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  Remuneration Report to Shareholders

Management Development and Remuneration Committee and its Terms of Reference
The Management Development and Remuneration Committee of the board comprises all the independent non-executive directors of the company as set out in the Board of Directors section and the group Chairman, who was appointed to the Committee during the year. The Chairman of the Committee is Mr C D Mackay.

The Committee’s terms of reference include determination on behalf of the board of fair remuneration for the executive directors and of the group Chairman (in which case the group Chairman does not participate), which recognises their individual contributions to the company’s overall performance. In addition, the Committee assists the board in ensuring that the senior management of the group are recruited, developed and remunerated in an appropriate fashion. The Director of Human Resources, Mr I F Stephenson, acts as secretary to the Committee. The full terms of reference of the Committee are available on the company’s website at www.matthey.com.

Non-executive directors’ remuneration is determined by the board, within the limits prescribed by the company’s Articles of Association. The remuneration consists of fees, which are set following advice taken from independent consultants and are reviewed at regular intervals.

Executive Remuneration Policy
The Committee believes strongly that remuneration policy should be closely aligned with shareholder interests. The Committee recognises that, in order to maximise shareholder value, it is necessary to have a competitive pay and benefits structure. The Committee also recognises that there is a highly competitive market for successful executives and that the provision of appropriate rewards for superior performance is vital to the continued growth of the business. To assist with this, the Committee appoints and receives advice from independent remuneration consultants on the pay and incentive arrangements prevailing in comparably sized industrial companies in each country in which Johnson Matthey has operations. During the year, such advice was received from the Hay Group, which also provided advice on job evaluation, and PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP also provided expatriate tax advice, tax audit work, completion of overseas tax returns, advice on set up of new overseas operations and some overseas payroll services. The Committee also receives recommendations from the Chief Executive on the remuneration of those reporting to him as well as advice from the Director of Human Resources. Total potential rewards are earned through the achievement of demanding performance targets based on measures that represent the best interests of shareholders.

The remuneration policy is reviewed by the Committee annually and a formal review is undertaken every three years. Remuneration consists of basic salary, annual bonus, a long term incentive plan, share options and other benefits. Salaries are based on median market rates with incentives providing the opportunity for upper quartile total remuneration, but only for achieving outstanding performance.

To ensure the interests of the executive directors remain aligned with those of the shareholders, they are encouraged to build up over time and hold a shareholding in the company equal to at least one times their basic salary.

During 2006/07 the Committee undertook a comprehensive review of the executive director and senior management remuneration arrangements within the group, which included advice from independent consultants PricewaterhouseCoopers LLP and consultation with the company’s major institutional shareholders and representative organisations. As a result of this review, changes are proposed to remuneration relating to annual bonus, long term incentive plan and share options. These proposals in respect of the long term incentive plan are submitted to shareholders for approval at this year’s annual general meeting (AGM) and are explained in the circular containing the notice of the AGM. A copy of the circular may be viewed at www.matthey.com. The arrangements which have been in place to date are described below.

Executive directors’ remuneration consists of the following:
 
     
 
Basic Salary – which is in line with the median market salary for each director’s responsibilities as determined by independent surveys. Basic salary is normally reviewed on 1st August each year and the Committee takes into account individual performance and promotion during the year. Where an internal promotion takes place, the median salary relative to the market would usually be reached over a period of a few years, which can give rise to higher than normal salary increases while this is being achieved.
   
Annual Bonus – which is paid as a percentage of basic salary under the terms of the company’s Executive Compensation Plan (which also applies to the group’s 160 or so most senior executives). The executive directors’ bonus award is based on consolidated profit before tax and one-off items (PBT) compared with the annual budget. The board of directors rigorously reviews the annual budget to ensure that the budgeted PBT is sufficiently stretching. An annual bonus payment of 30% of basic salary (prevailing at 31st March) is paid if the group meets the annual budget. This bonus may rise to 65% of basic salary if the group achieves PBT of 107.5% of budget. A maximum 100% of basic salary may be paid to the Chief Executive and the other executive directors if 115% of budgeted PBT is achieved. PBT must reach 95% of budget for a minimum bonus of 15% to be payable. The Committee has discretion to vary the awards made. The bonus awarded to executive directors for 2006/07 was 51.47% of salary at 31st March 2007 based on an achieved PBT of 104.6% of budget.
   
Long Term Incentive Plan (LTIP) – which is designed to achieve above average performance and growth. It allows share allocations of up to a maximum of 125% of basic annual salary each year to directors and executives. The allocation in 2006 was 100% of basic annual salary for executive directors and 125% for the Chief Executive. The release of the share allocation is subject to the achievement of certain stretching performance targets measured over the three year period from the date of allocation.

Share allocations made prior to 2004 – Share allocations made prior to 2004 are subject to the achievement of performance targets which contain two components – relative total shareholder return (TSR) and absolute TSR.

The first component (50% of the allocation) compares the company’s TSR over the three year performance period with that of a comparator group. The comparator group comprises those companies placed 51-150 in the FTSE Index. All of the shares are released if the company ranks in the 76th percentile or above. None of the shares are released if the company ranks in the 50th percentile or below. If the company ranks between these percentiles 35% to 100% of the shares are released on a straight line basis. In addition, the company’s earnings per share (EPS) must be at least equal to the increase in UK RPI plus 2% per annum over the three year performance period before any release is made.

The second component (50% of the allocation) measures absolute TSR. All of the shares are released if the absolute TSR growth over the three year performance period is 45% or more. Pro rata allocations on a straight line basis of between 50% and 100% are released if absolute TSR growth is between 30% and 45%. Half of the allocated shares are released if TSR growth is 30%. No shares are released for TSR growth of less than 30%.

Share allocations made from 2004 onwards – Share allocations made in 2004 onwards are subject to a relative TSR performance target. This compares the company’s TSR over a three year performance period commencing in the year of allocation with that of a comparator group which comprises those companies placed 51-150 in the FTSE Index. All of the allocated shares are released if the company ranks in the 76th percentile or above. None of the shares are released if the company ranks in the 50th percentile or below. If the company ranks between these percentiles 35% to 100% of the shares are released on a straight line basis. In addition, the company’s EPS must be at least equal to the increase in UK RPI plus 2% per annum over the three year performance period before any release is made.
   
Share Options – Since 2001 options have been granted under the Johnson Matthey 2001 Share Option Scheme (the 2001 Scheme). Options are granted at the market value of the company’s shares at the time of grant and are subject to performance targets over a three year period. Options may be exercised upon satisfaction of the relevant performance targets. Approximately 800 employees are granted options under the 2001 Scheme each year.

Options granted prior to 2004 – Prior to 2004, options granted to the executive directors under the 2001 Scheme were up to a maximum of 100% of basic annual salary each year. Such options can only be exercised if the company’s EPS has grown by at least UK RPI plus 4% per annum over any three consecutive years during the life of the option. These options are subject to annual retesting until they lapse on the tenth anniversary of grant.

There are also options outstanding under the Johnson Matthey 1995 UK and Overseas Executive Share Option Scheme. The last option grant under this scheme was made in 2000. All options were granted in annual tranches up to the maximum permitted of four times earnings and were subject to a performance target of EPS growth of UK RPI plus 2% over the three year performance period. Option grants were not made to executive directors in the years 1998, 1999 and 2000.

Options granted from 2004 onwards – Grants made from 2004 onwards are not eligible for retesting and are subject to a three year performance target of EPS growth of UK RPI plus 3% per annum. If the performance target is not met at the end of the three year performance period, the options will lapse. In addition, to reduce the cost calculated under the International Financial Reporting Standard IFRS 2 – ‘Share-based Payment’, gains are capped at 100% of the grant price.

The Committee has the discretion to award grants greater than 100% of basic annual salary. Grants above this threshold are, however, subject to increasingly stretching performance targets. Grants between 100% and 125% of basic annual salary are subject to EPS growth of UK RPI plus 4% per annum and grants between 125% and 150% of basic annual salary are subject to EPS growth of UK RPI plus 5% per annum. In 2006 the executive directors were granted options equal to 150% of basic annual salary.
   
Pensions – All the executive directors are members of the Johnson Matthey Employees Pension Scheme in the UK. Messrs Carson and Hawker ceased to accrue pensionable service in the scheme on 31st March 2006. Mr L C Pentz, a US citizen, joined the scheme in January 2006. Prior to this he was a member of the Johnson Matthey Inc. Salaried Employees Pension Plan in the US. Under the UK scheme, members are entitled to a pension based on their pensionable service and final pensionable salary. The scheme also provides life assurance cover of four times annual salary. The normal scheme pension age for directors is 60. None of the non-executive directors are members of the scheme. Click here for details of the individual arrangements for executive directors.
   
Other Benefits – Available to the executive directors are private medical insurance, a company car and membership of the group’s employee share incentive plans which are open to all employees in the countries in which the group operates such schemes.
   
Service Contracts – The executive directors are employed on contracts subject to one year’s notice at any time. On early termination of their contracts the directors would normally be entitled to 12 months’ salary and benefits.
   
 
Directors’ Emoluments 2006/07
 
Date of
service
agreement
 
Date of
appointment
 
Base
salary
£’000
 
Payment
in lieu of
pension (1)
£’000
 
Annual
bonus
£’000
 
Benefits
£’000
 
Total
excluding
pension
£’000
 
Total prior
year
excluding
pension
£’000
 

 

 

 

 

 

 

 

Executive                              
N A P Carson
1.8.99
 
1.8.99
 
590
 
147
 
314
 
29
 
1,080
 
785
P N Hawker
1.8.03
 
1.8.03
 
287
 
72
 
152
 
21
 
532
 
387
D W Morgan
1.8.99
 
1.8.99
 
293
 
 
154
 
26
 
473
 
422
L C Pentz (2)
1.1.06
 
1.8.03
 
287
 
 
152
 
272
 
711
 
534
J N Sheldrick (3)
24.11.97
 
3.9.90
 
392
 
 
206
 
14
 
612
 
544
         

 

 

 

 

 

Total
 
 
1,849
 
219
 
978
 
362
 
3,408
 
2,672
         

 

 

 

 

 

 
   
 
Date of
letter of
appoint
ment
Date of
appointment
Fees
£’000
Total
excluding
pension
£’000
Total prior
year
excluding
pension (7)
£’000
 

 

 

 

 

Non-Executive (4)                  
Sir John Banham (Chairman)
10.12.05
1.1.06
250
250
31
M B Dearden
5.1.99
1.4.99
40
40
40
C D Mackay
5.1.99
27.1.99
45 (5)
45
45
I C Strachan
10.12.01
23.1.02
40
40
40
A M Thomson
1.8.02
24.9.02
45 (6)
45
45
R J W Walvis
1.8.02
24.9.02
40
40
40
         

 

 

Total
460
460
241
         

 

 

 
     
 
Notes
(1) Mr Carson and Dr Hawker ceased to accrue pensionable service in the UK pension scheme with effect from 31st March 2006. They received a cash payment in lieu of pension equal to 25% of basic salary. This is taxable under the PAYE system.
   
(2) Mr Pentz’s emoluments from 1st January 2006 are based on UK salary and benefits. Prior to that Mr Pentz’s emoluments were based on US basic salary adjusted for the cost of living differential in the UK including UK taxation. Associated with his localisation to UK salary and benefits and the purchase of a UK residence, Mr Pentz was provided with a package of transitional assistance including a housing allowance and relocation expenses commensurate with the company’s relocation policy.
   
(3) Mr Sheldrick is a non-executive director of GKN plc. His fees for the year were £54,000. This amount is excluded from the table above and retained by him.
   
(4) Non-executive fees (other than for the Chairman) were reviewed on 1st April 2004 for the period to 31st March 2007, and on 1st May 2007 for the period from 1st April 2007. The new fees are £45,000 per annum, with the fee for chairmanship of committees remaining at £5,000.
   
(5) Includes £5,000 per annum for chairmanship of the Management Development and Remuneration Committee.
   
(6) Includes £5,000 per annum for chairmanship of the Audit Committee.
   
(7) Excludes the emoluments of Mr Miles who retired as Chairman on 31st March 2006. His emoluments were £220,000, bringing the total to £461,000.
 
     
  Former Directors
During the year a payment of £8,000 was made to Mr Miles who retired as Chairman on 31st March 2006.

Directors’ Interests
The interests of the directors as at 31st March 2007 in the shares of the company according to the register required to be kept by section 325(1) of the Companies Act 1985 were:
 
     
 
1. Ordinary Shares
   
   
31st March
 
31st March
   
2007
 
2006
   

 

  Sir John Banham
8,000
  4,000
  N A P Carson
61,310
  50,919
  M B Dearden
2,000
  2,000
  P N Hawker
15,327
  7,966
  C D Mackay
12,500
  12,500
  D W Morgan
40,582
  36,257
  L C Pentz
18,526
  11,414
  J N Sheldrick
74,517
  63,321
  I C Strachan
1,000
  1,000
  A M Thomson
2,213
  2,165
  R J W Walvis
1,000
  1,000
   

 

 
     
 
  All of the above interests were beneficial. The executive directors are also deemed to be interested in shares held by two employee share ownership trusts (see note 31 on page 88).

Directors’ interests as at 31st May 2007 were unchanged from those listed above, other than that the Trustees of the Johnson Matthey Share Incentive Plan have purchased on behalf of Messrs Carson, Hawker, Morgan and Sheldrick a further 45 ordinary shares each and on behalf of Mr Pentz a further 48 ordinary shares.
   
2. Share Options
As at 31st March 2007, individual holdings under the company’s executive share option schemes were as set out below. Options are not granted to non-executive directors.
 
 
 
 
 
Date of
grant
Ordinary
shares under
option
Exercise
price
(pence)
Date from
which
exercisable (1)
Expiry
date
Total number of
ordinary shares
under option
 






  N A P Carson
14.7.98
15,964
524.0
14.7.01
14.7.08
   
22.7.99
18,035
585.5
22.7.02
22.7.09
   
18.7.01
19,391
1,083.0
18.7.04
18.7.11
   
17.7.02
28,901
865.0
17.7.05
17.7.12
   
17.7.03
33,407
898.0
17.7.06
17.7.13
   
21.7.04
75,678
892.0
21.7.07
21.7.14
20.7.05
77,102
1,070.0
20.7.08
20.7.15
   
26.7.06
71,378
1,282.0
26.7.09
26.7.16
339,856
   
(2006 268,478)
 






  P N Hawker
18.7.01
10,253
1,083.0
18.7.04
18.7.11
   
17.7.02
15,606
865.0
17.7.05
17.7.12
   
17.7.03
21,158
898.0
17.7.06
17.7.13
   
21.7.04
36,746
892.0
21.7.07
21.7.14
   
20.7.05
37,850
1,070.0
20.7.08
20.7.15
   
26.7.06
34,518
1,282.0
26.7.09
26.7.16
156,131
   
(2006 127,743)
 






  D W Morgan
18.7.01
18,098
1,083.0
18.7.04
18.7.11
   
17.7.02
25,433
865.0
17.7.05
17.7.12
   
17.7.03
26,726
898.0
17.7.06
17.7.13
   
21.7.04
44,397
892.0
21.7.07
21.7.14
   
20.7.05
39,252
1,070.0
20.7.08
20.7.15
   
26.7.06
35,104
1,282.0
26.7.09
26.7.16
189,010
   
(2006 153,906)
 






  L C Pentz
22.7.99
12,158
585.5
22.7.02
22.7.09
   
19.7.00
8,224
942.0
19.7.03
19.7.10
   
18.7.01
12,952
1,083.0
18.7.04
18.7.11
   
17.7.02
17,730
865.0
17.7.05
17.7.12
   
17.7.03
22,185
898.0
17.7.06
17.7.13
   
21.7.04
34,857
892.0
21.7.07
21.7.14
   
20.7.05
37,850
1,070.0
20.7.08
20.7.15
   
26.7.06
34,518
1,282.0
26.7.09
26.7.16
180,474
   
(2006 145,956)
 






  J N Sheldrick
18.7.01
25,854
1,083.0
18.7.04
18.7.11
   
17.7.02
34,682
865.0
17.7.05
17.7.12
   
17.7.03
36,191
898.0
17.7.06
17.7.13
   
21.7.04
58,861
892.0
21.7.07
21.7.14
   
20.7.05
52,570
1,070.0
20.7.08
20.7.15
   
26.7.06
46,804
1,282.0
26.7.09
26.7.16
254,962
   
(2006 208,158)
 






           
 
       
 
(1) subject to meeting the relevant performance targets.
 
     
  Between 1st April 2006 and 31st March 2007 the following options were exercised:  
     
 
Date of
grant
Date of
exercise
Options
exercised
Exercise
price
(pence)
Market price
on exercise
(pence)
 
 
 
 
 
P N Hawker
19.7.00
6.2.07
6,130
942.0
1,583.0
 
 
 
 
 
                   
 
 

Gains made on exercise of options by directors during the year totalled £39,293 (2006 £645,429).

The closing market price of the company’s shares at 30th March 2007 was 1,576 pence and the range during 2006/07 was 1,237 pence to 1,639 pence.

 
     
3. LTIP Allocations
Number of allocated shares:
   
 
 
 
As at
31st March
2006
Allocations
during the
year
Market price
at date
of allocation
(pence)
Shares
released
during
the year
Allocations
lapsed
during
the year
As at
31st March
2007
   
 
 
 
 
 
  N A P Carson 165,787   56,148   1,358.0   16,968   16,968   187,999
  P N Hawker 73,003   21,723   1,358.0   10,747   10,746   73,233
  D W Morgan 84,775   22,091   1,358.0   13,575   13,574   79,717
  L C Pentz 72,783   21,723   1,358.0   11,269   11,268   71,969
  J N Sheldrick 113,540   29,455   1,358.0   18,382   18,382   106,231
   
 
 
 
 
 
                         
 
 
  On 1st August 2006 the 2003 LTIP allocation was released to participants. The release of this allocation was subject to the achievement of performance targets which contained two components – relative TSR and absolute TSR. Click here for further details of the performance targets. The company’s TSR performance relative to the comparator group was below the 50th percentile, which qualified for a nil release of half the allocated shares. The company achieved absolute TSR growth of 66.9% during the performance period. This qualified for a full release of the other half of the allocated shares and resulted in the following gains:
   
 
 
 
Number of
shares released
Share price when
released (pence)
Gain
£
   
 
 
  N A P Carson
16,968
1,291.5
219,142
  P N Hawker
10,747
1,291.5
138,798
  D W Morgan
13,575
1,291.5
175,321
  L C Pentz
11,269
1,291.5
145,539
  J N Sheldrick
18,382
1,291.5
237,404
   
 
 
             
 
  Pensions
Pensions and life assurance benefits for the executive directors are provided through the company’s final salary occupational pension scheme for UK employees – the Johnson Matthey Employees Pension Scheme (JMEPS) – which is constituted under a separate Trust Deed. JMEPS is an exempt approved scheme under Chapter I of Part XIV of the Income & Corporation Taxes Act 1988. It is a registered scheme for the purposes of the Finance Act 2004.

On 6th April 2006 the Finance Act 2004 introduced changes to the taxation of benefits payable from registered UK pension schemes. Unless protected under transitional arrangements, retirement benefits that exceed a capital value – called the Life Time Allowance – will be subject to an additional tax charge. Any such tax charge arising out of membership of JMEPS will be paid by the trustees at the point of retirement and the member’s benefits will be reduced accordingly. Executive directors whose retirement benefits are valued in excess of the Life Time Allowance may withdraw from service in JMEPS and receive instead a supplemental payment of 25% of basic salary each year, which is taxable. Messrs Carson and Hawker withdrew from JMEPS and ceased paying member contributions on 31st March 2006. No pensionable service in JMEPS has been accrued by either director since that date. The increase in accrued pension in the tables below is attributable to the increase in basic salary.

The Finance Act 2004 also enables authorised schemes to remove the restriction imposed by the ‘earnings cap’ under the Finance Act No. 2, 1989. As a result, the accrued pensions for Messrs Morgan and Sheldrick for service from 6th April 2006 are calculated by reference to normal JMEPS rules and actual basic salary. Accrued pensions in respect of service prior to that date remain restricted by reference to the ‘earnings cap’ (see note 6 below).

From 1st April 2007, member contributions paid by executive directors to JMEPS will increase from 4% to 5% of pensionable pay (i.e. basic salary). There will be further increases to 6% and 7% on 1st April 2008 and 1st April 2009 respectively.

Disclosure of directors’ pension benefits has been made under the requirements of the United Kingdom Listing Authority Listing Rules and in accordance with the Directors’ Remuneration Report Regulations 2002. The information below sets out the disclosures under the two sets of requirements.
 
 
   
a. United Kingdom Listing Authority Listing Rules
 
     
 
   
Age at
31st March
2007
Years of
pensionable
service at
31st March
2007
Directors’
contributions
to JMEPS
in the
year (1)
£’000
Increase in
accrued
pension
during the
year
(net of
inflation) (2)
£’000 pa
Total
accrued
pension at
31st March
2007 (3)
£’000 pa
Total
accrued
pension at
31st March
2006
£’000 pa
Transfer
value of
increase
(less
directors’
contributions) (4)
£’000
   
 
 
 
 
 
 
  N A P Carson (5)
49
25
19
287
259
226
  P N Hawker (5)
53
20
7
138
127
101
  D W Morgan (6)
49
18
12
6
47
40
55
  L C Pentz (7)
51
22
11
3
46
42
90
  J N Sheldrick (6)
57
16
16
8
55
46
112
   
 
 
 
 
 
 
                             
 
     
 
b. Directors’ Remuneration Report Regulations 2002
 
     
 
 
Directors’
contributions
to JMEPS
in the year (1)
£’000
Increase in
accrued
pension
during the
year
£’000 pa
Total
accrued
pension at
31st March
2007 (3)
£’000 pa

Transfer
value of
accrued
pension at
31st March
2007 (4)
£’000
Transfer
value of
accrued
pension at
31st March
2006 (4)
£’000
Increase
in transfer
value
(net of
directors’
contributions)
£’000
   
 
 
 
 
 
  N A P Carson (5)
-
28
287
3,431
2,887
544
  P N Hawker (5)
-
11
138
1,954
1,707
247
  D W Morgan (6)
12
7
47
539
426
101
  L C Pentz (7)
11
4
46
411
311
89
  J N Sheldrick (6)
16
9
55
907
735
156
   
 
 
 
 
 
                         
 
 
Notes
(1) Members’ contributions were paid at the general scheme rate of 4% of pensionable pay (i.e. basic salary). This general rate will increase to 5% on 1st April 2007, with further increases to 6% and 7% on 1st April 2008 and 1st April 2009 respectively.
   
(2) The increase in accrued pension during the year excludes any increase for inflation.
   
(3) The entitlement shown under ‘Total accrued pension at 31st March 2007’ is the pension which would be paid annually on retirement, based on pensionable service to 31st March 2007, although pensionable service for Messrs Carson and Hawker ceased on 31st March 2006. The pension would, however, be subject to an actuarial reduction of 0.3% per month for each month that retirement precedes age 60.
   
(4) The transfer values have been calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note 11. No allowance has been made in the transfer values for any discretionary benefits that have been or may be awarded under JMEPS. The transfer values in the Directors’ Remuneration Report Regulations 2002 have been calculated at the start and the end of the year and, therefore, also take account of market movements.
   
(5) Mr Carson and Dr Hawker ceased to accrue pensionable service in JMEPS with effect from 31st March 2006. A cash payment in lieu of pension equal to 25% of basic salary has been made. This is taxable under the PAYE system and is included in the emoluments table.
   
(6) The JMEPS’ benefits and contributions for Messrs Morgan and Sheldrick in respect of pensionable service up to 5th April 2006 are restricted by reference to the ‘earnings cap’ imposed by the Finance Act No. 2, 1989. Between 1st April 2000 and 31st March 2006, contributions were paid to Funded Unapproved Retirement Benefit Schemes (FURBS) to provide retirement and death benefits in relation to basic salary in excess of the ‘earnings cap’. FURBS were not exempt approved under Chapter I of Part XIV of the Income & Corporation Taxes Act 1988 and so payments were also made to meet the tax liabilities in respect of these contributions. No FURBS payments have been made after 31st March 2006. Benefits and contributions in respect of service from 6th April 2006 have been provided by JMEPS in accordance with the normal scheme rules.
   
(7) Mr Pentz is a US citizen but became a member of JMEPS on 1st January 2006. Prior to that he was a member of the Johnson Matthey Inc. Salaried Employees Pension Plan (a non-contributory defined benefit arrangement) and a US savings plan (401k). He also has benefits in a Senior Executive Retirement Plan. The pension values reported above are the aggregate for his separate membership of the UK and US pension schemes and the Senior Executive Retirement Plan. US entitlements have been converted to sterling by reference to exchange rates on 31st March 2006 and 31st March 2007. Mr Pentz’s US pension was fixed on 31st December 2005. The sterling equivalent of it has fallen over the year as a result of exchange rate movements and this reduction is reflected in the ‘Increase in accrued pension during the year’. The ‘Transfer value of increase’ is the full value of the increase in his UK pension.
 
     
  Johnson Matthey Total Shareholder Return and FTSE 100 rebased to 100
The following graph charts total cumulative shareholder return of the company for the five year period from 31st March 2002 to 31st March 2007 against the FTSE 100 as the most appropriate comparator group, rebased to 100 at 1st April 2002. Johnson Matthey joined the FTSE 100 on 12th June 2002.
 
     
  chart  
     
 

The Remuneration Report was approved by the Board of Directors on 5th June 2007 and signed on its behalf by:

Charles Mackay Signature

Charles Mackay
Chairman of the Management Development and Remuneration Committee

 
     
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