94 Vodafone Group Plc Annual Report 2025
Strategic report
Governance
Financials
Other information
Remuneration Committee Letter from the Remuneration Committee Chair
On behalf of the Board, I present our 2025 Directors’ Remuneration Report. This report includes both our 2025 Annual Report on Remuneration and our Policy Report (as approved by shareholders at the 2023 AGM), which sets out how our policy was implemented during the year under review and how it will be applied for the year ahead. Alignment with our strategy This year we took the final steps in reshaping the Group for growth; a goal we set ourselves two years ago. We have sold our commercial businesses in Vodafone Spain and Vodafone Italy, completed the UK merger with Hutchison (the UK operation known as Three UK), and reshaped our continuing operations and investment portfolio for growth. Our incentive outcomes for the 2025 annual bonus and 2022 global long-term incentive awards reflect our financial and strategic achievements across our markets and divisions. In regards to our annual bonus, we achieved at or above target performance in respect of our financial measures. In Africa and Türkiye we reported strong growth, with the UK and Other Europe also performing well. As expected, this was a more challenging year in Germany largely due to law changes leading to the end of bulk TV contracting. Across our strategic measures for both incentive plans, we have seen positive performance. Specifically in our bonus, we improved customer satisfaction in our European markets, driven by investments in the customer and frontline experience. We subsequently delivered strong net promoter scores across our European and African markets, sustained broadly stable churn levels, and reduced the number of deep detractors. This
Fair pay We have six fair pay principles that we assess ourselves against annually through a global review. This year we took the next steps to build on this foundation by designing our pay transparency strategy, increasing the openness with employees on their pay, represented by our open and transparent fair pay principle. This will help us prepare for the incoming EU Pay Transparency Directive, which will impact a number of colleagues based in EU member states. Performance outcomes during 2025 GSTIP performance (1 April 2024 – 31 March 2025) Annual bonus performance during the year was determined against both financial and strategic measures aligned to our strategic priorities of Customers and Growth. The four measures underpinning Growth, equivalent to 70% of the award, include service revenue (20%), adjusted EBIT (20%), adjusted FCF (20%), and revenue market share (‘RMS’) (10%). The measures under the Customers element of the award, equivalent to 30% of the award, include NPS (20%) and churn (10%). Performance under the financial and strategic measures was slightly above the mid-point of the target range. The combined performance resulted in an overall bonus payout of 58.6% of maximum. Read more on page 97
led to an above-target performance of our customer measures for our annual bonus. In our long-term incentive strategic goals we exceeded the ambition of each metric. Alignment with our culture and people strategy Strong and talented leadership is critical to Vodafone as we continue to deliver our transformation. Competitive pay is crucial to attracting such talent, with this mind we reviewed the remuneration of our Executive Directors against our peers in the FTSE 30. Based on this review, it was agreed to deliver a 3.5% increase to the Group Chief Executive’s base salary. R ead more about the 2026 base salary arrangements on page 95 of this Annual Report When reviewing the base salary of our Executive Directors, we continue to align the level of increase to the wider workforce in the UK. More broadly, we also continue to engage with colleagues on pay through a variety of different channels, and it is recognised that this is even more critical during this period of change. Our workforce engagement leads attend employee forums in Europe and Africa to understand employee views on a range of topics, and this year this included our strategy, M&A activity, and people opportunities. Employee delegates at these forums continue to state how much they appreciate the opportunity to directly share views with Board members. R ead more about our culture and people strategy on page 14 of this Annual Report
GLTI performance (1 April 2022 – 31 March 2025) The 2023 GLTI award (granted July 2022) was subject to adjusted FCF (60% of total award), relative TSR (30% of total award), and ESG (10% of total award) performance. All performance conditions were measured over the three-year period ending 31 March 2025. Adjusted FCF performance finished at the mid-point of the range, resulting in 54.2% of this element vesting. Relative TSR performance was below the median of the peer group resulting in no vesting under this measure. ESG performance was assessed against three metrics and vested at 100.0%. This resulted in an overall vesting percentage for the 2022 GLTI of 42.5% of maximum. Read more on pages 98 Consideration of discretion The Committee reviewed the appropriateness of the outcomes of both the annual bonus and long-term incentive plan in light of both the relevant performance targets and wider internal and external considerations, including the wider stakeholder experience, across the respective measurement periods. The Committee also acknowledged that no windfall gains had occurred under the long-term incentive plan. It was agreed that the outcomes were appropriate and that no adjustments were required.
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