Report of the Remuneration Committee
 
Constitution
This report has been prepared by the Board in accordance with the requirements of the ‘Combined Code’ adopted by the London Stock Exchange. It encompasses the elements of the Company’s remuneration policy and formal disclosure relating to individual Directors’ remuneration. The committee consists of four Non-Executive Directors being Charles G Toner, Robert H Gunlack, Nicholas J A Parker and John A Bateman. The Chief Executive of the Company and the Finance Director are invited to attend as appropriate. The committee takes independent advice as deemed necessary.

Directors' Remuneration
Levels of pay and benefits have been set which reflect the performance of the Company against pre-determined budgets, as well as the individual contribution of each Director. Awards have taken into consideration both market and competitive conditions. Salaries are set at a level believed to be one at which the Company will be able to continue in order to motivate and retain its management.

There are four main elements of the remuneration package for Executive Directors and Senior Management:

  • Basic annual salary and benefits in kind.
  • Annual bonus payments based on meeting specific performance criteria.
  • Share option incentives.
  • Pension contributions, though the Company has no pension scheme of its own.
All aspects of the Executive Directors' packages are reviewed annually by the Remuneration Committee. Some Executive Directors benefit from certain taxable benefits, including the provision of a Company car. The remuneration of the Non-Executive Directors is determined by the Board. Part of that remuneration is paid in the form of shares in the Company. The Remuneration Committee consults the Chief Executive about its proposals relating to the remuneration of other Executive Directors and has access to professional advice where appropriate.

The Share Option Scheme relating to the Directors introduced at the time of the flotation in April 1996 seeks to link individual reward with the longer term success of the business. Options are awarded to Directors following an assessment of individual performance and are based on a multiple of the Director's salary for the period. It is the Company's policy that no Director or employee should hold options of more than four times salary. The right to exercise these share options is subject to the attainment of specified growth in shareholder value between the time of the grant and the exercise date.

The terms of the Executive Directors' service contracts are: -
Peter P Flaherty
Peter J Browne
Andrew M Zielinski
 12 months written notice to be given by either party.
12 months written notice to be given by either party.
12 months written notice to be given by either party.
Directors' Emoluments
Details of the Directors’ emoluments can be found at note 3 to the Financial Statements in the Notes to the Accounts (1-3) section.

Share Option Schemes
The Company operates the MSB International PLC Executive Option Scheme (‘the Executive Scheme’). It has two parts:
Part A designed for Inland Revenue approval and Part B an unapproved Share Option Scheme. Part A of the Executive Scheme was approved by the Inland Revenue under Schedule 9 of the Income and Corporation Taxes Act 1988 on 17 July 1998. The Executive Scheme was approved by shareholders at an Extraordinary General Meeting of the Company held on 16 January 1998. The Executive Scheme was then amended and approved by shareholders at an Extraordinary General Meeting of the Company held on 19 November 1999.

An analysis of options held by current Directors as at 31 January 2000 in the Executive Scheme is set out below:
Name
 
 Scheme
 
 Date
Granted

Numbering
Options
Exercise
Price
Exercise
Period

Peter P Flaherty
 
 Part A
Part B
 		15/01/99
15/01/99
 		13,483
143,820
 		222.50
222.50
 		15/01/02 - 14/01/09
15/01/02 - 14/01/09

Andrew M Zielinski
 
 Part A
Part B
 		23/10/98
23/10/98
 		10,169
91,525
 		295.00
295.00
 		23/10/01 - 22/10/08
23/10/01 - 22/10/08


Peter P Flaherty, appointed as Deputy Chairman with effect from 1 August 1998, was granted share options on 15 January 1999 to the value of two times his basic salary, following a review by the Remuneration Committee of his salary package.
Peter P Flaherty has since been appointed Chief Executive with effect from 27 March 2000.

Andrew M Zielinski, appointed as Finance Director on 1 September 1998, was granted share options equivalent to two times his basic salary upon joining the Company.

By order of the Board

Peter P Flaherty
Charles G Toner
Chairman 		 
4 April 2000