Kirk Kinsell – remuneration arrangements on departure

After a total of nineteen¹ years of service with the Group and as part of a planned transition of responsibility, Mr Kirk Kinsell will leave the Board and his role as President, The Americas on 13 February 2015, at the age of 60.

Given Mr Kinsell’s significant contribution to the company over the period of his service, the Remuneration Committee concluded that Mr Kinsell would be treated as a Good Leaver for the purposes of the long-term incentive plan (LTIP) awards, in line with the remuneration policy on termination of employment. He will therefore retain all outstanding LTIP awards which will vest on the normal vesting dates, subject to the satisfaction of performance conditions, with the awards to be pro-rated based on the proportion of the performance period in which he remained in employment.

Mr Kinsell will also receive the cash portion of his 2014 annual performance plan (APP) award (again, subject to the satisfaction of performance conditions) and the deferred share portion of his 2011 annual performance plan (APP) on the normal vesting date. Outstanding deferred awards under the 2012 and 2013 APPs will lapse, and no APP award will be made in respect of 2015. Further details are set out below.

The Remuneration Committee has reserved the right to determine that, prior to the vesting of shares under each outstanding LTIP cycle, Mr Kinsell’s entitlement to shares under the LTIP will be forfeited in full if Mr Kinsell commits a breach of his continuing post-termination contractual obligations.

Compensation for loss of office

In line with his contractual agreement and the Remuneration Committee’s policy on termination of employment, Mr Kinsell will not be paid any salary or benefits (or compensation in lieu) in respect of the period after 13 February 2015, or receive any compensation for loss of office.

Annual Performance Plan (APP)

In accordance with the rules of the APP, as Mr Kinsell will have been in post for the whole of the 2014 performance period, he will receive the cash portion of his 2014 APP award, subject to the satisfaction of the performance conditions and based on his contribution to the achievement of performance conditions for the completed 2014 performance period. The value of this payment will be confirmed in February 2015 once the results of the performance measures have been audited and verified. For a target level of performance his cash award would be $456,263. Also in accordance with the rules of the APP, Mr Kinsell will not receive the deferred share award portion of the 2014 APP award, which would otherwise have had a value upon grant equal to the cash portion.  Mr Kinsell will not receive any APP award in relation to 2015.

In line with the Remuneration Committee’s policy on termination of employment, the deferred share portion of Mr Kinsell’s 2012 APP award and 2013 APP award will lapse. The Remuneration Committee has used its discretion as permitted under the rules to allow the deferred share portion of Mr Kinsell’s 2011 APP award to pay out in full on the normal vesting date, 20 February 2015, given his period of service and contribution to the company, and that his termination date is less than a month prior to the end of the vesting period. This is presently equal in value to $931,065, based on an award of 22,709 shares and an illustrative share price of £26.08 (the closing share price as at 1 December 2014).

Long-Term Incentive Plan (LTIP)

In line with the remuneration policy on termination of employment, the Remuneration Committee has determined that the 2012-2014 LTIP award will be retained in accordance with and subject to the terms of the LTIP rules, as the performance period for this award will be completed by the time of Mr Kinsell’s departure date. This award will be released on the normal vesting date, and only to the extent the performance conditions are fulfilled. The vesting of this LTIP award will remain subject to clawback provisions which apply to all award holders under the terms of the LTIP until the vesting date.

Also in line with policy, the Remuneration Committee has determined that  Mr Kinsell will  continue to be entitled to the 2013-2015 LTIP award and 2014-2016 LTIP award, subject to the satisfaction of performance conditions, but Mr Kinsell’s award will be  pro-rated based on the proportion of the performance period in which Mr Kinsell remained in employment. These awards will be released on the relevant normal vesting dates, subject to and only to the extent the performance conditions are fulfilled. These LTIP awards will remain subject to clawback provisions, which apply to all award holders under the terms of the LTIP until the vesting date.

As already mentioned, the Remuneration Committee has reserved the right to determine that, prior to the vesting of shares under each outstanding LTIP cycle, Mr Kinsell’s entitlement to shares under the LTIP will be forfeited in full if Mr Kinsell commits a breach of his continuing post-termination contractual obligations.

Plan	Date of Award	Original Award (number of shares)	Illustrative Share Price*	Estimated value at vesting (subject to performance conditions)**	Vesting date
2012-2014 LTIP	05 April 2012	68463	26.08	$1,403,486	18 February 2015
			($41.00)
2013-2015 LTIP	05 April 2013	53049	26.08	$755,209	Day after announcement of IHG 2015 annual results in February 2016
			($41.00)
2014-2016 LTIP	08 April 2014	51426	26.08	$380,694	Day after announcement of IHG 2016 annual results in February 2017
			($41.00)

*Closing share price at 1 December 2014; dollar equivalent calculated using Financial Times closing mid-point rate on 1 December 2014 ($1=£0.6361)

**Outstanding LTIP awards remain subject to performance conditions. The estimated value assumes 50% vesting for all awards (consistent with the assumption used in the IHG 2013 Directors’ Remuneration Report illustrative scenarios) and the proportion of the award vesting has been pro-rated based on Mr Kinsell’s termination date.

The above information is provided pursuant to section 430 (2B) of the Companies Act 2006 (to the extent it has been finally determined).

 

¹ Kirk has spent 19 years in total with IHG and Holiday Inn Worldwide in a number of roles, including Vice President of Development, Canada & Mexico (1988 to 1990); Vice President of North America (1990 to 1992) and Senior Vice President of Development and Franchise Services (1992 to 1995). It was during this time that Kirk led the launch of Holiday Inn Express. He subsequently left the business for a period of time before re-joining in 2002 in the same role, which he held for a further two years. It was during this period that Kirk co-led the launch of Hotel Indigo for the Group. In 2004 he became Chief Development Officer for the Americas before being appointed President, Europe, Middle East & Africa (AMEA) in 2007. Kirk was appointed to IHG’s Board on 1st August 2010 and took up his current position as President of the Americas in June 2011.

Notes to Editors:

IHG (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of nine hotel brands, including InterContinental® Hotels & Resorts, Hotel Indigo®, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Staybridge Suites®, Candlewood Suites®, EVEN™ Hotels and HUALUXE® Hotels and Resorts.

IHG manages IHG® Rewards Club, the world’s first and largest hotel loyalty programme with over 82 million members worldwide. The programme was relaunched in July 2013, offering enhanced benefits for members including free internet across all hotels, globally.

IHG franchises, leases, manages or owns over 4,700 hotels and 697,000 guest rooms in nearly 100 countries, with almost 1,200 hotels in its development pipeline.

InterContinental Hotels Group PLC is the Group’s holding company and is incorporated in Great Britain and registered in England and Wales.

Visit www.ihg.com for hotel information and reservations and www.ihgrewardsclub.com for more on IHG Rewards Club. For our latest news, visit: www.ihg.com/media, www.twitter.com/ihg,www.facebook.com/ihg or www.youtube.com/ihgplc.