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Key elements of short- and long-term remuneration

  Objective Participation Performance period Conditions Change of Control
Short term          
Base salary1 To maintain package competitiveness at all levels within the Group. All employees. n/a Salary levels are determined by taking a number of relevant factors into account, including individual and business unit performance, level of experience, scope of responsibility and the competitiveness of total remuneration. n/a
Cash bonus To incentivise delivery of value at all levels within the Group. Approximately 10% of employees are eligible to receive a performance bonus. 1 year Achievement of challenging performance goals (financial and non-financial) at the individual and business unit level. Not applicable in relation to the cash bonuses of executive directors.
Performance share awards2 To incentivise delivery of value and to align with interests of share owners. Key operating company executives. 1 year Achievement of challenging performance goals (financial and non-financial) at operating company level. Further two-year retention period. See note for Restricted Stock Plan.
Executive share awards2 To incentivise delivery of value and to align with interests of share owners. Key parent company executives and executive directors. 1 year Achievement of challenging individual annual bonus objectives. Further two-year retention period. See note for Restricted Stock Plan.
Long term
Worldwide Ownership Plan3 To develop a stronger ownership culture. Employees with at least two years' employment. Not offered to those participating in other share programs or to executive directors. n/a 3-year vesting period Options may be exercised within one month (or a longer period if the Compensation Committee permits) of the Compensation Committee's notification of the change of control. The number of shares or ADRs is pro-rated down in accordance with the change of control date. The Compensation Committee may determine that outstanding awards are unaffected by the change of control.
Renewed LEAP To incentivise long-term performance by comparing WPP's TSR4 against the TSR of key comparators and to maximise alignment with share owner interests through a high level of personal financial commitment. Participation offered only to those key executives (currently no more than 20 people) whose contributions transcend their day-to-day role, including executive directors. 5 years Relative TSR performance against a group of key communication services comparator companies, subject to a fairness review by the Compensation Committee. On a change of control, the Investment Period for all outstanding awards ends, the number of vesting shares are determined at that date and any other rights cease. The number of shares that vest may be reduced to prevent adverse US tax provisions applying. The Compensation Committee may determine that outstanding awards are exchanged for equivalent awards.
Restricted Stock Plan To encourage a share ownership culture and long-term retention as well as supporting recruitment. Directors and senior executives of the operating companies and senior executives of the parent company. n/a Typically 3-year retention period. The vesting period for all outstanding awards is deemed to end. The Compensation Committee may determine that outstanding awards are exchanged for equivalent awards or that outstanding awards are unaffected by the change of control.
Executive Stock Option Plan To provide a tool to promote retention and recruitment. Occasional use only to deal with special situations. 3 years Conditions are determined at the time of grant of the award. Options may be exercised within one month (or a longer period if the Compensation Committee permits) of the Compensation Committee's notification of the change of control. The number of shares or ADRs is pro-rated down in accordance with the change of control date. The Compensation Committee may determine that outstanding awards are unaffected by the change of control.

Notes

1 Base salary is the only pensionable element of remuneration.
2 Awards are granted under the Restricted Stock Plan.
3 Since its first adoption in 1997, grants have been made annually under the Worldwide Ownership Plan (WWOP) and as at 31 December 2007 options under this plan had been granted to approximately 64,000 employees for over 30 million ordinary shares of the Company.
4 Total Shareholder Return (TSR) is the return on investment that share owners receive over time and takes into account the share price appreciation/depreciation and dividends received.