Under Section 33F of the Gas Act 1986, National Grid Gas 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 Gas 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 NGG Director on 25 March 2011)
Stuart Humphreys
Paul Whittaker
Adam Wiltshire
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 the executive directors of National Grid plc, in the light of any significant departures from service standards set by National Grid Gas plc.  These service standards are 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 Gas plc during the year, who are executive directors of National Grid plc, were Mark Fairbairn and Nick Winser.  No such adjustments were made.

The Annual Performance Plan arrangements of Malcolm Cooper, Stuart Humphreys, Paul Whittaker and Adam Wiltshire were also subject to the Service Standards of National Grid Gas plc in respect of Uncontrolled Emergencies, Transportation Standards, Connection Standards, emergency call handling and emergency response to gas escapes.   Annual Performance Plan payments are subject to reduction in the light of performance against these standards.  In light of overall performance against all of these standards, no adjustments were made to Annual Performance Plan payments.

2011/2012

Directors for the current year are as follows:

Malcolm Cooper
Stuart Humphreys
Paul Whittaker
Adam Wiltshire
Nick Winser
John Pettigrew (appointed as a Director of NGG with effect from 1 April 2011)

For the year, 1 April 2011 to 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 Gas plc.  They are Nick Winser. Adjustments to the Annual Performance Plan payments of other directors of National Grid Gas plc will be considered in the light of the Remuneration Committee’s decisions.

In addition, Nick Winser, who has executive accountability for system reliability and safety, also has overriding personal objectives relating to service standards.