BAE Systems has frozen the annual pay of its senior managers.
The organisation revealed in its Annual report 2012 that its chief executive, group finance director, president and chief executive officer of BAE Systems, Inc and other executives will have their salaries kept at 2012 levels.
The report also disclosed that:
- Chief executive Ian King received a base salary of £963,050 and a £1.203 million performance share plan award in 2012.
- Group finance director Peter Lynas received a base salary of £546,000 and a £682,000 perfomance share plan award in 2012.
- President and chief executive officer of BAE Systems, Inc Linda Hudson received a base salary of $1.045 (£690,589) million and a $1.515 (£1) million performance share plan award in 2012.
- Executive directors will be required to defer at least one-third of their net 2013 annual incentives into shares when the annual incentive is paid in 2014.
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The organisation has also attempted to simplify its long-term incentive plan in 2013 by replacing its share matching plan (SMP) with an increase in its performance share plan (PSP). This is intended to to result in a better balance between earning per share (EPS) and total shareholder return (TSR).
Its remuneration committee has also proposed the following changes to its remuneration framework for 2013:
- Elimination of the SMP, while redistributing the associated value into the organisation’s PSP plan.
- The implementation of a simple bonus deferral and claw-back mechanism.
- Increase the minimum shareholding requirements of the employer’s chief executive from 200% to 300% of salary.
Carl Symon, chairman of BAE System’s remuneration committee, said: “The remuneration strategy incentivises executives to deliver their contribution and rewards them for the achievement of BAE’s strategy through a combination of short-term incentives targeted at group performance, business performance, personal performance and leadership behaviours.”