OREANDA-NEWS. November 19, 2014. BG Group plc (LSE: BG.L) published a circular which includes a notice convening a General Meeting of shareholders to approve a conditional award of shares to prospective Chief Executive, Helge Lund. The General Meeting will be held in Reading, Berkshire at 2pm on 15 December 2014.

Following an extensive global search, Mr Lund was last month appointed Chief Executive and an Executive Director of BG Group, with effect from 2 March 2015.

BG Group's Board has approved a competitive remuneration package for Mr Lund, including a conditional award of shares with a face value of ?12 million at date of grant, to be earned over five years and paid over seven years, subject to personal performance criteria.

In recent weeks the Company has consulted extensively with shareholders about Mr Lund joining BG Group and the proposed remuneration package. Shareholders have overwhelmingly welcomed the appointment, supporting the view that Mr Lund has the necessary skills and experience to lead BG Group.

The Board appreciates the willingness of shareholders to engage on the remuneration package proposed for Mr Lund. Taking into account feedback received, the Board has provided additional detail on the package and strengthened the link between Mr Lund's remuneration and the creation of shareholder value over the long term.

In particular, Mr Lund has indicated his intention to hold for the duration of his employment with BG Group shares that may vest under both the conditional share award and through the Company's annual long-term incentive plan (LTIP), or any shares which are otherwise acquired (net of such number of shares as may need to be sold to cover tax or social security arising on vesting).

Additionally, the circular sent to shareholders describes a framework of factors that will be used to assess Mr Lund's personal performance.

The Board is committed to setting and beginning to measure these factors early in Mr Lund's tenure. Vesting of shares will be subject to Mr Lund's performance in defined areas, including:

the formulation and implementation of the Group's long-term strategy;

the establishment and achievement of appropriate metrics in connection with the strategy;
the establishment and achievement of objectives relating to health, safety, security and the environment (HSSE), sustainability, leadership and organisational development, values and culture; and

the development of a detailed succession plan for senior executive roles, including long-term plans for the role of Chief Executive.

BG Group's Remuneration Report will include detailed disclosure on the outcome of Mr Lund's annual performance review, and how the Remuneration Committee used the assessment to determine the number of shares he receives under the conditional award. If the performance condition is not met, the number of shares vesting will be reduced (including to nil), at the discretion of the Remuneration Committee.

The Board believes that the package is structured in a way which will drive excellent business and financial performance across the Group and promote the long-term success of the Company. Approximately 80% of Mr Lund's proposed annual remuneration package is subject to Company and personal performance conditions.

The circular includes the Board's unanimous recommendation that shareholders vote in favour of the conditional share award. This recommendation reflects the Board's conviction that Mr Lund is ideally suited to lead BG Group given his strong track record, skills and experience as a leading oil and gas industry Chief Executive.

Results of the poll on the conditional award of shares to Mr Lund will be announced as soon as practicable and will appear on the Company's website.

Assuming Mr Lund joins BG Group as planned on 2 March 2015, Andrew Gould will step back to his role as Non-Executive Chairman of BG Group. In line with the Remuneration Committee's decision, Mr Gould has agreed he will not receive additional fees for acting in an expanded role as interim Executive Chairman since April 2014.

Changes to Long-Term Incentive Plan (LTIP)
Following prior consultation with shareholders, the Board has also taken the opportunity to make changes to BG Group's LTIP. In particular, the Board has decided to reduce the level of vesting at threshold Company performance from 25% to 15% (which reduces the threshold vesting level from 150% to 90% of base salary for the Chief Executive) and to extend the application of the plan's two-year holding period to 100% of net vested shares.

In addition, the Company is proposing to expand its single LTIP metric, currently based on relative total shareholder return, to a basket including cash flow and capital efficiency measures. Further details are set out in the circular. The Company intends to consult further with shareholders on the LTIP metrics ahead of the annual LTIP grant in September 2015.