Supplementary information

Payments and share releases in 2012 to past executive directors

Nick Prettejohn

The 2009 Directors’ remuneration report provided details of the remuneration arrangements that would apply to Nick Prettejohn after he resigned from the position of Chief Executive UK & Europe. These arrangements were implemented as intended by the Committee.

The performance periods of Nick Prettejohn’s GPSP and UK BUPP awards for 2009 ended on 31 December 2011. Vesting was prorated based on service (ie 9/36ths). Vesting remained dependent on performance achieved over the performance period and shares were released at the same time as for other participants in these plans.

The performance condition attached to the 2009 GPSP award was met in full and 100 per cent of the proportion of the award which was outstanding was released during 2012. Achievement against the shareholder capital value performance measure attached to the 2009 UK BUPP award was 12.5 per cent per annum (on a compound basis), so 87.5 per cent of the outstanding portion of this award was released during 2012. This award was the last that Nick Prettejohn had outstanding under a Prudential long-term incentive plan.

Clark Manning

Clark Manning stepped down from his role as President and Chief Executive of Jackson and as an executive director on 31 December 2010. Clark Manning remained Chairman of Jackson until 30 April 2011 and acted in an advisory role until 31 December 2011. The 2010 Directors’ remuneration report provided details of the remuneration arrangements that would apply to Clark Manning after his resignation. These arrangements were implemented as intended by the Committee.

During 2012, Clark Manning received the following payments:

  • Clark Manning had a prorated 2011 annual bonus opportunity (4/12ths) based on his length of service as Chairman of Jackson during 2011. On this basis, a cash payment of £725,389 was made to him in 2012;
  • The deferred portion of the bonuses awarded to Clark Manning in respect of performance in 2009 and 2010 were released to Clark Manning in July 2012;
  • The performance condition attached to the 2009 GPSP award was met in full and 100 per cent of the award was released in 2012; and
  • Achievement against the shareholder capital value performance measure attached to the 2009 JNL BUPP award was 11.5 per cent per annum (on a compound basis) so 93.75 per cent of the outstanding portion of this award was released in 2012.

The performance condition attached to the 2010 GPSP award was met in full and 100 per cent of the award will be released during 2013. Achievement of the SCV performance measure attached to the 2010 Jackson BUPP award was 22.68 per cent per annum (on a compound basis), so 100 per cent of the outstanding portion of this award will be released during 2013.

Outstanding 2010 awards made to Clark Manning under the GPSP and BUPP will vest (subject to the achievement of performance conditions) on the same schedule as awards made to other executive directors. These awards will be prorated to reflect the portion of the performance periods which had elapsed on 31 December 2011 (ie 24/36ths).

No awards were made to Clark Manning under any long-term incentive plan during 2011 or 2012 and none will be made in any subsequent year.

Payments and share releases in 2012 to newly appointed executive directors

Share awards made to Nic Nicandrou and Rob Devey in connection with their appointment were released, as scheduled, during 2012. Details of these awards were originally set out in the Directors’ remuneration report for 2009. Please see the Other share awards table for details.

No other amounts were paid during the financial year or were receivable by directors (or past directors) in connection with leaving the organisation.

Directors’ outstanding long-term incentive awards

Share-based long-term incentive awards

The section below sets out the outstanding share awards under the Group Performance Share Plan and the awards made under additional long-term plans (Business Unit Performance Plan and JNL Performance Share Plan) for the executive directors with regional responsibilities.

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Plan name Year of
award
Conditional
share awards
outstanding
at 1 January
2012
(Number of
shares)
Conditional
awards
in 2012
(Number of
shares)
Market price
at date of
award
(pence)
Dividend
equivalents
on vested
shares
(Number of
shares
released)
note (2)
Rights
exercised
in 2012
Rights
lapsed
in 2012
Conditional
share awards
outstanding
at 31 December
2012
(Number
of shares)
Date of
end of
performance
period

Notes

  1. The awards for Barry Stowe and Mike Wells were made in ADRs (1 ADR = 2 Prudential plc shares). The figures in the table are represented in terms of Prudential shares.
  2. In 2009 and 2010, a scrip dividend equivalent and in 2011 and 2012 a DRIP dividend equivalent were accumulated on these awards.
  3. On 31 December 2012, the performance period of the 2010 GPSP awards came to an end. Prudential’s TSR performance was 139.9 per cent of the TSR performance of the peer index. On this basis, it is anticipated that awards granted under this plan in 2010 will vest in full. This will result in 104,089 shares vesting for Rob Devey, 66,238 shares for Michael McLintock, 208,179 shares for Nic Nicandrou, 129,076 shares for Barry Stowe and 510,986 shares for Tidjane Thiam under this plan. Dividend equivalents will be released on these vested shares.
  4. At 31 December 2012, the performance period of the 2010 BUPP awards came to an end. Over the performance period the new business profit, IFRS profit and cash remittance achieved by the Asia business meant that it is anticipated that 95.2 per cent of the award will vest. This will result in 122,880 shares being released to Barry Stowe under this plan. Since the UK BUPP uses the same TSR performance measure as the GPSP, it is anticipated that 104,089 shares will be released to Rob Devey under this plan. No current executive director participated in the 2010 JNL BUPP. Dividend equivalents will be released on these vested shares.
  5. The table above reflects the maximum number of shares (150 per cent of the original number awarded) which may be released to Mike Wells under the JNL Performance Share Plan. This maximum number of shares may be released if stretch performance targets are achieved. On 31 December 2012, the performance period of the 2009 JNL Performance Share Plan award came to an end. On the basis of the shareholder value being achieved by the Jackson business over the performance period, it is anticipated that 150 per cent of awards will vest, resulting in 218,100 shares being released to Mike Wells under this plan in 2013.
Rob Devey                  
GPSP 2009 120,898   639 15,361 136,259   31 Dec 11
BUPP 2009 120,897   639 15,361 136,258   31 Dec 11
GPSP 2010 104,089   568.5       104,089 31 Dec 12
BUPP 2010 104,089   568.5       104,089 31 Dec 12
GPSP 2011 76,242   733.5       76,242 31 Dec 13
BUPP 2011 76,242   733.5       76,242 31 Dec 13
GPSP 2012   88,273 678       88,273 31 Dec 14
BUPP 2012   88,273 678       88,273 31 Dec 14
    602,457 176,546   30,722 272,517   537,208  
John Foley                  
GPSP 2011 152,484   733.5       152,484 31 Dec 13
GPSP 2012   199,433 678       199,433 31 Dec 14
    152,484 199,433         351,917  
Michael McLintock                  
GPSP 2009 92,022   455.5 11,691 103,713   31 Dec 11
GPSP 2010 66,238   568.5       66,238 31 Dec 12
GPSP 2011 48,517   733.5       48,517 31 Dec 13
GPSP 2012   47,079 678       47,079 31 Dec 14
    206,777 47,079   11,691 103,713   161,834  
Nic Nicandrou                  
GPSP 2009 316,328   639 40,197 356,525   31 Dec 11
GPSP 2010 208,179   568.5       208,179 31 Dec 12
GPSP 2011 152,484   733.5       152,484 31 Dec 13
GPSP 2012   185,374 678       185,374 31 Dec 14
    676,991 185,374   40,197 356,525   546,037  
Barry Stowe
note (1)
                 
GPSP 2009 196,596   455.5 22,868 219,464   31 Dec 11
BUPP 2009 196,596   455.5 19,780 189,834 26,542 31 Dec 11
GPSP 2010 129,076   568.5       129,076 31 Dec 12
BUPP 2010 129,076   568.5       129,076 31 Dec 12
GPSP 2011 88,270   733.5       88,270 31 Dec 13
BUPP 2011 88,270   733.5       88,270 31 Dec 13
GPSP 2012   95,642 678       95,642 31 Dec 14
BUPP 2012   95,642 678       95,642 31 Dec 14
    827,884 191,284   42,648 409,298 26,542 625,976  
Tidjane Thiam                  
GPSP 2009 299,074   455.5 38,004 337,078   31 Dec 11
GPSP 2010 510,986   568.5       510,986 31 Dec 12
GPSP 2011 374,279   733.5       374,279 31 Dec 13
GPSP 2012   523,103 678       523,103 31 Dec 14
    1,184,339 523,103   38,004 337,078   1,408,368  
Mike Wells
notes (1 & 5)
                 
JNL PSP 2008 84,900   546   84,900   31 Dec 11
JNL PSP 2009 218,100   455.5       218,100 31 Dec 12
JNL PSP 2010 141,000   568.5       141,000 31 Dec 13
GPSP 2011 197,648   733.5       197,648 31 Dec 13
BUPP 2011 197,648   733.5       197,648 31 Dec 13
GPSP 2012   199,256 678       199,256 31 Dec 14
BUPP 2012   199,256 678       199,256 31 Dec 14
    839,296 398,512     84,900   1,152,908  

Business-specific cash-based long-term incentive plans

Details of all outstanding awards under cash-based long-term incentive plans are set out in the table below. The performance period for all M&G Executive LTIP awards is three years while the performance period for all JNL LTIP awards is four years:

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  Year of initial
award
Face value of
conditional
share awards
outstanding at 1 January 2012
£000
Conditionally
awarded
in 2012
£000
Payments
made
in 2012
£000
Face value of
conditional
share awards
outstanding at 31 December
2012
£000
Date of end of
performance
period

Note

Under the M&G Executive LTIP, the value of each unit at award is £1. The value of units changes based on M&G’s profit growth and investment performance over the performance period. For the 2009 award of 1,830,189 units, the unit price at the end of the performance period was £2.96 which resulted in a payment of £5,417,359 to Michael McLintock during 2012. For the 2010 award of 987,179 units, the unit price at the end of the performance period was £2.65. This will result in payment of £2,616,024 to Michael McLintock in 2013.

See 2012 implementation of remuneration policy for a description of the JNL LTIP. Performance over the period from 2008 to 2011 resulted in a payment of £826,975 to Mike Wells during 2012. Performance over the period from 2009 to 2012 will result in a payment of £1,117,509 being paid to Mike Wells in 2013. The awards above were made before Mike Wells became an executive director and it is anticipated that no further awards will be made to him under this Plan.

The sterling face value of Mike Wells’ JNL LTIP awards have been calculated using the average exchange rate for the year in which the grant was made. The dollar face value of conditional share awards outstanding on 1 January 2012 and 31 December 2012 was US$4,200,000 and US$2,800,000 respectively.

Michael McLintock            
M&G Executive LTIP 2009 1,830   5,417 31 Dec 11
M&G Executive LTIP 2010 987     987 31 Dec 12
M&G Executive LTIP 2011 1,318     1,318 31 Dec 13
M&G Executive LTIP 2012   953   953 31 Dec 14
Total cash payments made in 2012       5,417    
Mike Wells            
JNL LTIP 2008 756   827 31 Dec 11
JNL LTIP 2009 894     894 31 Dec 12
JNL LTIP 2010 906     906 31 Dec 13
Total cash payments made in 2012       827    

Other share awards

The table below sets out the share awards that have been made to executive directors under their appointment terms and those deferred from annual incentive plan payments. The number of shares is calculated using the average share price over the three business days commencing on the day of the announcement of the Group’s annual financial results for the relevant year. For the awards from the 2011 annual incentives, made in 2012, the average share price was 776 pence. Please see the table in the Supplementary information for details of shares acquired under the Share Incentive Plan.

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  Year of
grant
Con-
ditional
share
awards out-
standing at
1 January
2012
(Number
of shares)
Con-
ditionally
awarded
in 2012
(Number
of shares)
Dividends
accumu-
lated
in 2012
(Number
of shares)
note (2)
Shares
released
in 2012
(Number
of shares)
Con-
ditional
share
awards out-
standing
at 31
December
2012
(Number
of shares)
Date of
end of
restricted
period
Date of
release
Market
price at
date of
award
(pence)
Market
price at
date of
vesting
or release
(pence)

Notes

  1. The Deferred Share Awards in 2010, 2011 and 2012 for Barry Stowe and Mike Wells were made in ADRs (1 ADR = 2 Prudential plc shares). The figures in the table are represented in terms of Prudential shares.
  2. In 2009 and 2010 a scrip dividend equivalent and in 2011 and 2012 a DRIP dividend equivalent were accumulated on these awards.
  3. This award attracts dividends in the form of cash rather than shares.
Rob Devey                    
Awards under appointment terms 2009 50,575     50,575 31 Mar 12 29 Mar 12 639 750
Deferred 2009 annual incentive award 2010 28,737   1,018   29,755 31 Dec 12   552.5  
Deferred 2010 annual incentive award 2011 46,694   1,655   48,349 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012   41,136 1,457   42,593 31 Dec 14   750  
    126,006 41,136 4,130 50,575 120,697        
John Foley                    
Deferred 2009 deferred PruCap award 2010 172,993   6,133 179,126 14 Dec 12 14 Dec 12 612 881
Deferred 2011 annual incentive award 2012   44,481 1,576   46,057 31 Dec 14   750  
    172,993 44,481 7,709 179,126 46,057        
Michael McLintock                    
Deferred 2008 annual incentive award 2010 137,700     137,700 31 Dec 11 15 Mar 12 519.5 780
Deferred 2009 annual incentive award 2010 74,840   2,653   77,493 31 Dec 12   552.5  
Deferred 2010 annual incentive award 2011 77,988   2,765   80,753 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012   36,008 1,276   37,284 31 Dec 14   750  
    290,528 36,008 6,694 137,700 195,530        
Nic Nicandrou                    
Awards under appointment terms 2009 68,191     68,191 31 Mar 12 29 Mar 12 639 750
Deferred 2009 annual incentive award 2010 26,342   934   27,276 31 Dec 12   552.5  
Deferred 2010 annual incentive award 2011 48,155   1,707   49,862 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012   43,518 1,542   45,060 31 Dec 14   750  
    142,688 43,518 4,183 68,191 122,198        
Barry Stowe
note (1)
                   
Deferred 2008 annual incentive award 2009 22,643     22,643 31 Dec 11 15 Mar 12 349.5 780
Deferred 2009 annual incentive award 2010 39,088   1,386   40,474 31 Dec 12   552.5  
Deferred 2010 annual incentive award 2011 56,316   1,998   58,314 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012   50,648 1,798   52,446 31 Dec 14   750  
    118,047 50,648 5,182 22,643 151,234        
Tidjane Thiam                    
Deferred 2008 annual incentive award 2010 69,924     69,924 31 Dec 11 15 Mar 12 552.5 780
Deferred 2009 annual incentive award 2010 63,240   2,242   65,482 31 Dec 12   552.5  
Deferred 2010 annual incentive award 2011 221,657   7,858   229,515 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012   101,134 3,585   104,719 31 Dec 14   750  
    354,821 101,134 13,685 69,924 399,716        
Mike Wells note (1)                    
2009 After Tax Deferral Program awardnote (3) 2010 32,250       32,250 15 Mar 13   520  
Deferred 2010 Group Deferred Bonus Plan award 2011 90,854   3,226   94,080 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012   93,034 3,302   96,336 31 Dec 14   750  
    123,104 93,034 6,528   222,666        

Shares acquired under the Share Incentive Plan

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  Year of
initial grant

Share
incentive
plan awards
held in Trust
at 1 January
2012
(Number
of shares)
Partnership
shares
accumulated
in 2012
(Number
of shares)
Matching
shares
accumulated
in 2012
(Number
of shares)
Dividend
shares
accumulated
in 2012
(Number
of shares)
Share
Incentive Plan
awards held in
Trust at
31 December
2012
(Number
of shares)

Note

The table above provides information about shares purchased under the SIP together with Matching shares (awarded on a 1:4 basis) and Dividend shares. The total number of shares will only be released if Nic Nicandrou remains in employment for five years.

Nic Nicandrou            
Shares held in Trust 2010 596 199 50 24 869

Outstanding share options

The following table sets out the share options held by the directors in the UK Savings-Related Share Option Scheme (SAYE) as at the end of the period. No other directors held shares in any other option scheme.

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        Exercise period   Number of options
  Date of
grant
Exercise
price
Market
price
at 31
Dec
2012
Beginning End   Beginning
of period
Granted Exercised Cancelled Forfeited Lapsed End of
period

Notes

  1. No gains were made by directors in 2012 on the exercise of SAYE options (2011: £665).
  2. No price was paid for the award of any option.
  3. The highest and lowest closing share prices during 2012 were 911.5 pence and 633.5 pence respectively.
John Foley 25 Apr 08 551 865.5 01 Jun 13 29 Nov 13   2,953 2,953
Tidjane Thiam 16 Sep 11 465.8666 865.5 01 Dec 14 29 May 15   965 965
Nic Nicandrou 16 Sep 11 465.8666 865.5 01 Dec 16 31 May 17   3,268 - - - 3,268
Rob Devey 16 Sep 11 465.8666 865.5 01 Dec 16 31 May 17   3,268 3,268

Dilution

Releases from Prudential’s GPSP and BUPP are satisfied using new issue shares rather than by purchasing shares in the open market. Shares relating to options granted under all-employee share plans are also satisfied by new issue shares. The combined dilution from all outstanding shares and options at 31 December 2012 was 0.1 per cent of the total share capital at the time. Deferred shares will continue to be satisfied by the purchase of shares in the open market.

Company TSR performance (unaudited information)

As required by the Companies Act, the line chart below compares Prudential’s Total Shareholder Return (TSR) during the five years from 1 January 2008 to 31 December 2012, with that of the peer group against which TSR is measured for the purposes of the Group Performance Share Plan. Our performance is also shown relative to the FTSE 100 since Prudential is a major company within this index. This chart is prepared using the methodology stipulated in the current remuneration regulations:

Line graph showing the company TSR performance. Dec 2007: Prudential 100, FTSE100 100. Dec 2008: Prudential 50, FTSE100 70, Peer group index 49. Dec 2009: Prudential 95, FTSE100 90, Peer group index 60. Dec 2010: Prudential 100, FTSE100 101, Peer group index 59. Dec 2011: Prudential 101, FTSE100 100, Peer group index 53. Dec 2012: Prudential 146.4, FTSE100 109.6, Peer group index 67.3.

Five highest paid individuals (unaudited information)

Of the five individuals with the highest emoluments in 2012, three were directors whose emoluments are disclosed in this report (2011: two; 2010: one). The aggregate of the emoluments of the other two individuals for 2012 (2011: three; 2010: four) were as follows:

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£000,000 2010 2011 2012

Notes

  1. Base salaries, allowances and benefits in kind in 2012 were less than £400,000.
  2. Pension contributions payable were less than £150,000 in each period.
Base salaries, allowances and benefits in kind(note 1) 1 1
Pension contributions(note 2)
Bonuses paid or receivable 18 23 15
Share-based payments and other cash payments 6 2 1
Total 25 26 16

Their emoluments were within the following bands:

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  2010 2011 2012
£5,000,001 – £5,100,000 1    
£5,300,001 – £5,400,000 1    
£5,700,001 – £5,800,000     1
£6,000,001 – £6,100,000 1    
£8,200,001 – £8,300,000   1  
£8,300,001 – £8,400,000 1    
£8,400,001 – £8,500,000   2  
£10,000,001 – £10,100,000     1

Signed on behalf of the Board of directors

Lord Turnbull
Chairman of the Remuneration Committee
12 March 2013

Paul Manduca
Chairman
12 March 2013

 
 

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