The Group’s progress against its corporate scorecard is tracked to assess
our performance against our strategy.
The scorecard is made up of a collection of key performance indicators (KPIs) which indicate the Group’s overall health and performance across a range of operational, financial and non-financial measures.
The scorecard is central to Tullow’s approach to performance management and the 2017 indicators were agreed with the Board. Each year, targets within the scorecard may change to reflect the most material strategic objectives and associated risks the Group faces, as well as measures to deliver on the longer-term strategy of the Company. Tullow’s performance against the scorecard is tracked and reviewed at quarterly performance management meetings, which are attended by Executive Directors and senior leaders. The Group’s ongoing performance is cascaded quarterly to staff through management briefings and internal communications.
The Group scorecard is used to determine Executive Directors’ and employees’ performance-related pay to ensure that all areas of the business are driving towards the same goals. Executive Directors’ and Executive Vice Presidents’ performance is judged solely on the delivery of the targets set in the Group scorecard, whereas all other permanent employees’ bonuses are based on a combination of individual
and Group performance.
In 2017, a decision was taken to introduce a discretionary component to the Group scorecard of 10 per cent. This was introduced to recognise unplanned events or initiatives that required significant discretionary effort on the part of our employees.
Each objective measured has a percentage weighting, and financial and operational indicators have trigger, base and stretch performance targets. As reflected in the adjoining table, in 2017, Tullow’s overall performance was 39.7 per cent. The
‘relative’ Total Shareholder Return (TSR) tracks our performance over a three-year period. For 2017 performance, our share price during the fourth quarter of 2014 is compared to the fourth quarter of 2017, with the intervening period not accounted
for. For these two periods we remain below the median and therefore score nil out of the possible score of 50 per cent. However, the delivery of the majority of remaining targets reflects strong performance in maintaining liquidity, sustaining cash flows, operating safely, reducing our costs and overall operational delivery.