Supplementary information

Directors’ outstanding long-term incentive awards

Share-based long-term incentive awards

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  Plan name



Year of award



Conditional share awards outstanding at 1 Jan 2013

(Number of shares)
Conditional awards in 2013

(Number of shares)
Market price at date of award


(pence)
Dividend equivalents on vested shares (Number of shares released)2 Rights exercised in 2013



Rights lapsed in 2013



Conditional share awards outstanding at 31 December 2013

(Number of shares)
Date of end of performance period



Notes

  1. The awards for Barry Stowe and Mike Wells were made in ADRs. The figures in the table are represented in terms of ordinary shares (1 ADR = 2 shares).
  2. In 2010 a scrip dividend equivalent and in 2011, 2012 and 2013 a DRIP dividend equivalent were accumulated on these awards.
  3. The table above reflects the maximum number of shares (150 per cent of the original number awarded) which may be released to Mike Wells under the JNL Performance Share Plan. This maximum number of shares may be released if stretch performance targets are achieved.
John Foley GPSP 2011 152,484   733.5       152,484 31 Dec 13
GPSP 2012 199,433   678       199,433 31 Dec 14
PLTIP 2013   131,848 1,203       131,848 31 Dec 15
      351,917 131,848         483,765  
Jackie Hunt PLTIP 2013   106,805 1,176       106,805 31 Dec 13
PLTIP 2013   95,585 1,176       95,585 31 Dec 14
GPSP 2013   118,040 1,176       118,040 31 Dec 15
        320,430         320,430  
Michael McLintock GPSP 2010 66,238   568.5 7,490 66,238   31 Dec 12
GPSP 2011 48,517   733.5       48,517 31 Dec 13
GPSP 2012 47,079   678       47,079 31 Dec 14
PLTIP 2013   46,687 1,203       46,687 31 Dec 15
      161,834 46,687   7,490 66,238   142,283  
Nic Nicandrou GPSP 2010 208,179   568.5 23,548 208,179   31 Dec 12
GPSP 2011 152,484   733.5       152,484 31 Dec 13
GPSP 2012 185,374   678       185,374 31 Dec 14
PLTIP 2013   122,554 1,203       122,554 31 Dec 15
      546,037 122,554   23,548 208,179   460,412  
Barry Stowe1 GPSP 2010 129,076   568.5 14,522 129,076   31 Dec 12
BUPP 2010 129,076   568.5 13,824 122,880 6,196 31 Dec 12
GPSP 2011 88,270   733.5       88,270 31 Dec 13
BUPP 2011 88,270   733.5       88,270 31 Dec 13
GPSP 2012 95,642   678       95,642 31 Dec 14
BUPP 2012 95,642   678       95,642 31 Dec 14
PLTIP 2013   131,266 1,203       131,266 31 Dec 15
      625,976 131,266   28,346 251,956 6,196 499,090  
Tidjane Thiam GPSP 2010 510,986   568.5 57,806 510,986   31 Dec 12
GPSP 2011 374,279   733.5       374,279 31 Dec 13
GPSP 2012 523,103   678       523,103 31 Dec 14
PLTIP 2013   345,831 1,203       345,831 31 Dec 15
      1,408,368 345,831   57,806 510,986   1,243,213  
Mike Wells1, 3 JNL PSP 2009 218,100   455.5   218,100   31 Dec 12
JNL PSP 2010 141,000   568.5       141,000 31 Dec 13
GPSP 2011 197,648   733.5       197,648 31 Dec 13
BUPP 2011 197,648   733.5       197,648 31 Dec 13
GPSP 2012 199,256   678       199,256 31 Dec 14
BUPP 2012 199,256   678       199,256 31 Dec 14
PLTIP 2013   273,470 1,203       273,470 31 Dec 15
      1,152,908 273,470     218,100   1,208,278    

Business-specific cash-based long-term incentive plans

Details of all outstanding awards under cash-based long-term incentive plans are set out in the table below. The performance period for all M&G Executive LTIP awards is three years while the performance period for all JNL LTIP awards is four years:

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  Year of initial
award

Face value of conditional share awards outstanding at 1 January 2013
£000
Conditionally awarded in 2013
£000
Payments made in 2013
£000
Face value of conditional share awards outstanding at 31 December 2013
£000
Date of end of performance period

Note

Under the M&G Executive LTIP, the value of each unit at award is £1. The value of units changes based on M&G’s profit growth and investment performance over the performance period. For the 2010 award of 987,179 units, the unit price at the end of the performance period was £2.65, which resulted in a payment of £2,616,024 to Michael McLintock during 2013. For the 2011 award of 1,318,148 units, the unit price at the end of the performance period was £2.30. This will result in payment of £3,031,740 to Michael McLintock in 2014.

See annual report on remuneration for a description of the JNL LTIP. Performance over the period from 2009 to 2012 resulted in a payment of £1,117,509 to Mike Wells during 2013. Performance over the period from 2010 to 2013 will result in a payment of £633,946 being paid to Mike Wells in 2014. The awards above were made before Mike Wells became an executive director and it is anticipated that no further awards will be made to him under this plan.

The sterling face value of Mike Wells’ JNL LTIP awards have been calculated using the average exchange rate for the year in which the grant was made. The dollar face value of conditional share awards outstanding on 1 January 2013 and 31 December 2013 was US$2,800,000 and US$1,400,000 respectively.

Michael McLintock            
M&G Executive LTIP 2010 987   2,616 31 Dec 12
M&G Executive LTIP 2011 1,318     1,318 31 Dec 13
M&G Executive LTIP 2012 953     953 31 Dec 14
M&G Executive LTIP 2013   1,112   1,112 31 Dec 15
Total cash payments made in 2013       2,616    
Mike Wells            
JNL LTIP 2009 894   1,118 31 Dec 12
JNL LTIP 2010 906     906 31 Dec 13
Total cash payments made in 2013       1,118    

Other share awards

The table below sets out the share awards that have been made to executive directors under their appointment terms and those deferred from annual incentive plan payouts. The number of shares is calculated using the average share price over the three business days commencing on the day of the announcement of the Group’s annual financial results for the relevant year. For the awards from the 2012 annual incentives, made in 2013, the average share price was 1,124.17 pence.

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  Year of grant Conditional share awards outstanding at 1 January 2013 (Number of shares) Con-ditionally awarded in 2013 (Number of shares) Dividends accumu– lated in 2013 (Number of shares)2 Shares released in 2013 (Number of shares) Conditional share awards outstanding at 31 December 2013 (Number of shares) Date of end of restricted period Date of release Market price at date of award (pence) Market price at date of vesting or release (pence)

Notes

  1. The Deferred Share Awards for Barry Stowe and Mike Wells were made in ADRs. The figures in the table are represented in terms of ordinary shares (1 ADR = 2 shares).
  2. In 2010 a scrip dividend equivalent and in 2011, 2012 and 2013 a DRIP dividend equivalent were accumulated on these awards.
  3. This award attracts dividends in the form of cash rather than shares.
John Foley                    
Deferred 2011 annual incentive award 2012 46,057   1,189   47,246 31 Dec 14   750  
Deferred 2012 annual incentive award 2013   34,727 896   35,623 31 Dec 15   1,055  
    46,057 34,727 2,085 82,869        
Michael McLintock                    
Deferred 2009 annual incentive award 2010 77,493     77,493 31 Dec 12 02 Apr 13 552.5 1,083
Deferred 2010 annual incentive award 2011 80,753   2,085   82,838 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012 37,284   962   38,246 31 Dec 14   750  
Deferred 2012 annual incentive award 2013   35,905 926   36,831 31 Dec 15   1,055  
    195,530 35,905 3,973 77,493 157,915        
Nic Nicandrou                    
Deferred 2009 annual incentive award 2010 27,276     27,276 31 Dec 12 02 Apr 13 552.5 1,083
Deferred 2010 annual incentive award 2011 49,862   1,287   51,149 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012 45,060   1,163   46,223 31 Dec 14   750  
Deferred 2012 annual incentive award 2013   38,836 1,003   39,839 31 Dec 15   1,055  
    122,198 38,836 3,453 27,276 137,211        
Barry Stowe1                    
Deferred 2009 annual incentive award 2010 40,474     40,474 31 Dec 12 02 Apr 13 552.5 1,083
Deferred 2010 annual incentive award 2011 58,314   1,522   59,836 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012 52,446   1,368   53,814 31 Dec 14   750  
Deferred 2012 annual incentive award 2013   37,726 984   38,710 31 Dec 15   1,055  
    151,234 37,726 3,874 40,474 152,360        
Tidjane Thiam                    
Deferred 2009 annual incentive award 2010 65,482     65,482 31 Dec 12 02 Apr 13 552.5 1,083
Deferred 2010 annual incentive award 2011 229,515   5,929   235,444 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012 104,719   2,705   107,424 31 Dec 14   750  
Deferred 2012 annual incentive award 2013   88,954 2,297   91,251 31 Dec 15   1,055  
    399,716 88,954 10,931 65,482 434,119        
Mike Wells1                    
2009 after tax deferral program award3 2010 32,250     32,250 15 Mar 13 15 Mar 13 520 1,154
Deferred 2010 Group deferred bonus plan award 2011 94,080   2,456   96,536 31 Dec 13   721.5  
Deferred 2011 annual incentive award 2012 96,336   2,514   98,850 31 Dec 14   750  
Deferred 2012 annual incentive award 2013   80,364 2,096   82,460 31 Dec 15   1,055  
    222,666 80,364 7,066 32,250 277,846        

All-employee share plans

It is important that all employees are offered the opportunity to own shares in Prudential, connecting them both to the success of the Company and to the interests of other shareholders. Executive directors are invited to participate in these plans on the same basis as other staff in their location. No directors or other employees are provided with loans to enable them to buy shares.

Save As You Earn (SAYE) schemes

UK based executive directors are eligible to participate in the HM Revenue and Customs (HMRC) approved Prudential Savings-Related Share Option Scheme and Barry Stowe is invited to participate in the similar International Share Ownership Scheme. These schemes allow all eligible employees to save towards the exercise of options over Prudential plc shares with the option price set at the beginning of the savings period at a discount of up to 20 per cent of the market price.

In 2013, participants could elect to enter into savings contracts of up to £250 per month for a period of three or five years. At the end of this term, participants may exercise their options within six months and purchase shares. If an option is not exercised within six months, participants are entitled to a refund of their cash savings plus interest, if applicable under the rules. Shares are issued to satisfy those options which are exercised. No options may be granted under the schemes if the grant would cause the number of shares which have been issued, or which remain issuable pursuant to options granted in the preceding 10 years under the scheme and any other option schemes operated by the Company, or which have been issued under any other share incentive scheme of the Company, to exceed 10 per cent of the Company’s ordinary share capital at the proposed date of grant.

Details of executive directors’ rights under the SAYE scheme are set out in the ‘Statement of directors’ shareholdings’.

Share Incentive Plan (SIP)

UK-based executive directors are also eligible to participate in the Company’s HMRC approved Share Incentive Plan (SIP). In 2013, all UK based employees were able to purchase Prudential plc shares up to a value of £125 per month from their gross salary (partnership shares) through the SIP. For every four partnership shares bought, an additional matching share is awarded which is purchased by Prudential on the open market. Dividend shares accumulate while the employee participates in the plan. If the employee withdraws from the plan, or leaves the Group, matching shares may be forfeited.

The table below provides information about shares purchased under the SIP together with Matching Shares (awarded on a 1:4 basis) and dividend shares.

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  Year of initial grant


SIP awards held in trust at 1 Jan 2013 (Number of shares) Partnership shares accumulated in 2013 (Number of shares) Matching shares accumulated in 2013 (Number of shares) Dividend shares accumulated in 2013 (Number of shares) SIP awards held in trust at 31 Dec 2013 (Number of shares)
Nic Nicandrou 2010 869 136 34 25 1,064
Jackie Hunt 2013 19 4 23

Dilution

Releases from the Prudential Long Term Incentive Plan, GPSP and BUPP are satisfied using new issue shares, rather than by purchasing shares in the open market. Shares relating to options granted under all-employee share plans are also satisfied by new issue shares. The combined dilution from all outstanding shares and options at 31 December 2013 was 0.2 per cent of the total share capital at the time. Deferred shares will continue to be satisfied by the purchase of shares in the open market.

Five highest paid individuals

Of the five individuals with the highest emoluments in 2013, three were directors whose emoluments are disclosed in this report.

The aggregate of the emoluments of the other two individuals for 2013 were as follows:

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  2013
£000
Base salaries, allowances and benefits in kind 335
Pension contributions 70
Performance-related pay 24,601
Total 25,006

Their emoluments were within the following bands:

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  Number of five highest paid employees 2013
£7,500,001 – £7,600,000 1
£17,400,001 – £17,500,000 1

Signed on behalf of the Board of directors

Lord Turnbull
Chairman of the Remuneration Committee
11 March 2014

Paul Manduca
Chairman
11 March 2014

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