Report on Directors’ Remuneration  | continued Remuneration components Component Purpose and link to strategy Operation Metrics Opportunity (i)  Basic  Salary  and Benefits  Competitive salaries and  benefits help to attract and  retain staff with the  experience and knowledge  required to enable the  Group to compete in its  markets Reviewed annually; changes are  generally effective on 1 January Set by reference to competitive market  practice Employment-related benefits include  the use of company cars, medical/life  assurance and relocation costs, where  necessary Consideration is given to: (i)  scope of role and  responsibility;  (ii)  personal performance;  (iii)  company performance;  (iv) step changes in  responsibility;  (v)  experience;  (vi) potential retention issues;  (vii) remuneration trends  across the Group Set at a level which the  Committee considers  appropriate taking into  consideration the individual’s  skills, experience and  performance and to ensure it  is appropriately positioned  against peers. This will be  sufficient to attract and retain  directors of required quality  but the Committee avoids  paying more than is  necessary for this purpose (ii)  Annual  Performance- related Incentive  Plan The annual incentive plan  drives and rewards the  achievement of Group and  personal targets. A deferral  element ties the portion of  any annual reward exceeding  target performance to the  longer-term performance of  the CRH share price and  aligns executives with  shareholder interests Target performance is 80% of basic  salary (90% for US-based executives) Payouts in excess of target are  deferred for three years and payable in  CRH shares The performance-related  incentive plan is based on  achieving clearly defined and  stretch annual targets and  strategic goals c. 80% of the plan is  weighted towards the  achievement of financial and  return targets while c. 20% relates to personal/ strategic goals Maximum payout of 1.5  times target, i.e. 120%  (135% for US based  executives) (iii)  Chief Executive  long-term  incentive plan  (LTIP) The purpose of the LTIP is  to incentivise superior  performance over the long  term and the successful  execution of Group strategy The LTIP, which covers the five-year  period 2009-2013, follows the same  structure for LTIPs put in place for  previous CRH chief executives Any payments under the plan will be  made in cash and will not be  pensionable. While accruals are made on  an annual basis, there is no commitment  to any payment until after the end of the  five-year period The LTIP incorporates  challenging goals in respect of: (i)  TSR by comparison with  a peer group; (ii)   growth in earnings per  share; and  (iii)  the strategic development  of the Group.  The total maximum earnings  potential is 40% of  aggregate basic salary  (iv)  Participation in  long-term share  incentive plans  (Share Plans) The performance metrics  for the long-term share  incentive plans align  executives with shareholder  interests, incentivise  long-term superior  performance and help  attract and retain key  executives Involves conditional awards of shares  and share options. Executive Directors  receive awards under both share plans The vesting period for the Share Plans  is three years Awards are made annually after the  final results announcement  The percentage of share capital which  can be issued complies with  institutional guidelines The 2006 Performance Share  Plan (PSP) is TSR-based,  while the 2010 Share Option  Scheme (Option Scheme) is  EPS-based The metrics applied for  awards under PSP and the  Option Scheme are set out  on pages 59 and 60 PSP: 150% of basic salary  Option Scheme:  Currently limited to 150% of  basic salary; no award since  the approval of the Option  Scheme by shareholders has  exceeded that threshold (v)  Pension  Arrangements Pension arrangements  provide competitive and  appropriate retirement plans Irish-based executive Directors  participate in a defined benefit scheme.  With effect from 1 January 2012, the  defined benefit schemes are based on  career average salary. The defined  benefit scheme which the Directors  participate in is closed to new entrants US-based executive Director participates  in a defined contribution scheme and in  an unfunded Supplemental Executive  Retirement Plan Not applicable Two thirds of career average  salary at retirement for full  service CRH 57