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Report of the Remuneration Committee

Non-executive directors

Policy

In relation to the Chairman, the Company’s policy is that the Chairman should be remunerated in line with the market rate reflecting his time commitment to the Group. In relation to non-executive directors, the Company’s policy is that their remuneration should be sufficient to attract and retain world-class non-executive directors. The Chairman and the non-executive directors do not receive performance-related pay.

Chairman’s and non-executive directors’ fees

The Remuneration Committee determines the Chairman’s fee. Following a review by the Committee, it was set at £350,000 in July 2007, taking into account the level of fees payable in similar companies and recognising his above average time commitment. The executive directors, on the recommendation of the Chairman, determine fees for the non-executive directors. For the year in question, the fees (which were fixed in October 2006) were £40,000 per annum, with the chairmen of the Audit, Remuneration and Safety Review Committees and the senior independent non-executive director each receiving £10,000 per annum in addition to these fees. The level of fees for non-executive directors was reviewed during the year. However, no change was proposed. No other fees are paid for attendance at Board committees. The Chairman and the non-executive directors’ fees are not pensionable. They are, however, eligible for non-contractual travel concessions.

Service agreements

The dates of the Chairman’s and current non-executive directors’ appointments are as follows:

Non-executive Date of appointment Date of election / last re-election Expiry date
Martin Broughton May 12, 2000 July 18, 2006 2009
Maarten van den Bergh July 1, 2002 July 15, 2008 2011
Baroness Kingsmill November 1, 2004 July 15, 2008 2011
Jim Lawrence November 1, 2006 July 18, 2007 2010
Chumpol NaLamlieng November 1, 2005 July 18, 2006 2009
Dr Martin Read May 12, 2000 July 18, 2006 2009
Alison Reed December 1, 2003 July 18, 2007 2010
Ken Smart July 19, 2005 July 15, 2008 2011
Baroness Symons July 19, 2005 July 15, 2008 2011

Except where appointed at a general meeting, directors stand for election by shareholders at the first annual general meeting following appointment, and stand for re-election every three years thereafter, under Article 94. Either party can terminate on one month’s written notice. Neither the Chairman nor any of the non-executive directors has any right to compensation on the early termination of their appointment. Copies of the letters of engagement for the Chairman and the non-executive directors are available for inspection on the Company’s investor relations website.

Performance graph

The graph shows the total shareholder return (with dividends reinvested where applicable) for each of the last five financial years of a holding of the Company’s shares against a hypothetical holding of shares in the FTSE 100.

The FTSE 100 was selected because it is a broad equity index of which the Company is a constituent.

Line chart of performance value £

This graph shows the value, by March 31, 2009, of £100 invested in British Airways Plc on March 31, 2004, compared with the value of £100 invested in the FTSE 100 Index. The other points plotted are the values at intervening financial year ends.

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