Annual report and accounts 2008

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%