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## Share Option Scheme Metrics 

<img src='content_image/233907.jpg'>

* The EPS figure used for the purposes of the 2010 Scheme is the basic consolidated earnings per share of the Company for the accounting period concerned as shown in the Annual Report issued by the Company for that accounting period. 

2010 Share Option Scheme At the 2010 Annual General Meeting, shareholders approved the introduction of the current Earnings Per Share (EPS) based share option scheme (the 2010 Scheme) with 97.5% of the votes cast in favour of the 2010 Scheme. The structure of the 2010 Scheme is set out below: 

– Options are granted at the market price of the Company’s shares at the time of grant; 

– To ensure transparency, grants are made after the final results announcement; 

– The 2010 Scheme is based on one tier of options with a single vesting test; 

– The vesting period is 3 years; vesting only occurs once an initial EPS performance target has been reached and, thereafter, is dependant on performance; 

– Awards are currently limited to 150% of salary. 

The Scheme has approximately 750 active participants, c. 50% of whom are US employees. 

The performance criteria for the 2010 Scheme were agreed with the Irish Association of Investment Managers (the IAIM), which also approved the Scheme, and are set out in the table above. The performance targets are designed to provide for proportionately more vesting for higher levels of EPS growth. Details of awards to Directors under the 2010 Scheme are provided on pages 65 and 66. In 2012, awards made to Directors ranged between 132% and 138% of basic salary. Award levels for 2013 are expected to be broadly similar. 

Vesting levels are subject to any reduction which the Remuneration Committee  deems appropriate in the context of the overall results of the Group. 

The initial grant of options under the 2010 Scheme made in 2010 will not meet the EPS performance criteria set out above and, accordingly, the options will lapse on the third anniversary of the date of grant. 

As advised to shareholders in the 2011 Report on Directors’ Remuneration, in order to address the erosion in the incentive element of the 2010 Scheme, the Remuneration Committee  reviewed the EPS performance criteria applied for the 2010 and 2011 option grants in the light of the economic circumstances and trading backdrop at that time. Following that review, and with the approval of the IAIM, the performance targets for the option award made in April 2012 were adjusted. In February 2012, the Chairman of the Remuneration Committee  wrote to major shareholders regarding the proposed change, the rationale therefore and the consultation process with the IAIM. 

The adjusted performance targets (set out in the table above), which are considered by the Remuneration Committee  to remain very challenging, will be applied for the option grant in April 2013. 

The Remuneration Committee  has discretionary powers regarding the implementation of the rules of the 2010 Scheme. These powers have not been exercised since the adoption of the Scheme. 

## (v) Pensions 

Maeve Carton, Myles Lee and Albert Manifold are participants in a contributory defined benefit plan which is based on an accrual rate of 1/60 $^{th}$ of pensionable salary $^{1}$ for each year of pensionable service and is designed to provide two-thirds of career average salary $^{2}$ at retirement for full service. There is provision for Ms. Carton, Mr. Lee and Mr. Manifold to retire at 60 years of age. 

The Finance Act 2006 established a cap on pension provision by introducing a penalty tax charge on pension assets in excess of the higher of €5 million (in the Finance Act 2011, this threshold was reduced to €2.3 million) or the value of individual accrued pension entitlements as at 7 December 2005. As a result of these legislative changes, the Remuneration Committee decided that Ms. Carton, Mr. Lee and Mr. 

1 Pensionable salary is defined as basic annual salary and excludes any fluctuating emoluments. 

2 With effect from 1 January 2012. 

Manifold should have the option of continuing to accrue pension benefits as previously, or of choosing an alternative arrangement – by accepting pension benefits limited by the cap – with a similar overall cost to Group. They have chosen to opt for the alternative arrangement which involves capping their pensions in line with the provisions of the Finance Act 2006 and receiving a supplementary taxable non- pensionable cash allowance in lieu of pension benefits foregone. These allowances are similar in value to the reduction in the Company’s liability represented by the pension benefits foregone. They are calculated based on actuarial advice as the equivalent of the reduction in the Company’s liability to each individual and spread over the term to retirement as annual compensation allowances. The allowances for 2012 are detailed in note (iii) on page 63. 

Mr. Towe participates in a defined contribution retirement plan in respect of basic salary; and in addition participates in an unfunded defined contribution Supplemental Executive Retirement Plan (SERP) also in respect of basic salary, to which contributions are made at an agreed rate, offset by contributions made to the other retirement plan. 

## Directors’ Remuneration and Interests in Share Capital 

The total remuneration for individual executive Directors in the year ended 2012, including basic salary and benefits, annual bonus, vested Share Plan awards and pension payments is summarised in the centre table opposite. 

Details of Directors’ remuneration charged against profit in the year are given in the table on page 62. Details of individual remuneration for all Directors for the year ended 31 December 2012, including explanatory notes, are given on page 63. Directors’ share options and performance shares are shown on pages 65 and 66. 

Directors’ shareholdings are shown on page 67. 

