaries under:
- the Group’s Employee Share Ownership Trusts. As such, they were each treated as at 31 December 2007 as being interested in the 9,701,897 ordinary shares (31 December 2006 – 5,405,010 ordinary shares) held by the trustees of these Trusts. The shares held in the Trusts will be used to satisfy share awards under short term and long term incentive plans. The relevant Executive Directors’ specific individual interests are shown in Tables 5a, 5b, 6a and 6b;
- the Group’s Qualifying Employee Share Ownership Trust. As such, they were each treated as at 31 December 2007 as being interested in the 88,301 ordinary shares (31 December 2006 – 1,697,350 ordinary shares) held by the trustee of this Trust. The shares held in the Trust will be used to satisfy entitlements of colleagues arising on the exercise of options under the Sharesave Plan. The relevant Executive Directors’ specific individual interests are shown in Table 8; and
- the Group’s Share Incentive Plan Trust. As such, they were each treated as at 31 December 2007 as being interested in the 20,087,238 ordinary shares (31 December 2006 – 12,964,303) held by the trustees of this Trust. The shares held in the Trust will be used to satisfy share awards under the Free Share and Sharebuy Plans. The relevant Executive Directors’ specific individual interests in Free Shares are shown in Table 9 and in respect of Sharebuy are included in Table 4.
In cases where the beneficiaries of the Group’s Employee Share Ownership Trusts do not have the right to direct the trustees how to vote on shares held in the Trusts, the trustees may vote in a way they see fit.
All of the Group’s share plans empower new issue shares to be allotted to satisfy share requirements. The Group’s past practice has generally been to purchase shares in the market in relation to the plans described in Sections 10.3.2 and 10.3.3 and to issue new shares in relation to the plans described in Sections 10.3.4, 10.3.5 and 10.3.6 and the Group’s all-employee share option plan. This practice was reviewed in 2007, and as a consequence, purchased shares were also used to satisfy awards in relation to the plan described in Section 10.3.5, under the Sharebuy plan and the Group’s all-employee share option plan. The method by which share plan requirements are satisfied will again be reviewed in 2008 and any changes to the 2007 practice will be set out in next year’s report.