58Glanbia plc Annual Report 2011Directors' Report: GovernanceCommittee reportswww.glanbia.com> each of the EPS, TSR and investment measure elements, will represent one-third of the maximum vesting level, unless otherwise determined by the Remuneration Committee; and> the Remuneration Committee shall have the discretion to change the performance criteria where deemed appropriate. Any changes to these performance conditions will be disclosed in the Remuneration Committee Report which will be subject to a general shareholder non-binding advisory vote.Return on capital employed is calculated as Group Earnings before Interest, Taxation and Amortisation ('EBITA') plus the Group's share of results of Joint Ventures & Associates after interest and tax, over capital employed. Capital employed is calculated as the Group's non-current assets plus working capital. 2002 Long Term Incentive Plan.Options over 270,000 shares were granted in 2011 under the 2002 Long Term Incentive Plan. No share options under this scheme have been granted to Executive Directors since the adoption of the 2008 LTIP. The 2002 Long Term Incentive Plan will expire in May 2012.Exercisability of options under the 2002 Long Term Incentive PlanIn relation to the 2009 grant which was based on EPS performance in the three year period 2009-2011, the Remuneration Committee will assess the performance criteria of the 2002 Long Term Incentive Plan during 2012.PensionAll Executive Directors are members of a Glanbia defined benefit pension scheme. Summary of Pay MixA significant proportion of the Executive Directors' total remuneration package is variable. The variable element of Executive Director pay has increased following the 2011 remuneration policy review. The balance between fixed (Base Salary) and variable (Annual and Long Term Incentives) elements of remuneration varies depending on performance. The charts below show the current mix between fixed and variable pay for Executive Directors and the proposed mix for 2012 following the recent remuneration policy review: Share usage for LTIPs and dilutionBoth the 2008 LTIP and 2002 Long Term Incentive Plan place a limit on the number of new shares that may be issued under the Plans so as to ensure that the minimum shareholding of Glanbia Co-operative Society Limited in the Company cannot be diluted below 54% of the fully diluted issued share capital.The Company intends to use existing shares to satisfy future share vesting under the 2008 LTIP and an employee benefit trust was established to manage the purchase of these shares. At 31 December 2011, 740,576 ordinary shares were held by the employee benefit trust.The Company currently intends to issue new shares to satisfy future exercise of share options granted under the 2002 Long Term Incentive Plan. The table below sets out the dilutive effect on the share capital if all outstanding options granted under the 2002 Long Term Incentive Plan capable of being exercised were exercised:Total issued share capital:294,532,684Outstanding share options under 2002 Long Term Incentive Plan capable of being exercised1,233,000Outstanding share awards under 2002 Long Term Incentive Plan32,900Enlarged issued share capital 295,798,584Shareholding guidelinesThe new share ownership guidelines are designed to help maintain long-term commitment and business understanding, offering the opportunity to benefit from any growth in shareholder value - thereby aligning Executive Directors' interests with those of shareholders.CurrentFixed pay 47% Variable pay 53% ProposedFixed pay 39% Variable pay 61%

Glanbia plc Annual Report 201159Directors' Report: GovernanceCommittee reportswww.glanbia.comWith effect from 2012, the Group Managing Director is encouraged to build up a holding in shares in the Company at least equal in value to 200% of Base Salary, with ownership built up over a maximum period of five years. The guideline for other Executive Directors is 100% of Base Salary and, for other senior executives, 75% of Base Salary - built up over the same maximum period.As at 31 December 2011, the Executive Directors' share ownership is disclosed in Table A on page 60. Executive Directors' service contractsNo Executive Director has a service contract with a notice period in excess of 12 months or with provisions for pre-determined compensation on termination which exceeds 12 months salary and benefits-in-kind.There have been no payments made during the year in relation to compensation for loss of office.Policy on external board appointmentsThe long-standing policy of allowing Executive Directors to hold external Non-Executive directorships with the prior approval of the Remuneration Committee will continue. The Remuneration Committee considers that external directorships provide the Group's Executive Directors with valuable experience that is of benefit to Glanbia. It is also considered appropriate for Glanbia to contribute to the pool of Non-Executive expertise available for the benefit of the wider business community. The Remuneration Committee believes that it is reasonable for the individual Executive Director to retain any fees received from such appointments given the additional personal responsibility that this entails. Such fees retained by Executive Directors in 2011 were as follows: John Moloney: The Irish Dairy Board Co-operative Limited: ?17,500 and DCC plc: ?68,000.The Group Chairman and Non-Executive DirectorsLiam Herlihy was appointed Group Chairman on 28 May 2008. His appointment is subject to annual re-appointment by the shareholders at the AGM of the Company. His appointment as Group Chairman will automatically terminate if he ceases to be a Director of the Company or a Director of Glanbia Co-operative Society Limited. The Chairman's fee is set by the Remuneration Committee and is ?88,000 per annum. This fee reflects the level of commitment and responsibility of the role.The Non-Executive Directors do not have service contracts, but have letters of appointment detailing the basis of their appointment. The terms and conditions of appointment of Non-Executive Directors are available for inspection at the Company's registered office during normal business hours and at the AGM of the Company.The Non-Executive Directors do not have periods of notice and the Group has no obligation to pay compensation when their appointment terminates. They are subject to annual re-election at the AGM of the Company.Non-Executive Directors' fees are set by the Remuneration Committee and the details are outlined on page 64.Details of the dates of appointment of each Non-Executive Director who served during the year are provided on page 68. Review of Committee performanceThe Board and Committee assessed its performance, covering terms of reference, composition, procedures, contribution and effectiveness. As a result of that assessment, the Committee is satisfied that it is functioning effectively and it has met its terms of reference. MemberAppointedNumber of full Years on the CommitteeMeeting attendanceJ Liston10 June 20029 8/8L Herlihy8 June 2001108/8Mn Keane29 June 201018/8H Corbally26 July 2011Less than 1 year4/4V Quinlan 9 June 2005*52/2J Callaghan13 Jan 1998148/8P Haran9 June 200568/8 * Retired 26 May 20112011 Committee meeting attendanceAttendance at scheduled Committee meetings during the year ended 31 December 2011The information in Tables A, B and C are covered by the Independent auditors' report on pages 80 and 81. The Tables give details of the Directors' remuneration and interests in shares in Glanbia plc and Glanbia Co-operative Society Limited held by Directors, Secretary and their connected persons for those individuals who were Directors and Secretary of the Company as at 31 December 2011. There have been no changes in the interests of the Directors and Secretary listed in the Tables between 1 January 2012 and 28 February 2012. The market price of the ordinary shares as at 31 December 2011 was ?4.63 and the range during the year was ?3.55 to ?5.02. The average price for the year was ?4.42.C. Information subject to audit