RMG00000330
RMG00000330
Royal Mail — Strictly Confidential
RC(06)08
ROYAL MAIL HOLDINGS plc
REMUNERATION COMMITTEE
ANNUAL BONUS 2005-2006
Introduction
1 This paper recommends the annual bonus payments for executive directors for
2005-2006.
Outturn
2 Appendix 1 sets out the payments calculated and Appendix 2 gives the detailed
breakdown of achievement against the individual financial and quality targets. The final
column of Appendix 2 gives the percentage of the on-target bonus from each element.
3 The targets for executive directors’ bonuses were finally confirmed by the DTI in
February 2006 after a lengthy discussion which resulted in the stretch on the financial target
being increased from 20% to 50%.
4 Appendix 1 also shows the maximum proportion of each bonus which can be
deferred into the LTIP in accordance with the rules agreed by the Remuneration Committee
— 50% up to the on-target level, and 75% of any amount above that.
5 A paper is attached at Appendix 3 which gives in detail the bonus outturn for other
senior staff, which includes a breakdown by business.
Recommendation
6 The Remuneration Committee is invited to:
e Approve in principle the bonuses set out in the attached schedule.
e Seek the comments of the Secretary of State for Trade and Industry.
Royal Mail — Strictly Confidential
1