Report on directors’ remunerationSub‐section report on directors’ remuneration

Shareholding of executive directors

We encourage executive directors to build up a substantial shareholding in the company in line with the policy of encouraging widespread employee ownership.

We do not think it is necessary to specify a particular relationship of shareholding to salary because of the volatility of the stock market and the share retention features that already exist in the annual bonus share matching and long-term incentive plans. However, we describe separately here both the number of shares that the executive directors hold and the value expressed as a percentage of base salary.

No executive director sold shares during the year other than to satisfy income tax liability on the release of restricted shares.

The current value of the executive directors’ own shares based on the middle market value of Pearson shares of 659.5p on 27 February 2009 (which is the latest practicable date before the results announcement) against annual base salaries in 2008 is as follows:

Own shares Number of shares Value (% of base salary)
Marjorie Scardino 632,755 439%
David Bell 250,348 352%
Will Ethridge 128,758 163%
Rona Fairhead 209,259 273%
Robin Freestone 44,379 65%
John Makinson 397,733 500%

In addition, the executive directors have prospective holdings as a result of restricted shares that have vested and are held pending release. The current value of these shares before any withholdings is as follows:

Restricted shares Number of shares Value (% of base salary)
Marjorie Scardino 405,697 282%
David Bell 136,838 192%
Will Ethridge 121,017 153%
Rona Fairhead 169,404 221%
Robin Freestone 64,217 94%
John Makinson 142,002 178%