Remuneration Committee

The Remuneration Report has been prepared in line with the principles and requirements set out in The Combined Code. The Remuneration Committee is appointed by and reports to the main board.

The current members of the Remuneration Committee are:

• Hugh Duberly (Chairman)
• Jenefer Greenwood, non–executive board member
• Martin Moore, non–executive board member

The meetings are held twice annually. The following executives ordinarily attend: the Chief Executive, Director of Corporate Operations and Director of Finance & Information Systems, but absent themselves if matters relating to their individual reward packages are discussed. The secretary to the remuneration committee is Valerie Burns, Head of Human Resources.

Terms of Reference:

Its primary purpose is to ensure scrutiny and oversight of the reward packages for senior managers, ensuring that rewards are appropriate to recruiting and retaining the skills and experience necessary to take the business forward. During the year the committee met twice and considered all matters within the committee's terms of reference.

The duties of the committee include:

• retaining oversight of the process whereby senior management reward systems and packages are agreed;
• fair and transparent remuneration of senior management at The Crown Estate;
• ensure that senior management remuneration is sufficient to attract and retain the skills and experience necessary to take the business forward;
• express its view in relation to total compensation for the Chief Executive;
• scrutinise, and hold The Crown Estate responsible for any procedures where appropriate remuneration for senior managers is formulated and agreed;
• sign–off proposed reward strategies for senior managers;
• satisfy itself that sufficient and appropriate performance management arrangements are in place;
• consider all performance–related proposals in respect of individuals as put forward by the Chief Executive; and
• ensure that decisions are equitable and taken with due diligence.

Remuneration and pension entitlements of the board were as follows:

Board	2006/07 Total remuneration including bonus £	2005/06 Total remuneration including bonus £	Real increase in pension at 60 £	Total accrued pension at 60 at 31 March 2007 £	Cash equivalent transfer value as at 31 March 2006 £	Cash equivalent transfer value as at 31 March 2007 £	Real increase in cash equivalent transfer value £
Ian Grant – Chairman	48,544	47,866	–	–	–	–	–
Roger Bright – Chief Executive	257,439	253,450	1,041	76,836	1,477,669	1,645,197	164,714
Christopher Bartram (appointed 1 January 2007)	4,727	–	–	–	–	–	–
Sir Donald Curry	18,798	18,536	–	–	–	–	–
Hugh Duberly	18,798	18,536	–	–	–	–	–
Jenefer Greenwood	18,798	18,536	–	–	–	–	–
Martin Moore	18,798	18,536	–		–	–	–
Dinah Nichols	18,798	18,536	–	–	–	–	–
Ronald Spinney	14,072	18,536	–	–	–	–	–

This information is covered by the Comptroller and Auditor General's audit opinion. The Chairman and non–executive members of the Board are initially appointed for terms of four years with the prospect of renewal for a further term. Roger Bright, the Chief Executive, is also appointed on a four year contract with a notice period of six months and which expires in September 2009.

Roger Bright the Chief Executive is entitled to receive a non–pensionable annual bonus which is geared to specific targets and is approved by the Treasury. During the year he received a bonus of £71,706 (£68,450 in 2005/06).

The salary and pension entitlements of the members of the management board were:

Management Board	2006/07 Total remuneration £'000	2005/06 Total remuneration £'000	Real increase in pension at 60 £	Total accrued pension at 60 at 31 March 2007 £	Cash equivalent transfer value as at 31 March 2006 £	Cash equivalent transfer value as at 31 Mar ch 2007 £	Real increase in cash equivalent transfer value £
Christopher Bourchier	120–125	100–105	2,493	33,822	426,026	602,245	174,751
Giles Clarke	150–155	120–125	1,837	10,632	93,483	113,527	16,243
John Ford (retired March 2007)	85–90	85–90	2,692	39,970	635,484	1,050,117	413,397
Martin Gravestock	115–120	100–105	2,967	45,963	838,756	926,628	86,404
Robert Hastings	115–120	15–20	1,629	1,894	3,185	22,980	16,370
Vivienne King (appointed April 2006)	105–110	85–90	3,016	11,753	112,613	194,368	80,615
John Lelliott	115–120	105–110	1,631	46,516	724,262	1,027,361	301,631

This information is covered by the Comptroller and Auditor General's audit opinion. Members of the management board are appointed on permanent contracts which provide for a notice period of three months. Their remuneration is determined by reference to individual job responsibilities and market data and is reviewed periodically.

Total remuneration includes salary, performance bonuses, flexible benefit and leave converted into salary. In addition to salary, non–pensionable bonuses are payable to members of the management board. Members of the management board, excluding the Chief Executive, are entitled to individual levels of non–pensionable discretionary bonus up to 20% of their salary which is performance related and is approved by the remuneration committee. Members of the management board, excluding the Chief Executive, also receive a non–pensionable flexible benefit of 6% of base pay which is available to all office based employees.

Christopher Bourchier, as Director of Rural Estates, received a car mileage allowance of £nil (£5,500 in 2005/06).

Pensions

Two defined benefit pension schemes operate within The Crown Estate providing retirement and related benefits to all eligible employees based on individual final emoluments.

The Crown Estate board members with the exception of Roger Bright, Chief Executive, are non–executive appointments and are not members of either The Crown Estate Pension Scheme or the Principal Civil Service Pension Scheme.

Pension benefits are provided to Roger Bright, Chief Executive and members of the management board through the Principal Civil Service Pension Scheme or The Crown Estate Pension Scheme. Roger Bright and Martin Gravestock are members of the Principal Civil Service Pension Classic Scheme, Giles Clarke and Robert Hastings are members of the Principal Civil Service Pension Premium Scheme. The remaining members of the management board are ordinary members of The Crown Estate Pension Scheme. Roger Bright's bonus is non–pensionable.

Both schemes provide benefits on a 'final salary' basis at a normal retirement age of 60. Benefits accrue at the rate of 1/80 of pensionable salary for each year of service except for the Principal Civil Service Pension Premium Scheme which is 1/60. In addition a lump sum equivalent to three years' pension is payable on retirement. Members pay contributions of 1½% of pensionable earnings with the exception of the members of the Principal Civil Service Pension Premium Scheme which is 3.5%. Pensions payment increase is in line with the retail price index. On death, pensions are payable to the surviving spouse at a rate of half the member's pension. On death in service, a lump sum benefit of four times pensionable pay is payable to Crown Estate Pension Scheme members. This benefit has also been extended to Roger Bright, Martin Gravestock, Giles Clarke and Robert Hastings. Both schemes provide a service enhancement in computing the spouse's pension. The enhancement depends on length of service and cannot exceed 10 years. Medical retirement is possible in the event of serious ill–health. In this case pensions are brought into payment immediately without actuarial reduction and with service enhanced as for widow(er) pensions.

Roger Bright
Chief Executive

18 June 2007