Total shareholder return performance

Schedule 7A to the Companies Act 1985 (the Act) requires GKN’s TSR performance to be displayed in chart form against the TSR of a readily available broad equity market index. The Committee considers that in order to maintain consistency, it continues to be appropriate to show the FTSE 100 Index to fulfil this requirement.

The chart below therefore illustrates the TSR performance (based on an initial investment of £100) of GKN plc ordinary shares over the five year period to the end of 2007 compared to the TSR that would have been obtained over the same period from a hypothetical investment in the companies constituting the FTSE 100 Index.

However, for the purposes of the LTIP and ESOS different comparator companies are used (see Remuneration policy) and the TSR calculation methodology required is different from that required by the regulations for the broad equity market index graph. We therefore show below GKN’s TSR and rank against the TSR of the relevant comparator group, together with the vesting percentage of the awards for the five most recently completed measurement periods as computed under the terms of the LTIP and for the completed measurement periods for the ESOS awards based on TSR performance.

(a) For the measurement periods under the LTIP ending on 31 December 2003, 2004 and 2005 the comparator groups were based on the FTSE 100 Index less the telecommunications, media, technology and financial services sectors and comprised 57, 63 and 64 companies (including GKN) respectively. For the measurement periods ending on 31 December 2006 and 2007, they comprised tailored peer groups of 38 and 41 companies respectively (including GKN), listed in the Remuneration policy.

(b) The ESOS comparator groups comprised the FTSE 350 Index constituent companies on 1 January in the first year of the relevant measurement period.

The chart below illustrates GKN’s TSR compared to the median TSR of the relevant comparator group under the LTIP and ESOS for such periods.