Skip to main content [Access key C]Jump to the top navigation [Access key T]Jump to the local navigation [Access key L]Jump to the search [Access key S]Jump to the sitemap [Access key M]Jump to the homepage [Access key H]
Standard Life plc - Annual Report and Accounts 2007
Home The Group
at a Glance		 Business
Review		 Corporate
Responsibility		 Governance
Information		 Financial
Statements

Standard Life Investments

Standard Life Investments' remuneration policy is consistent with the practices of competing fund managers and is overseen by the Standard Life Investments Remuneration Committee, which reports to the Group Remuneration Committee on its overall remuneration policy and specifically on the remuneration for Keith Skeoch and other senior executives at Standard Life Investments. These three cash-based incentive arrangements are used within Standard Life Investments:

Personal bonus plan

This is a discretionary annual cash bonus plan that rewards personal performance and team investment performance. Keith Skeoch's personal performance bonus is capped at 105% of salary and will be assessed by the Standard Life Investments Remuneration Committee.

Company bonus plan

This annual cash bonus plan rewards participants by referring to Standard Life Investments' investment performance over the year. Under this plan, Keith Skeoch's bonus has been uncapped and has been determined by the Remuneration Committee of Standard Life Investments each year as this has been in line with the practice of other major investment management companies. From 2008, the Remuneration Committee has determined that any Company bonus awarded to the Chief Executive of Standard Life Investments will be capped at 400% of annual base salary.

Standard Life Investments long-term incentive plan

The purpose of this incentive arrangement is to give selected executives of Standard Life Investments the opportunity to share in the longer-term success of Standard Life Investments. It does this by rewarding them for contributing to the future growth in its value. Since we introduced an arm's-length fee agreement between Standard Life Investments and Standard Life Assurance, this incentive plan has been built around the actual profit growth of Standard Life Investments over a three-year performance period, compared with its expected profit growth over this period. It is a cash arrangement that does not operate over Standard Life shares. Instead, participants share in a cash bonus pool of up to 15% of Standard Life Investments' profits of the third year in the performance period. This is adjusted by a market value capital factor, which is based upon the change in the price earnings ratio of the FTSE General Financials sector over the performance period. The profit performance condition is underpinned by an investment performance target. At the end of the three-year performance period, the bonus pool is calculated based on the extent that the performance conditions have been met and by applying the market value factor. Individual allocations are then calculated by referring to the points held by each participant, compared with the total number of points that remain in allocation. Participants who leave during the three-year performance period generally lose their points. Any cash payments are then made at the first practical payroll date following determination.