The report shows that Menezes took home a basic salary of $933m for the year ending June 30 2014 – coupled with £456,000 in benefits and a pension of £411,000, this means he pocketed a cool £1.8m for the year.
Fellow executive director CFO Deirdre Mahlan took home a basic salary of £706,000, £40,000 in benefits and a £258,000 pension pot – £1.004m in total. Walsh stepped down from the board in September 2013, but still drew a salary of £278,000 in 2014, plus benefits of £15,000.
CEO has basic salary frozen for 2015
Diageo said its remuneration committee, chaired by non-executive director Mervyn Davies, reviewed senior management pay to determine new salaries applicable from October 1 2014, but decided against upping its CEO’s pay.
“After careful consideration of Ivan Menezes total remuneration positioning and the salary budget for all employees in the United Kingdom, the committee decided that no salary increase would be awarded to the chief executive in October 2014,” the report states; Mahlan will be handed a ‘modest’ 2.5% increase.
The committee also assessed the performance of Menezes, Mahlan and Walsh against their specific objectives under an annual incentive plan (AIP) and concluded that objectives were only partially met.
Executive directors ‘partially met’ 2014 targets
The trio missed internal AIP targets for the year ending June 30 2014 based upon net sales growth (6% target), profit before exceptional items and tax (11.7% target), free cash flow (£1.84bn target) and average working capital as a percentage of net sales (4.7% target).
‘Individual business obectives’ relating to medium-term strategic goals, delivery of M&A integration performance and compliance were ‘partially met’. This, coupled with 8.3% profit versus the 11.7% target above meant that Menezes, Mahlan and Walsh together were paid only 8.9% of their potential bonus kitty.
However, this still equated to an AIP award to Menezes and Mahlan of 18.2% of their base salaries, while Walsh got 17.2%.
Click here for the lowdown on Diageo's fiscal year 2014 performance, which saw foreign exchange movements and Chinese anti-extravagance measures hit its top line.