Audit Committee Overview
BAE SYSTEMS
Overview of 2020 remuneration policy
Performance
shares
Annual
incentive
Base salary
UK Executive Directors
Performance shares
Vests in year 5 subject to
three-year EPS, TSR, cash
generation and strategic
progress metrics and two-
year holding period
Compulsory bonus
deferral into DBP
One-third deferred in
shares for 3 yrs
Cash based element
Two-third paid in cash
immediately
Performance
shares
Restricted
shares
Annual
incentive
US Executive Directors
Performance shares
Vests in years 3,4 and 5
subject to three-year EPS,
TSR, cash generation and
strategic progress
metrics; vested shares
released in one-thirds
Restricted shares
Vests subject to three year
service condition with
additional two-year
clawback period
deferral into DBP
One-third deferred in
shares for 3 yrs
Cash based element
Two-thirds paid in cash
immediately
Base salary
Year 0
Year 1
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 2
Year 3
Year 4
Year 5
•
•
•
Annual incentive subject to one-third compulsory deferral.
LTI delivered entirely in Performance Shares.
Performance shares vest subject to 3 year performance
conditions (25% on each of EPS growth, relative TSR, cash
generation and strategic objectives). Further 2 year holding
period before release.
Application of reasonable discretion on vesting outcomes.
MSR of 300% for CEO; 200% for GFD to be achieved within 5
years.
Post-cessation shareholding requirement of 100% MSR for 2
years.
.
•
•
•
•
Annual incentive subject to one-third compulsory deferral.
LTI delivered in Performance Shares (298% of salary) and
Restricted Shares (150% of salary).
Performance shares vest subject to 3 year performance
conditions (25% on each of EPS growth, relative TSR, cash
generation and strategic objectives). Vested shares
released in three equal tranches at end of years 3,4 and 5.
Restricted shares vests end of year 3 + additional 2 year
clawback period.
Application of reasonable discretion on vesting outcomes.
MSR of 425% to be achieved within 5 years.
Post-cessation shareholding requirement of 300% salary
for 1 year.
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