30 March 2021
Serco Group plc (the 'Company')
Legal Entity Identifier: 549300PT2CIHYN5GWJ21
LONG-TERM INCENTIVE PLAN (LTIP) - PERFORMANCE TARGETS FOR THE 2021 AWARDS TO EXECUTIVE DIRECTORS
Following the publication of our Annual Results for 2020, the Remuneration Committee has now considered the appropriate financial targets for the 2021 LTIP plan performance targets for Executive Directors. These are set out below, along with the non-financial targets already set out in the Annual Report.
The 2021 LTIP awards will have a normal vesting date of 6 April 2024 and vesting is conditional on continued employment and the satisfaction of five independent performance measures as follows:
| Performance Measure | Weighting
| Performance Target |
| Aggregate EPS | 25% | Statutory Earnings Per Share (EPS) before exceptional items (adjusted to reflect tax paid on a cash basis) of 25.17p (threshold, 25% vesting) to 27.96p (target, 50% vesting) to 30.76p (maximum, 100% vesting), measured as an aggregate over the three-year performance period ending 31 December 2023. |
| Relative TSR | 25% | Total Shareholder Return (TSR) of median (threshold, 25% vesting) to upper quartile (maximum, 100% vesting) when ranked relative to companies in the FTSE250 (excluding investment trusts), measured over the three-year performance period ending 31 December 2023. |
| Average ROIC | 25% | Pre-tax Return on Invested Capital (ROIC) of 16.5% (threshold, 25% vesting) to 18.3% (target, 50% vesting) to 20.2% (maximum, 100% vesting), measured as an average over the three-year performance period ending 31 December 2023. |
| Order Book | 10% | Book-to-bill ratio of 100% (target, 50% vesting) to 105% (maximum, 100% vesting) measured on a cumulative basis over the three-year performance period ending 31 December 2023. |
| ESG Scorecard | 15% | Employee engagement: · Average annual Group employee engagement score over the three-year performance period at or above 69 for on target performance, and at or above 71 for maximum performance.
Improvement in colleague diversity across gender (focusing on leaders) and ethnicity: · Gender diversity amongst our leaders to be measured as the percentage of women holding senior global leadership roles in 2023; target performance of 33%, and maximum performance at 35% or above. · Demonstrate significant progress on our approach and strategy for addressing ethnic diversity challenges throughout our organisation, and particularly in management and senior leadership roles. Commit to diversity charters where appropriate, such as the UK Race at Work charter, and show progress against the commitments made.
Improvement in our understanding, management and disclosure of Serco's environmental risks: · Demonstrate significant improvements in environmental performance and management of environmental risks, through actions taken in line with our environmental strategy and improvements in externally issued environment/climate change ratings. |
For Executive Directors, any shares that vest will be subject to a post-vesting holding requirement that takes the total term of the award to a minimum of five years. Pre-vesting malus and post-vesting clawback also applies to the Executive Directors' awards.
Further details regarding the remuneration arrangements for the Executive Directors, including additional details on the 2021 LTIP award, will be contained in the Directors' Remuneration Report for the year ending 31 December 2021.
For further information please contact:
Paul Checketts, Head of Investor Relations, tel: +44 (0) 7718 195 074 or email: paul.checketts@serco.com
Marcus De Ville, Head of Media Relations, tel: +44 (0) 7738 898 550 or email: marcus.deville@serco.com
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