Remuneration in detail

Table 57

What options over ordinary shares do Directors have? (audited)

Granted during year					Exercised during year
	Note	No of options at 01/04/07	No	Grant price (pence)	No	Exercise price (pence)	Market price on exercise (pence)	No of options at 31/03/08	Exercise price (pence)	Exercisable dates
F W Salway	(2)	43,065	–	–	–	–	–	43,065	1,159	07/2007-07/2014
I D Ellis	(2)	34,375	–	–	–	–	–	34,375	788	07/2006-07/2013
	(2)	41,759	–	–	–	–	–	41,759	1,159	07/2007-07/2014
	(3)	2,546	657	1,460	2,546	650	1,690	657	1,460	10/2010-04/2011
M R Hussey	(2)	23,727	–	–	–	–	–	23,727	1,159	07/2007-07/2014
	(3)	1,726	–	–	–	–	–	1,726	957	10/2009-04/2010
R J Akers	(1)	10,500	–	–	–	–	–	10,500	869	07/2004-07/2011
	(2)	7,750	–	–	–	–	–	7,750	788	07/2006-07/2013
	(2)	11,500	–	–	–	–	–	11,500	1,159	07/2007-07/2014
	(3)	1,392	–	–	–	–	–	747	957	10/2009-04/2010
			–	–	–	–	–	645	1,523	09/2011-03/2012
M F Greenslade	(3)	1,075	–	–	–	–	–	1,075	1,523	09/2011-03/2012

Notes:

1. 2000 Executive Share Option Scheme. Vesting of awards is dependent on the Company’s growth in normalised adjusted EPS exceeding the growth in RPI by 2.5% per year.
2. 2002 Executive Share Option Scheme. Vesting of awards is dependent on the Company’s growth in normalised adjusted EPS exceeding the growth in RPI by at least 2.5% per year.
3. 2003 Savings Related Share Option Scheme. Not subject to performance conditions because it is available to all staff and HM Revenue & Customs’ rules do not permit performance conditions to be set out for this type of scheme.
The total number of options over ordinary shares held by F W Salway, I D Ellis, M R Hussey, R J Akers and M F Greenslade at 31 March 2008 was 43,065, 76,791, 25,453, 31,142 and 1,075 respectively. The total number of options over ordinary shares held by all Directors at 31 March 2008 was 177,526.
The range of the closing middle market prices for Land Securities’ shares during the year was 1377p to 2198p. The middle market price on 31 March 2008 was 1485p.

table 58

Table 58

What interests in shares do Directors have?

	Ordinary Shares		Deferred shares		LTIP performance shares**		Matching Shares**
	2008	2007	2008	2007	2008	2007	2008	2007
F W Salway	85,310	66,948	26,016	25,076	106,363	70,257	61,262	30,302
I D Ellis	59,849	26,407	63,672	48,122	69,044	44,781	38,216	17,564
M R Hussey	34,957	21,957	28,780	23,638	67,764	43,501	42,606	18,144
D Rough	11,400	7,675	–	–	–	–	–	–
Sir Winfried Bischoff	8,750	8,750	–	–	–	–	–	–
S A Rose	10,000	10,000	–	–	–	–	–	–
B A Lerenius	18,000	12,000	–	–	–	–	–	–
A J Carnwath	68,620	6,514	–	–	–	–	–	–
R J Akers	23,058	9,322	10,989	8,773	53,159	32,362	33,918	14,914
M F Greenslade	14,045	6,345	6,546	2,199	64,497	41,389	58,793	38,067
P Myners (appointed 1.09.07)*	20,000	10,000	–	–	–	–	–	–

* At date of appointment
** Subject to performance conditions

table 59

Table 59

Defined benefit pension scheme (audited)

	Accrued benefit at 31 March 2008 £	Increase in accrued benefits excluding inflation £	Increase in accrued benefits including inflation £	Transfer value of increase in accrued benefit excluding inflation £	Transfer value of accrued benefits at 1 April 2007 £	Transfer value of accrued benefits at 31 March 2008 £	Increase in transfer value net of directors’ contributions £
R J Akers	24,918	1,879	2,754	26,723	224,387	352,679	124,940

The ‘Increase in transfer value net of Directors’ contributions’ differs from the ‘Transfer value of increase in accrued benefit’ in that it reflects changes in the transfer value assumptions and market conditions over the year less the Directors’ own contributions to the pension scheme.

The maximum number of shares which could potentially vest as a result of historic long-term incentive awards and the number of shares which vested in the financial year are shown in Table 55. The Group’s policy is to use market-purchased shares to satisfy the vesting of LTIP Performance and Matching Shares and for Deferred Share Awards. Future awards are partially hedged through on-market share purchases by an Employee benefit Trust which held 1,336, 275 shares at 31 March 2008.

Share options

Land Securities has historically operated share option arrangements for Executive Directors. Vesting of share options was subject to performance tests and was dependent on growth in NADEPS exceeding RPI by at least 2.5% per annum. Following the adoption of the LTIP in 2005/06, no further awards of share options have been made to the Executive Directors.

For grants made over the period 2000 to 2004, the Committee determined that the required level of increase in NADEPS was achieved and as a result the executive share options granted during that period are exercisable in full. Directors’ options over ordinary shares are shown in Table 57.

Chart 60

What is the vesting range for LTIP Performance and Matching Shares?

CHart 60: The vesting range for LTIP Performance and Matching Shares

Directors’ emoluments

Tables 56a and 56b and set out Directors’ emoluments for the year under review and the financial year ended 31 March 2008. The basis of disclosure is on an ‘accruals’ basis, that is the annual bonus and Deferred Bonus Shares columns include the amount that will be paid and awarded respectively for performance achieved in the financial year under review. The Performance Shares 2007/08 column includes the value of Performance Shares which will vest in July 2008 as a result of performance measured over a three year period ended 31 March 2008.

Pensions

The Company operates a contributory money purchase pension scheme which was introduced for all staff joining the Group from 1 January 1999. Prior to the introduction of the contributory money purchase arrangement the Company provided pension benefits on a defined benefit basis. Following a review of pension provision in light of the tax changes that came into effect from 1 April 2006, it was decided that Executive Directors would continue to be entitled to a pension benefit that is equivalent to 25% of their base salary. Executive Directors have the flexibility to determine how this 25% of salary benefit is used, as follows:

Pension contributions may be made into the Land Securities contributory money purchase scheme up to the personal level that is advised plus a cash contribution on the balance
25% cash payment on base salary to invest outside Land Securities pension arrangements

Richard Akers participates in a defined benefit pension scheme (Table 59) which was open to property management and administration staff until 31 December 1998. This scheme is designed to provide, at normal retirement age, a pension of 1/60th of Pensionable Salary for each year of pensionable service. The scheme also provides lump sum death-in-service benefits on death before normal retirement age of four times Pensionable Salary and pension provision for dependants of members. Only basic salary is treated as Pensionable Salary. The benefits provided to Richard Akers are based on a Pensionable Salary which is subject to the statutory earnings cap. With effect from 1 April 2006 the defined benefit pension scheme has moved to future accrual on a ‘CARE’ (Career Average Revalued Earnings) basis on either a 1/80th accrual or 1/60th accrual subject to employee contributions. Richard Akers chose to accrue benefits on a 1/60th basis with employee contributions of 1% of basic salary in 2006, 3% of basic salary in 2007 and 5% of basic salary thereafter.

The balance of Richard Akers’ pension allowance is paid to him to invest outside Land Securities pension arrangements.

As disclosed in last year’s Directors’ remuneration report, the changes made to pension provision in 2006/07 did not provide a tax advantage to Executives and the changes made were cost neutral to the Company.