DIRECTORS’ REMUNERATION IN RESPECT OF SERVICE STANDARDS

2007/2008 AND 2008/2009

NATIONAL GRID GAS plc

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 bonus

·        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 bonuses are decided.

2007/2008

For the year 1 April 2007 to 31 March 2008, 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:

Andrew Chapman (appointed 27 June 2007)

Malcolm Cooper (appointed 27 June 2007)

Mark Fairbairn

Steve Holliday (resigned 27 June 2007)

Steve Lucas (resigned 27 June 2007)

Chris Murray (resigned 27 June 2007)

Nick Winser

Paul Whittaker (appointed 27 June 2007)

Adam Wiltshire

For the year 1 April 2007 – 31 March 2008 the Remuneration Committee reserved the right to adjust the annual bonuses of the executive directors of National Grid plc, in the light of any significant departures from service standards set by National Grid Gas plc.  Directors of National Grid Gas plc during the year, who are executive directors of National Grid plc, were Steve Holliday, Steve Lucas, Nick Winser and Mark Fairbairn.  No such adjustments were made.

The bonus arrangements of Andrew Chapman, Malcolm Cooper, Chris Murray, Paul Whittaker and Adam Wiltshire were also subject to the Service Standards of National Grid Gas plc in respect of Uncontrolled Emergencies, Transportation Standards and Connection Standards.  Bonuses are subject to reduction in the light of performance against these standards.  In light of satisfactory performance against these standards, no adjustments were made to bonuses paid.

2008/2009

Directors for the current year are as follows:

Andrew Chapman

Malcolm Cooper

Mark Fairbairn

Nick Winser

Paul Whittaker

Adam Wiltshire

For the year, 1 April 2008 to 31 March 2009, the Remuneration Committee will review the service standards performance achieved, reserving the right to make adjustments to the bonuses of the executive directors of National Grid plc who are also directors of National Grid Gas plc.  They are Nick Winser and Mark Fairbairn. Adjustments to the bonuses of other directors of National Grid Gas plc will be considered in the light of the Remuneration Committee’s decisions.

In addition, Mark Fairbairn, who has direct operational accountability for system reliability and safety, also has overriding personal objectives relating to service standards.