SEGRO - Annual Report 2007 - Governance > Remuneration Report

	Salaries and fees £000	Benefits £000	Annual Incentive Plan £000	Total 2007 £000	Total 2006 £000

Nigel Rich Chairman	220	-	-	220	83

Executive Directors
Ian Coull Chief Executive	529	48	540	1,117	908
John Heawood	314	17	252	583	437
David Sleath •	337	101	280	718	479
Marshall Lees* (resigned 1 August 2007)	191	17	1,025	1,233	367
Walter Hens# (appointed 1 January 2007)	298	59	288	645	-

Non-Executive Directors - Fees
Lord Blackwell Senior Independent Director	44	-	-	44	43
Stephen Howard Chairman of the Remuneration Committee	44	-	-	44	43
Andrew Palmer Chairman of the Audit Committee	44	-	-	44	40
Christopher Peacock	38	-	-	38	37
Thom Wernink	38	-	-	38	36
Lesley MacDonagh (appointed 1 January 2007)	38	-	-	38	-

Total	2,135	242	2,385	4,762	2,473

•	David Sleath was paid a one off fee of £72,929, for the transaction costs associated with the identification and purchase of a suitable property, nearer to the London and Slough offices, that would help him reduce the time spent commuting, particularly during heightened business activity.

*	Marshall Lees was, until its sale on 1 August 2007, Chief Executive of Slough Estates USA Inc. and was resident and remunerated in the USA. He received an incentive award of £191,498 in respect of 2007 performance together with a performance and retention bonus of £833,333. (Exchange rate used was $1.98 which is an average calculated from 1 January 2007 to 1 August 2007, the date at which Marshall left the Company).

#	In respect of his responsibilities across Europe, Walter Hens received the exclusive use of a leased flat in Paris. This arrangement will cease with effect from October 2008. As a result of changes to his accountabilities, Walter Hens’ contract was changed on 1 January 2008. Certain benefits paid in 2007, which applied to accountabilities discharged in France, Germany and Belgium ceased from that date.

All the Executive Directors receive benefits comprising the provision of health insurance, life insurance and a company car.

Ian Coull was paid a fee of £1,300 in respect of his services as a Non-Executive Director of the London Regional Board of Royal & SunAlliance plc, David Sleath was paid a fee of £19,333 as a Non-Executive Director of Bunzl plc and Walter Hens received no fees in respect of his services as a Non-Executive Director of Intervest offices.

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Directors’ Interests in Shares
The interests of the Directors and their immediate families in the ordinary shares of the Company at 1 January 2007 and 31 December 2007 were:

	Beneficial interests
Number of ordinary shares	31.12.07 Ordinary 271/12p shares**	01.01.07 Ordinary 25p shares

Nigel Rich	27,001	25,000
Lord Blackwell	5,807	2,500
Ian Coull	128,763	72,571
John Heawood	67,385	75,526
Walter Hens	23,822	25,808
Stephen Howard	6,923	7,500
Marshall Lees*	67,073	61,379
Lesley MacDonagh	5,000	-
Andrew Palmer	3,692	2,500
Christopher Peacock	7,972	2,500
David Sleath	17,708	10,000
Thom Wernink	9,230	-

*	Marshall Lees left the Company on 1 August 2007. The above reflects the shareholding as at 1 August 2007.

**	On 20 August 2007, there was a share consolidation on a 12 for 13 basis, details of which are provided in note 29 to the accounts.

Beneficial interests in the table above represent shares beneficially held by each Director, they include any ordinary shares held on behalf of Directors by the Trustees of the Share Incentive Plan (interests created as a result of acting as a Trustee to the Share Incentive Plan are shown separately in the following table) and shares beneficially owned by spouses and children under 18 of the Directors.

Between 31 December 2007 and 5 March 2008 there were no changes in respect of the Directors’ shareholdings.

As at 31 December 2007, 2,344,136 shares (2006: 1,754,937 shares) were held by the Trustees of the 1994 SEGRO plc Employees’ Benefit Trust. There have been no changes to this holding since year end. As with other employees, the Directors are deemed to have a potential interest in those shares, being beneficiaries under the trust.

The table below shows the non-beneficial interests of the SIP Trustees in their respective capacities as Trustees of the SIP.

Number of ordinary shares	31.12.07 Ordinary 27 1/12p shares	01.01.07 Ordinary 25p shares

John Heawood, John Probert and Jennifer Titford
(as Trustees of the SIP)	511,464	494,170

The Trustees of the SIP transferred 244,183 ordinary shares between 31 December 2007 and 5 March 2008.

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LTIS
Long-Term Share Incentive Scheme

	Number of shares under award 01.01.07	Number of shares lapsed/ number of shares not released	Number of shares over which awards granted	Market value of shares on grant £	Number of shares released	Market value on date of release £	Number of shares under award 31.12.07	End of performance period over which performance conditions have to be met

Ian Coull
14.05.04	55,395	33,237		4.28	22,158	6.415
04.05.05	123,421			4.80			123,421	31.12.07
25.05.06	108,112			6.01			108,112	31.12.08
29.06.07			136,223	6.25			136,223	31.12.09

Total	286,928						367,756

John Heawood
14.05.04	23,081	13,849		4.28	9,232	6.415
04.05.05	53,305			4.80			53,305	31.12.07
25.05.06	45,824			6.01			45,824	31.12.08
29.06.07			46,390	6.25			46,390	31.12.09

Total	122,210						145,519

Walter Hens
25.05.06	34,385			6.01			34,385	31.12.08
29.06.07			60,707	6.25			60,707	31.12.09

Total	34,385						95,092

Marshall Lees*
14.05.04	23,726			4.28	9,490	6.415
				4.28	14,236	5.14
04.05.05	53,390			4.80	53,390	5.14
25.05.06	73,044			6.01	73,044	5.14
29.06.07			47,854	6.25	47,854	5.14

Total	150,160						nil

David Sleath
04.05.05	51,254			4.80			51,254	31.12.07
25.05.06	50,916			6.01			50,916	31.12.08
29.06.07			66,047	6.25			66,047	31.12.09

Total	102,170						168,217

* Marshall Lees left the Company on 1 August 2007; his LTIS awards vested on 6 August 2007.

No variations have been made to the terms and conditions of any of the awards. The performance targets are based on the achievement of real growth in adjusted EPS and adjusted diluted NAV over a period of three years.

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Options under The Plans and SAYE Scheme


		No of shares under option at 01.01.07	No of shares over which options granted	No of shares cancelled/ lapsed	No of shares under which options exercised	Option price £	Mid market value on day of exercise £	No of shares under option at 31.12.07	Period in which options can be exercised

Ian Coull	3	8,720			8,720	3.44	6.25
	2	107,559			107,559	3.44	6.25
	2	85,515		85,515		4.6775
	4	4,726				3.724		4,726	01.05.11-31.10.11

Total		206,520						4,726

John Heawood	2	53,447		53,447		4.6775
	4	1,769		1,769		5.284
	4		2,298			4.112		2,298	01.10.10-31.03.11

Total		55,216						2,298

Walter Hens		nil						nil

Total		nil						nil

Marshall Lees*	1	28,662				3.565		28,662	28.03.04-27.03.08
	2	86,742				2.90		86,742	20.03.06-19.03.13
	2	54,940		54,940		4.6775

Total		170,344						115,404

David Sleath	4	3,046		3,046		5.284
	4		3,982			4.112		3,982	01.10.12-31.03.13

Total		3,046						3,982

* Marshall Lees left the Company 1 August 2007.

1 – Unapproved 1994 Scheme
2 – 2002 No 2 Plan
3 – 2002 Plan
4 – SAYE Scheme

The aggregate gross gain on exercise of options by Ian Coull was £326,744.

No payment is required for the grant of an option under the Unapproved 1994 Scheme, 2002 Plans and the SAYE Scheme.

There have been no changes to the terms and conditions of the 2002 Plans, the Unapproved 1994 Scheme and the SAYE Scheme during the year. The exercise of options granted under the 2002 Plans and the Unapproved 1994 Scheme were subject to performance conditions. Options granted under the Unapproved 1994 Scheme were only exercisable if the growth in the Company’s adjusted EPS exceeded the increase in the RPI over any three year period from the date of grant plus 6 per cent. Options granted under the 2002 Plans were only exercisable if the Company’s adjusted EPS exceeded the growth in the RPI by at least 3 per cent per annum measured over three financial years beginning with the financial year in which the option was granted.

The market price of the shares as at 31 December 2007 was 470.0 pence. The highest and lowest market prices of ordinary shares during the financial year were 801.5 pence and 390.75 pence.

Between 31 December 2007 and 5 March 2008 there were no changes to the above option figures.

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Pension and Retirement benefits
The pension provided for Ian Coull comes from two sources. In respect of his salary up to the HMRC Notional Earnings Cap (currently £112,800) Ian Coull accrues pension in the SEGRO Pension Scheme, formerly the Slough Estates (1957) Pension Scheme (the SEGRO Scheme). The remaining pension is accrued via the UURB which is detailed on page 63.

Pension policy for Executive Directors has not been changed during 2007. Pensions for John Heawood and David Sleath are provided through the SEGRO Scheme. Both John Heawood and David Sleath may retire at age 62 or any time up to age 65. Their pension benefits were agreed to broadly target a pension at age 62 of two-thirds of final pensionable salary less any retained benefits from previous employment. Depending on future experience, the pensions that they actually receive may be higher or lower than this. Upon reaching the target, John Heawood and David Sleath may then accrue a 1/60th of final pensionable salary for every completed year of subsequent service, which is in line with ordinary members of the SEGRO Scheme.

The SEGRO Scheme is contracted-out of the State Second Pension and is HMRC registered. It has been registered with the Pensions Regulator.

Set out below are details of the pension benefits to which each of the Executive Directors are entitled in respect of the disclosure required by paragraph 12 (2) Schedule 7A to the Companies Act 1985. The values given below include the effect of inflation in their calculation.

Director	Additional accrued pension earned in the year £ p.a.	Accrued pension at 31.12.07 £ p.a.	Transfer value at 31.12.06 £*	Transfer value at 31.12.07 £*	Increase in transfer value less Directors' contributions £

Ian Coull	32,007	116,381	1,257,208	1,776,736	487,803
John Heawood	11,192	45,802	484,427	638,173	135,146
Marshall Lees**	2,959	138,008	2,065,244	1,864,697	(200,547)
David Sleath	9,974	18,757	76,268	164,747	68,229

Transfer values have been calculated in accordance with Actuarial Guidance note GN11. They do not represent sums payable to individual Directors.

The figures shown in the table above for Marshall Lees have been calculated in a consistent manner with previous years’ disclosures. However, Marshall Lees left the Company on 1 August 2007 following the sale of Slough Estates USA. The figures in the table above are therefore shown at 1 August 2007 rather than 31 December 2007. On leaving the Company, Marshall Lees’ total benefit entitlement was as follows:

-	An annuity with a cost of $4,630,366 (of which $1,791,026 is in respect of a tax gross-up)

-	United of Omaha Life Insurance Company deferred annuity at normal retirement date of $28,951 per annum;

-	Slough Parks Incorporated Money Purchase Pension Plan fund value of $242,246 Slough Parks Incorporated 401(k) Profit Sharing Plan fund value of $104,052; and

-	A deferred pension from the SEGRO Scheme of £7,866 p.a. (plus future revaluation) payable from normal retirement date.

The accrued pension entitlement is the amount of retained benefit that the Executive Directors would be entitled to if they left service at the year end. Retained benefits are payable from normal retirement age.

The Group had provided Marshall Lees, a resident of the USA, with a pension entitlement broadly equivalent to the benefit that he would receive had he continued to be a member of the SEGRO Scheme until his date of leaving, 1 August 2007. His entire pension liability, excluding his UK liability, was met following the completion of the sale of Slough Estates USA and he resigned from his position on the Board. There are no further liabilities in respect of Marshall Lees pension other than his retained pension in the SEGRO Scheme. Marshall Lees has a deferred pension under the SEGRO Scheme but is no longer accruing any additional benefits.

Walter Hens participates in the pension plan which is established for Belgian employees. This arrangement is a defined contribution arrangement which is based with an insurance company. As a participant in this plan the Company makes a contribution on behalf of Walter Hens of 9.725 per cent of salary and Walter Hens is required to contribute 4.8 per cent of salary. He has no pension benefits under the SEGRO Scheme.

In addition to participating in a defined contribution arrangement there is a deferred compensation arrangement, held in Belgium, in respect of Walter Hens which he will be the beneficiary of in 2013 or earlier if he should choose to take his Belgian State Pension sooner than 2013. The contributions to this arrangement were bonus payments which Walter Hens has been awarded in previous years’ of service. No contributions to this arrangement have been made since 2004 and no further contributions will be made.

Set out below are details of the pension benefits for each of the Executive Directors for the disclosure required under Rule 9.8.8 (12) of the Listing Rules which are not shown above. The values given below exclude the effect of inflation from their calculation.

Director	Additional accrued pension in the year excluding inflation £p.a.	Transfer value of increase in accrued pension less Directors' contributions £

Ian Coull	28,970	385,578
John Heawood	9,946	102,245
Marshall Lees	(1,903)	(25,760)
David Sleath	9,657	62,143

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Ian Coull’s Unfunded Unapproved Retirement Benefits Scheme (UURBS) Arrangement
Ian Coull will be entitled at age 62 to a total pension of two-thirds of his final pensionable salary less any retained benefits from prior employment. Final pensionable salary and retained benefits will be as defined in the rules (as modified by the UURBS) of the SEGRO Scheme, of which he is a member.

His entitlement to a pension from the Company will consist of a pension from the SEGRO Scheme and a company pension for which provision is being made in the accounts. The scheme pension will be the maximum that could be paid from the SEGRO Scheme without prejudicing the former HMRC approval limits (subject to a maximum of his total pension entitlement). The Company pension will be the balance of the total pension over and above the SEGRO Scheme pension.

The Company will provide the company pension by means of the UURBs. It may be provided either as a regular monthly income in retirement, or a cash lump sum in lieu of the pension which would otherwise have been payable.

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Pension Entitlement in the Event of Severance
On leaving service before retirement age, the Executive Directors (with the exception of Marshall Lees and Walter Hens – see above) are entitled to either a deferred pension calculated at the date of leaving and which is payable from Normal Retirement Age or a transfer value payable to another pension scheme in respect of those benefits.

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Former Directors
Ex-gratia payments to former Directors and their dependants were £65,148 (2006: £84,740).

Lord MacGregor, a former Director, was appointed as a Company nominated Trustee of the SEGRO Scheme on 1 June 2006. He received fees from the Company of £30,000 (2006: £15,703). Richard Kingston, a former Director, was appointed as a Company nominated Trustee of the SEGRO Scheme on 1 January 2007. He received fees from the Company of £15,000.

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Approval
At the AGM of the Company to be held on 20 May 2008 an ordinary resolution approving this report will be proposed. This report was approved by the Board of Directors on 5 March 2008 and signed on its behalf by order of the Board.

S L Howard
Chairman of the Committee
5 March 2008

Note: Lovells LLP, Watson Wyatt LLP and Hewitt Bacon & Woodrow Ltd have given and not withdrawn their written consent to issue this document with the inclusion of references to their names in the form and context in which they appear.

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