103 Vodafone Group Plc Annual Report 2026
Strategic report
Governance
Financials
Other information
Remuneration Policy
Remuneration Policy – notes to reader In this forward-looking section we describe our Directors’ Remuneration Policy (‘Policy’). We have set out the factors considered when determining the Policy (this page), a description of the elements of the reward package (pages 104 and 105), including an indication of the potential future value of this package for the Executive Directors (page 106), and the Policy applied to the Chair and Non-Executive Directors (page 108). We will be seeking shareholder approval for our Policy at the 2026 Annual General Meeting (‘AGM’) and we intend to implement it at that point. A summary and explanation of the proposed changes to the current Remuneration Policy is provided on page 101. Our proposed Policy has been outlined below and builds on the current Policy approved by shareholders in 2023 with a number of key changes proposed regarding the structure and operation of our Long-Term Incentive plan, aligned to the rules of our Global Incentive Plan. The Committee considered a wide range of factors and undertook extensive engagement with stakeholders as part of their review of the Policy. A summary of the opportunities identified by the Committee, the proposed Policy changes, and the engagement with investors can be found in the Remuneration Committee’s Chair Letter on page 100 of this year’s Directors’ Remuneration Report. Remuneration Policy Factors considered when determining Remuneration Policy The Remuneration Committee reviewed multiple factors when considering the Directors’ Remuneration Policy, including the extent to which the current policy supports our objectives, aligns with the experiences of key stakeholders, and considers wider employee pay structures elsewhere in the Company.
Policy objectives Our policy aims to achieve the following objectives: – Incentivise the delivery of our strategy and mission by linking reward outcomes to short- and long-term performance. – Generate sustainable returns for shareholders by managing risks to prevent excessive reward. – Attract and retain critical talent , offering competitive reward packages in the global talent markets we operate in. – Operate pay structures that are simple , have a clear purpose, and are transparent. Experience of wider stakeholders A variety of stakeholder views are taken into account when determining executive pay, including those of our shareholders, customers, employees, external bodies, and wider society. Further details of how we engage with, and consider the views of, each of these stakeholders are set out on page 115 of the 2026 Directors’ Remuneration Report. The Remuneration Committee chair’s letter sets out on page 101 the consultation process that the Company has undertaken with its shareholders in formulating the Policy. Listening to and consulting with our employees forms part of our Company’s culture and engagement can take different forms in each market to most effectively surface views. This includes our annual ‘Spirit Beat’ survey, which attracts very high levels of participation from employees and includes a question on fair pay, FAQ sessions with business leaders conducted online and face-to-face, use of digital communication channels to connect to all our people, and our regional employee forums in Europe and Africa, attended by our workforce engagement leads. Read more on how we engage our workforce on page 38.
Whilst we do not formally consult directly with employees on the Directors’ Remuneration Policy, the Remuneration Committee is briefed on pay and employment conditions across our wider footprint. The Company operates Sharesave, a UK employee share plan, as well as other discretionary share- based incentive arrangements, which means that the wider workforce have the opportunity to become shareholders in the Company and are able to vote on the Remuneration Policy in the same way as other shareholders. Employee arrangements elsewhere in the Company While our remuneration policy follows the same fundamental principles across the Group, for example including an opportunity to share in our success through global eligibility of our annual bonus and commission plans, packages offered to employees reflect differences in market practice in the different countries, role and seniority. The remuneration structure for our Executive Committee is essentially the same as for the Executive Directors with some minor differences, for example smaller award levels of shares as well as local benefit variances. The remuneration for the next level of management, our Vodafone Leadership Team (‘VLT’), again follows the same principles with company performance assessed in their annual bonus and LTI awards. They receive conditional share awards, these are partly delivered in shares without performance conditions and partly delivered in shares with performance conditions. The relative weight of performance shares increases as they progress into more senior roles. R ead more on our approach to remuneration for other employees on page 115.
Performance measures and targets Our Company’s strategy and business objectives are the primary consideration when we are selecting performance measures for our GSTIP and GLTI plans (pages 104 and 105). The targets within our incentive plans relate to internal financial measures (such as revenue, profit and cash flow) which are typically determined based on our budgets. Targets for strategic measures (such as customer and ESG measures) are set based on the Company’s objectives and mission. The threshold and maximum levels of performance are set to reflect minimum acceptable levels at threshold and very stretching levels at maximum. As in previous remuneration reports, we will disclose the details of our performance metrics for our short- and long-term incentive plans. However, our annual bonus targets are commercially sensitive and therefore we will only disclose our targets in the remuneration report following the completion of the financial year. At the end of each performance period we review performance against the targets, using judgement to account for items such as (but not limited to) mergers, acquisitions, disposals, foreign exchange rate movements, changes in accounting treatment, and/or material one-off tax settlements etc. The application of judgement is important to ensure that the final assessments of performance are fair and appropriate.
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