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iMProviNG LiveS...
Hikma PHarmaceuticals Plc
annual rePort 2012

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who we are...

Hikma PHarmaceuticals Plc

Since hikma was founded, it has rapidly
grown to become a successful multinational
pharmaceutical group with operations across
the Middle east and North africa, the United
States and europe. our business has a broad
product portfolio, selling a wide range of branded
and non-branded generics as well as innovative,
patented products under license. our robust
and diversified business model has quality at
the heart of everything we do and will enable us
to maintain our track record of strong growth.

For more inFormation, visit our website

www.hikMa.coM

Page 84

82 HIkMA PHArMACEUTICALS PLC / ANNUAL rEPOrT 2012

OPEN fOr DISCUSSION

Call +44 20 7399 2760
or E-mail: [email protected]

dear shareholder
In the last year, we completed a thorough review of Hikma’s executive
remuneration arrangements with a focus on competitive remuneration
linked to performance. we also sought to improve transparency and
to provide a clear report on past pay and future policy.

we decided to move this report in line with the Department for
Business, Innovation and Skills regulations one year early. we developed
and implemented clawback arrangements for all bonus and executive
share schemes as well as share ownership requirements for Directors
and senior management. we also reviewed the performance of our
remuneration adviser and conducted a tender exercise.

This follows the significant enhancements we implemented last
year which enabled us to be nominated for a transparency award.

Shareholders will recall that we froze salaries for Executive Directors
and senior management in 2009 to 2011 and made an increase in
2012 which was linked to salary rises across the MENA region. At the
same time we have continued to review salaries for operational
employees to remain competitive and reflect the pressure that exists
in a number of our markets. we have established a new bonus scheme
throughout the group with enhanced linkage to personal and group
objectives and underlying group and business unit performance.

The Committee has spent a significant amount of time reviewing
potential adjustments to enhance the performance linkage of the
existing cash bonus structure. whilst we are not proposing to
change the basis of the schemes, we aim to develop our process
for linking awards and performance. This builds on last year’s
implementation of additional financial performance targets for
our long-term incentive plan.

1 This report has been prepared on behalf of the Board in accordance with regulation 11 and Schedule 8
of the Large and Medium-Sized Companies and groups (Accounts and reports) regulations 2008 (the
“regulations”). The report also meets the relevant requirements of the Listing rules of the financial Services
Authority and describes how the Board has applied the principles and complied with the provisions of the
Uk Corporate governance Code and Markets law relating to Directors’ remuneration. As required by the
regulations, an advisory resolution to approve this report will be proposed at the Company’s Annual general
Meeting on 16 May 2013. The Auditors are required to report on the certain “auditable” sections of this
report and to state whether, in their opinion, that these sections of the report have been properly prepared in
accordance with the Companies Act 2006 and the regulations. The auditable sections have been identified
in this report.

Letter from the Chairman

4.3 remUneration reports

remUneration

4.3 rEMUNErATION rEPOrTS

82 / governance

88 / Policy

93 / Executive Implementation

102 / Total Compensation

Building Public Trust Awards 2012
highly commended
executive remuneration reporting
in the ftse 250

Page 85

HIKMA PHARMACEUTICALS PLC / ANNUAL REPORT 2012 83

we have fully engaged with several of the consultations of BIS and
other governance bodies.

There have been several significant worldwide events during the
year and the continuation of the impacts of the Arab Spring and the
Eurozone crisis. with Hikma’s focus in the MENA region and significant
operations in the EU, the Committee has been impressed with
management’s ability to perform in a turbulent time.

As an organisation Hikma is committed to clear and open
communication. I have always been available to shareholders to raise
matters directly and I remain open to discussion with shareholders
should there be any concerns that they wish to raise directly.

why is the remuneration structure appropriate for hikma?
we continue to believe that our remuneration structure is appropriate
for Hikma. we have maintained our policy from last year setting
remuneration at the median to upper quartile compared to our
comparator group. we have a regular programme of meetings with
shareholders regarding all aspects of Hikma. During the year and to
date, shareholders have not raised any matters of concern. Should we
significantly change policy or introduce new share incentive
arrangements, we will consult shareholders first.

In respect of executive remuneration there have been no departures
from normal policy or use of special discretion during the year.


michael ashton
Chairman of the Remuneration Committee

Letter from the Chairman

highLights of 2012

3 reviewed and established remuneration policies in respect of
clawback provisions, minimum shareholdings requirements and
joiners & leavers’ remuneration provisions

3 Nominated for an ifs ProShare award for the most effective
communication of an employee share plan

3 Highly recommended for the Building Trust Award
for best remuneration Disclosure

3 reviewed and developed the usage of kPIs, the bonus plan and
share scheme usage across the group

3 reviewed the performance and competitiveness
of our remuneration Advisers

3 Changed structure and lay out of the report

3 Developed the linkage between incentive compensation and
performance across the group

3 responded to the Department for Business Innovation and Skills
consultation on Executive remuneration

3 reviewed and revised the comparator group composition to
enhance the linkage with our comparator criteria

3 Benchmarked executive director, non-executive and senior
management compensation

3 Acted as a sounding board for significant projects undertaken
by the Human resources department

membership and attendance
The remuneration Committee consists of four Independent
Non-Executive Directors, with an Independent Non-Executive Director
holding the chairmanship of the Committee.

All members of the Committee have held positions at the highest
levels in multi-national organisations and hence have experienced working
life at all levels. They have spent a significant proportion of their careers
leading teams and in executive management. They understand the need
to incentivise top management appropriately, whilst ensuring that rewards
are fair throughout all levels of Hikma’s business.

MEMBErS MEETINgS ATTENDANCE

michael ashton (Chairman) 100%
sir david rowe-ham 100%
Breffni Byrne 100%
ronald goode 100%
total meetings 7

Page 167

Hikma PHarmaceuticals Plc / annual rePort 2012 170

PriNciPaL GroUP coMPaNieS

Produced and designed by radley yeldar www.ry.com

this report is printed on “olin” paper. this paper is made from virgin wood fibre from well-managed
forest independently certified according to the rules of the Forest stewardship council (Fsc). it is manufactured
at a mill that is certified to iso14001 and emas environmental standards. the mill uses pulps that are totally
chlorine free (tcF), and some pulp is bleached using an elemental chlorine fee (ecF) process.
the inks in printing this report are all vegetable-based.

Printed at Pureprint group, iso14001, Fsc certified and carbonneutral®

Hikma PHarmaceuticals Plc

registered in england and wales number 5557934

registered office:
13 Hanover square
london w1s 1Hw
uk

telephone: +44 (0)20 7399 2760
Facsimile: +44 (0)20 7399 2761
e-mail: [email protected]

Hikma PHarmaceuticals limited

P.o. box 182400
11118 amman
Jordan

telephone: +962 6 5802900
Facsimile: +962 6 5827102

west-ward PHarmaceutical corPoration

465 industrial way west
eatontown
new Jersey 07724
usa

telephone: +1 732 542 1191
Facsimile: +1 732 542 6150



Hikma Farmacêutica s.a.

estrada rio da mo no. 8
8a, 8b – Fervença
2705 – 906 terrugem snt
Portugal

telephone: +351 21 9608410
Facsimile: +351 21 9615102

adviSerS

auditors
deloitte llP
2 new street square
london ec4a 3bZ
uk

Brokers
citigroup global markets
limited
canada square
london e14 5lb
uk

bank of america merrill lynch
2 king edward street
london ec1a 1HQ
uk

Legal advisers
ashurst
broadwalk House
5 appold street
london ec2a 2Ha
uk

Public relations
Fti consulting
Holborn gate
26 southampton buildings
london wc2a 1Pb
uk

Page 168

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Hikma PHarmaceuticals Plc
13 Hanover sQuare, london w1s 1Hw, uk

WWW.HIKMA.COM

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