Under Section 42C of the Electricity Act 1989, National Grid Electricity Transmission plc is required to give a statement disclosing whether the remuneration of the directors of the company is linked to service standards and, if so, the nature of the linkage.

Directors’ remuneration consists of:

• Basic salary
• Performance related Annual Performance Plan payment
• Long term incentives
• Pension and other benefits.

Whilst there is no direct link to performance against service standards with basic salary, long term incentives, pension and other benefits, the performance against service standards is reviewed before Annual Performance Plan payments are decided.

2010/2011

For the year 1 April 2010 to 31 March 2011, the directors of National Grid Electricity Transmission plc were as follows.  Where an individual served as a director for only part of the year, the details are shown accordingly:

Malcolm Cooper
Mark Fairbairn (resigned as NGET Director on 25 March 2011)
Stuart Humphreys
Paul Whittaker
Nick Winser

For the year 1 April 2010 – 31 March 2011, the Remuneration Committee reserved the right to adjust the Annual Performance Plan payments of executive directors of National Grid plc, in the light of any significant deterioration in the high levels of service standards set by National Grid Electricity Transmission plc.  These service standards are MWh lost and loss of supply incidents, Safety, Health and Environmental (SHE) standards such as attributable injuries and incidents involving  members of the public, employee lost time injury rates, % of work days lost and serious environmental incidents (prosecutions and fines). Directors of National Grid Electricity Transmission plc during the year who are executive directors of National Grid plc were Mark Fairbairn and Nick Winser. This mechanism took the form of an override depending on the nature and extent of any failures to maintain standards in respect of system security and availability.

No adjustments to Annual Performance Plan payments of executive directors of National Grid plc were considered necessary by the Remuneration Committee for the performance achieved by National Grid Electricity Transmission plc during that year. Consequently, no adjustments were made to the Annual Performance Plan payments of directors of National Grid Electricity Transmission plc who were not executive directors of National Grid plc.

2011/2012

Directors for the current year are as follows:

Malcolm Cooper
Stuart Humphreys
Paul Whittaker
Nick Winser

For the year, 1 April 2011 – 31 March 2012, the Remuneration Committee will review the service standards performance achieved, reserving the right to make adjustments to the Annual Performance Plan payments of the executive directors of National Grid plc who are also directors of National Grid Electricity Transmission plc.  The executive director is Nick Winser. Adjustments to the Annual Performance Plan payment of Malcolm Cooper, Stuart Humphreys and Paul Whittaker will be considered in the light of the Remuneration Committee’s decisions.
 
In addition, Nick Winser, the director with operational accountability for system reliability and safety, has overriding personal objectives relating to MWh lost and loss of supply incidents.