Remuneration Report

This Remuneration Report has been prepared by the Remuneration Committee (referred to in this report as the Committee) and has been approved by the Board of the Company.

The figures included in the sections of this report headed “Directors’ Emoluments” on pages 49 to 51 and “Directors’ Interests Under Employee Share Plans” on pages 46 to 48 have been audited by KPMG Audit Plc as required by the Directors’ Remuneration Report Regulations 2002. Their audit report is set out on page 56. The information in the remainder of this report has not been audited.

MEMBERSHIP AND ROLE OF THE COMMITTEE
The Committee consists exclusively of non-executive directors who are considered by the Board to be independent. Mr C D Collins is Chairman of the Committee and the other members throughout 2004 were Mr N D T Andrews and Mr N N Broadhurst. Mr W A M Clewlow was a member of the Committee until 9 December 2004 and Mr M J P Marks joined the Committee from 1 July 2004. The Company Secretary, Mr M C Murray, acts as Secretary to the Committee.

The Committee is responsible for:

• determining the remuneration, incentive arrangements and benefits, including pension rights and any compensation payments, of the executive directors;
  
• determining the remuneration of the Chairman of the Board and monitoring and approving the level and structure of remuneration of senior management who report directly to the Chief Executive, together with the Company Secretary; and
  
• reviewing, monitoring and approving, or recommending for approval, share incentive arrangements (including option schemes) of the Company.

The full terms of reference of the Committee are published on the Company’s website, www.oldmutual.com, and are also available free of charge on request from the Company Secretary.

During the year under review, the Committee met on three occasions. The meetings were attended by all of the then members of the Committee, save for one from which Mr Clewlow was absent, one from which Mr Marks was absent and one from which Mr Andrews was absent. The Board accepted the recommendations made by the Committee during the year without amendment.

The Committee retained Hewitt Bacon & Woodrow, a leading firm of UK remuneration consultants, as its independent advisers throughout 2004 and a representative of that firm attended all meetings. The terms of the letter of engagement of Hewitt Bacon & Woodrow are published on the Company’s website and are also available on request from the Company Secretary. Any work that the Company wishes Hewitt Bacon & Woodrow to do on its behalf, rather than for the Committee, is pre-cleared with the Chairman of the Committee with a view to avoiding any conflicts of interest. Hewitt Bacon & Woodrow advised the Company during the year in connection with certain aspects of its employee share plans.

The Committee was also assisted during the year by Stephen Mulliner, Kevin Stacey and Judy Gathercole of the Group Human Resources department, a specialist function within head office. It provides supporting materials for the matters that come before the Committee, including comparative data and justifications for proposed salary, benefit, bonus and share awards and criteria for performance targets and appraisals against those targets. It uses the services of external advisers as necessary. The Chairman of the Committee has access to, and regular contact with, members of the Group Human Resources department independently of the executive directors.

REMUNERATION POLICY
The Company embraces the principles and complies with the provisions of the Combined Code relating to directors’ remuneration.

The guiding principles which the Committee has applied during 2004, and which it intends to continue to apply, are as follows:

• to take account of appropriate benchmarks, while using such comparisons with caution, recognising the risk of an upward ratchet of remuneration levels with no corresponding improvement in performance. Members of the UK FTSE 100 Index provide the benchmark for UK-based executive directors, with particular reference to peer companies;
  
• to be sensitive in determining, reviewing, monitoring or approving matters under its remit to pay and employment conditions around the Group where relevant;
  
• to make a significant percentage of potential maximum rewards conditional on both short-term and long-term performance. These rewards include share-based incentives, in order to align the executive directors’ interests closely with those of shareholders;
  
• to provide an opportunity for overall remuneration packages to be in the upper quartile of the comparator group through payments under short-term and long-term incentive schemes if superior performance is delivered, while the fixed elements of remuneration remain benchmarked at or below appropriate median levels;
  
• to use predominantly measured and targeted objectives to determine performance-related remuneration to focus attention on the main drivers of shareholder value; and
  
• to attract, retain and motivate individuals of the exceptional calibre needed to lead the international development of the Group. The Committee’s policy is influenced by the need to be competitive with other international financial services groups, whilst also aiming to avoid paying more than is necessary.

The Committee seeks, where it considers appropriate, the views of institutional investors (including representative groups such as the Association of British Insurers (ABI)) on any significant changes to remuneration structures applicable to the executive directors. During 2004, it consulted about the continued use of earnings per share-based targets for executive directors’ long-term incentives and obtained feedback that this was preferred to certain other proposals.

In valuing share option awards, the Committee has regard to, but does not rely exclusively on, Black-Scholes modelling of share option values.

DIRECTORS’ REMUNERATION PACKAGES
Remuneration during 2004 for Mr Sutcliffe and Mr Roberts comprised a basic salary, a benefit allowance, an annual performance-based short-term incentive award paid partly in cash and partly in restricted shares, a bonus matching plan, and participation in the Company’s share option schemes.

The Committee reviews the structure of the executive directors’ remuneration packages annually to satisfy itself that the balance between fixed and variable remuneration and short- and long-term incentives and rewards remains appropriate.

Basic salary
In setting the basic salary of each executive director, the Committee takes into account market competitiveness and the performance of the director concerned, together with any changes in role or responsibility. This is consistent with the reward structure in place for executives below Board level and that used by comparable companies. Mr Sutcliffe’s basic salary of £500,000 p.a. remained unchanged during 2004 from that paid in 2003 and 2002, whilst Mr Roberts’ basic salary was increased by approximately 3% from £340,000 to £350,000 p.a.

Benefits and benefit allowance
The Company has a cash-based package approach for the executive directors and other senior UK executives. The benefit allowance (equal to 35% of basic salary for Mr Sutcliffe and Mr Roberts) is provided in lieu of contributions to pension funds and certain other benefits that would be usual at their level. Recipients of the benefit allowance may use it to purchase benefits appropriate to their needs from independent suppliers of their choice or may, if they wish, participate at their own expense in certain benefit arrangements established for Group employees in the UK.

Participation in any Group defined contribution pension arrangement is on a commercial basis, which must be fully funded from the benefit allowance. Mr Sutcliffe and Mr Roberts have both joined the defined contribution section of the Old Mutual Staff Pension Fund, and each made contributions to it from their benefit allowance in 2004. Life cover up to four times the UK statutory earnings cap and disability cover up to the free cover limit of £120,000 were provided to Mr Sutcliffe and Mr Roberts at the Company’s expense during the year as part of a Company-wide insurance policy.

Short-term incentive awards
The executive directors’ short-term incentive scheme for 2004 was altered to provide a maximum potential award equal to 130% of basic salary, of which two-thirds was payable in cash and the balance in restricted shares of the Company. For the awards to be made in 2005 relating to performance during 2004, such restricted shares will be subject to the attainment of the same performance conditions as apply to the “bonus match” shares described below and will not attract dividends during the performance period.

Achievement of financial targets based on the Group’s results for the year accounted for a potential maximum of 110% of basic salary for Mr Sutcliffe and 90% for Mr Roberts. These financial performance targets were subdivided between adjusted earnings per share (EPS), which accounted for 70% of the financial targets component, and return on average equity (RoAE), which accounted for the other 30%. The EPS component was calibrated in such a way that the maximum payment would only be made upon the attainment of EPS of 15.7p, and no part of this element of the bonus would be paid if EPS was less than 11.3p (which was 13% above the Company’s EPS in 2003). For RoAE, the range was 13% to 17%.

The outcomes for EPS and RoAE were 15.3p and 19.1% respectively and the percentage of basic salary earned by Mr Sutcliffe was 103.8% and that by Mr Roberts was 85.0%.

The balance of the maximum short-term incentive award, equal to 20% of basic salary for Mr Sutcliffe and 40% for Mr Roberts, was related to the fulfilment of specific personal objectives agreed by the Committee in advance. These were subject to a formal performance appraisal process at the end of 2004. Based on those performance appraisals, the Committee determined that, out of the maximum 20% for Mr Sutcliffe 15.4% should be paid and, out of the maximum 40% for Mr Roberts, 32% should be paid.

The Committee reviews personal objectives each year in the light of what are considered to be the key deliverables for each member of the executive management under its remit.

Bonus match
The Committee has determined that both Mr Sutcliffe and Mr Roberts may elect to invest some or all of the cash element of their short-term incentive award for 2004 by purchasing shares in the Company and holding them for three years in order to receive a matching award of restricted shares. The value of the matching award will be equal to the gross value of the amount used to purchase shares, namely before deduction of tax and National Insurance. The matching shares will cease to be subject to restrictions on the third anniversary of the award date, provided that: (1) a performance condition has been satisfied, namely that (i) in relation to one-half of the matching shares, the Group’s EPS in Sterling increases by at least 9% above the increase in the UK Retail Price Index (UK RPI) over the three-year period commencing on 1 January in the year of the award; and (ii) as to the other half of the matching award, the Group’s EPS in Rand increases by at least 9% above the increase in the South African Consumer Price Index (SA CPI) over the same period; (2) the shares purchased using the recipient’s short-term cash award are retained until the third anniversary of the award date; and (3) the recipient remains employed by the Group until the third anniversary of the award date.

Long-term incentive awards
Details of the executive directors’ long-term incentive awards are set out under the heading “Directors’ Interests Under Employee Share Plans” below.

DIRECTORS’ INTERESTS UNDER EMPLOYEE SHARE PLANS

Share Option and Deferred Delivery Plan (SOP)
The SOP is generally used for the grant of executive options (or, until 2004, in the case of South African participants, deferred delivery shares) to qualifying senior employees. Regular annual grants were made under this plan in March 2004 and interim grants, for new appointments or promotions, were made in August 2004. Options and deferred delivery shares awarded during 2004 have a maximum life of six years. Mr Sutcliffe’s and Mr Roberts’ awards under the SOP in 2004 were over shares equal in value to 180% (out of a potential maximum of 200%) of their respective basic salaries at the time of grant. Awards under the SOP are phased annually so that no undue incentive arises in relation to any year of maturity. The quantum of annual awards made to the executive directors is decided by the Committee in the light of evaluation of performance of the recipients in the previous year.

Grants made under the SOP in 2004 were subject to: (i) as to one-half of the shares comprised in each grant, a Sterling-denominated EPS performance target linked to UK RPI; and (ii) as to the other half of the shares comprised in each grant, a Rand-denominated EPS performance target linked to SA CPI. The minimum target for option grants of up to 100% of basic salary was that growth in EPS must exceed the accumulated growth in: (i) as to one-half of the shares, UK RPI over the three-year vesting period plus 9%; and (ii) as to the other half of the shares, SA CPI over the three-year vesting period plus 9%. Higher targets apply to grants in excess of 100% of basic salary, namely up to 12% above the relevant indices for multiples of between 100% and 200% of basic salary and up to 15% above the relevant indices for multiples (where applicable) of over 200% of basic salary. The Committee considers these to be demanding performance targets in the current market environment. Awards made under the SOP in 2000 and 2001 lapsed completely upon non-fulfilment of the performance targets, and those made in 2002 vested only partially, following partial fulfilment of the performance targets.

Restricted Share Plan (RSP)
The RSP is used: (i) to assist in recruiting and retaining key individuals by making awards of shares which are restricted for three or more years and are subject to forfeiture in the event of prior termination of employment, unless special circumstances apply; (ii) as an adjunct to the annual bonus arrangements for the executive directors, to provide contingent matching awards of shares, subject to performance targets and to some or all of the cash element of their short-term incentive awards being invested and retained for the three-year matching period in shares in the Company; (iii) to make contingent awards of shares subject to a three-year holding period as a form of payment of short-term incentive awards based upon performance evaluation for the prior year; and (iv) to make awards of restricted shares under long-term incentive plans for the Group’s US asset management business.

Performance targets
In choosing the performance targets for the SOP and the RSP, the Committee has considered the merits of EPS-based targets against alternative possibilities, such as comparative performance against a selected group of other companies or growth in embedded value. The Committee has determined that EPS is currently the most appropriate criterion, as the Company’s mix of businesses and geographical profile, together with the volatility of life peers, makes it difficult to establish a suitable basket of comparator businesses, and growth in embedded value would not, because of the way in which embedded value is calculated, reflect the full contribution to the Group’s performance of its important asset management and banking activities.

Since 2002, in recognition of the location of the Company’s shareholding base, the Committee has decided that it would be more appropriate for EPS to be tested in both Sterling and Rand terms, and awards granted from 2002 onwards have therefore been split as to one-half UK RPI-based and as to the other half SA CPI-based. The Committee intends to continue to apply this during 2005, but will keep the suitability and incentivising effect of performance target-linked share-based remuneration under periodic review. It also recognises that the application of International Financial Reporting Standards (IFRS) to the Group’s results from 2005 onwards will affect reported EPS and the direct comparability between EPS for different years pre- and post-IFRS, which it will need to consider. In evaluating to what extent performance targets have been fulfilled, the Committee will use post-IFRS numbers adjusted to make them as closely comparable as possible to the base year. This will include the smoothing of long-term investment returns in the Group’s life assurance and general insurance businesses. It will liaise with the Group Audit Committee to ensure that the evaluation of the performance conditions is accurately validated.

Savings-Related Share Option Scheme (Sharesave)
The Group operates a savings-related share option scheme, which provides a savings and investment opportunity for full-time and parttime employees of the Group’s participating UK businesses. Options may normally be exercised after three or five years at a price equivalent to not less than 80% of the market value of the shares at the date of invitation to participate.

The following options and rights over shares in the Company were outstanding in favour of directors of the Company under the share schemes described above at 31 December 2004, those granted during the year then ended being highlighted in bold, and those that lapsed after the year-end being printed in italics:

Save as mentioned in the table above, there have been no changes in the directors’ interests in any of the Group’s employee share plans between 31 December 2004 and 28 February 2005.

Notes:
1 Restricted shares, which are to be released on the fifth anniversary of Mr Roberts’ appointment (i.e. on 21 August 2005), subject to his still being in employment with the Group on that date. Mr Roberts is entitled to the dividends on these shares, pending vesting.

2 The SA CPI-related options granted under the SOP on 4 March 2002 and SA CPI-related restricted share awards made under the RSP on 5 March 2002 lapsed on 28 February 2005 because the performance condition (relating to growth in the Company’s Rand-denominated EPS between 2001 and 2004) was not fulfilled.

3 The Sharesave option price was determined as 20% below the average of the Company’s share price on 7, 8 and 11 March 2002. The Company’s share price at the date of grant (5 April 2002) was 109p.

4 Subject to the fulfilment of performance targets prescribed by the Committee, under which:

• options granted on 26 February 2003 will only be exercisable if the Company’s EPS in the year ending 31 December 2005 increases by prescribed factors of between 9% and 15% in excess of as to one-half, UK RPI, and as to the other half, SA CPI, in comparison to EPS for the year ended 31 December 2002. The basic factor of at least 9% over UK RPI/SA CPI applies to multiples of up to one times basic salary, with a sliding scale up to 15% applicable to multiples over one times basic salary;
  
• restricted shares awarded on 26 February 2003, in conjunction with the investment by the director concerned of some or all of his net bonus for 2002 in shares in the Company, will only be released if the Company’s EPS in the year ending 31 December 2005 increases by at least 9% in excess of as to one-half, UK RPI, and as to the other half, SA CPI, in comparison to EPS for the year ended 31 December 2002. No entitlement to dividends applies to these restricted shares, pending vesting;
  
• options granted on 3 March 2004 will only be exercisable if the Company’s EPS in the year ending 31 December 2006 increases by prescribed factors of between 9% and 15% in excess of as to one-half, UK RPI, and as to the other half, SA CPI, in comparison to EPS for the year ended 31 December 2003. The basic factor of at least 9% over UK RPI/SA CPI applies to multiples of up to one times basic salary with a sliding scale up to 15% applicable to multiples over one times basic salary;
  
• restricted shares awarded on 3 March 2004, in conjunction with the investment by the director concerned of some or all of his net bonus for 2003 in shares in the Company, will only be released if the Company’s EPS in the year ending 31 December 2006 increases by at least 9% in excess of as to one-half, UK RPI, and as to the other half, SA CPI, in comparison to EPS for the year ended 31 December 2003. No entitlement to dividends applies to these restricted shares, pending vesting.

5 Options granted under the SOP on 3 March 2004 were based on the closing middle market price of the Company’s shares on the London Stock Exchange on 1 March 2004.

6 The numbers of shares awarded under the RSP on 3 March 2004 were calculated by reference to a price of 95.25p per share, being the price at which shares were acquired for the account of the director concerned with some or all of his net of tax bonus for the year ended 31 December 2003.

During the year the following restricted shares awarded as joining grants under the RSP were released. Mr Roberts paid the associated income tax and employee’s National Insurance contributions arising from their receipt out of his own funds, enabling him to retain all of the shares.

2005 REMUNERATION ARRANGEMENTS FOR THE EXECUTIVE DIRECTORS
Mr Sutcliffe’s basic salary for 2005 has increased from £500,000 p.a. to £550,000 p.a. and Mr Roberts’ basic salary has increased from £350,000 p.a. to £385,000 p.a. Both increases were considered by the Committee to be appropriate in the light of comparative market data for the UK financial services sector, with particular reference to larger UK life assurance companies. The Committee took note of the fact that Mr Sutcliffe’s basic salary had not changed since his appointment as Chief Executive in November 2001 and that Mr Roberts’ basic salary had increased only twice and in each case by small percentage amounts since his appointment as Group Finance Director in August 2000.

The structure of short-term and long-term incentives for 2005 has not been changed other than to remove the performance condition from the deferred element of any short-term incentive award receivable by the executive directors for their 2005 performance. This reflects the fact that the bonus has already been earned at the time of the award and is in line with practice at comparator companies. This does not affect the “bonus match” arrangements described on page 45 and the receipt of shares under those arrangements remains subject to the attainment of a performance condition.

EXECUTIVE DIRECTORS’ SERVICE CONTRACTS
Directors holding executive office have service contracts with the Company. Their terms are considered by the Committee to provide a proper balance of responsibilities and security between the parties.

The Company’s policy is to fix notice periods for executive directors at a maximum of 12 months. Compensation for loss of office, where applicable, is tailored to reflect the Company’s contractual obligations and the obligation on the part of the employee to mitigate loss.

Mr Sutcliffe and Mr Roberts have service contracts terminable by the Company on 12 months’ notice. If not terminated, these contracts can continue until the director attains the age of 60 (i.e. until 20 April 2016 for Mr Sutcliffe and 7 June 2017 for Mr Roberts). Their current contracts are dated 6 February 2002 and 15 November 2002 respectively.

Mr Roberts’ contract contains a liquidated damages provision under which, if the Company terminates his employment other than for cause or if he is constructively dismissed, the Company is required to pay him compensation for the period of unexpired notice equal to three-quarters of his then annual salary and benefit allowance plus a further threeeighths of annual salary on account of potential bonus entitlement. This has been agreed to constitute a genuine pre-estimate of his loss over the notice period after taking into account appropriate mitigation. Mr Sutcliffe’s contract does not contain any provisions quantifying compensation that would be payable on early termination.

NON-EXECUTIVE DIRECTORS’ TERMS OF ENGAGEMENT
The terms of engagement of the seven non-executive directors (other than the Chairman, Mr Levett) provide for their positions to be held at the will of the respective parties, i.e. on terms that they may be terminated by either side without notice. However, it is envisaged that they will remain in place on a three-year cycle, in order to provide assurance to both the Company and the non-executive director concerned that the appointment is likely to continue. The same arrangement will apply to Professor Nkuhlu, whose appointment to the Board will begin on 1 March 2005.

The Board has determined that, in the absence of exceptional circumstances, no non-executive director's cycle of appointment should be renewed more than twice, i.e. that non-executive directors should serve a maximum of nine years in that role, and that no non-executive director should continue in office beyond his seventieth birthday. The renewal of non-executive directors’ terms for successive three-year cycles is not automatic, with the continued suitability of each non-executive director being assessed by the Nomination Committee. A particularly searching review is carried out after the second three-year cycle.

The second three-year cycles applicable to Messrs Broadhurst and Clewlow (both of whom were first appointed as directors from 25 March 1999) were due to expire on 24 March 2005. Having regard to the need for continuity and experience, balanced against progressive renewal, of the non-executive component of the Board, and having assessed positively their contribution, the Nomination Committee recommended to the Board, and the Board in January 2005 approved, the extension of Mr Broadhurst’s term of appointment for a further three years (expiring on 24 March 2008) and the extension of Mr Clewlow’s term of appointment for a further 15 months (to expire at the end of the Annual General Meeting in May 2006).

Mr Collins was first appointed to the Board on 25 March 1999 and his second three-year term was due to expire on 24 March 2005. His contribution to the Board was assessed as part of the process leading to the Board’s decision to appoint him as Chairman elect to succeed Mr Levett. He entered into a new engagement letter with the Company in January 2005 setting out the terms applicable when he becomes Chairman in May 2005. Under these, subject to 12 months’ notice at any time given by either the Company or Mr Collins, to his being duly re-elected at any intervening Annual General Meetings and to the provisions of the Company’s Articles of Association relating to the removal of directors, Mr Collins’ appointment may continue until his seventieth birthday (19 January 2010).

The first three-year cycles applicable to Mr Bogni and Mr Andrews expired or were due to expire on 31 January 2005 and 31 May 2005 respectively. Following a review by the Nomination Committee of their contribution to the Board and their continued suitability, the Nomination Committee recommended and the Board in January 2005 agreed to extend their expected periods of engagement for a further three years (i.e. until 31 January 2008 and 31 May 2008 respectively).

Mr Marks’ and Mr Edey’s appointments are each expected to last for an initial term of three years from their dates of appointment (i.e. until 31 January 2007 and 23 June 2007 respectively) and will then be considered for renewal.

Mr Levett is due to retire as Chairman at the conclusion of the Annual General Meeting on 11 May 2005. No compensation or terminal payment is due to him from the Company in connection with his retirement.

NON-EXECUTIVE DIRECTORS’ FEES
The Company’s policy on remuneration for non-executive directors is that this should be fee-based and the Company has regard, in setting such fees, to market data on fees paid to non-executive directors by other members of the FTSE 100 Index, as well as considering the time commitment involved in fulfilling their roles. It is also the Company’s policy that neither the Chairman nor any of the other non-executive directors should receive share incentives geared to share price performance.

The basic fee for non-executive directors (other than the Chairman) was £35,000 p.a. in 2004 and, following a review carried out in November 2004 by a sub-committee appointed for the purpose by the Board on which none of the non-executive directors whose fees were being determined sat, was increased to £36,500 p.a. from 1 January 2005.

Additional fees were payable during 2004 for: Chairmanship (£14,000 p.a.) and membership (£5,000 p.a.) of the Group Audit Committee; Chairmanship (£9,000 p.a.) and membership (£3,000 p.a.) of the Remuneration Committee; membership of the Nomination Committee (£2,500 p.a.) (fees for the Chairmanship of this Committee having been waived by Mr Levett); and Chairmanship (£5,000 p.a.) and membership (£1,500 p.a.) of the Actuarial Review Committee. These additional fees remain unchanged in 2005.

A fee of £235,000 p.a. will be paid to Mr Collins upon his becoming Chairman from 11 May 2005. In addition, the Company will provide him with an office at its headquarters in London.

DIRECTORS’ EMOLUMENTS

1) Remuneration
Remuneration for the years ended 31 December 2004 and 31 December 2003 (including, in each case, remuneration from offices held with the Company’s subsidiaries, Old Mutual Life Assurance Company (South Africa) Limited (OMLAC(SA)), Old Mutual (US) Holdings, Inc. (OMUSH), Nedcor and Mutual & Federal Insurance Company Limited (Mutual & Federal) and their respective subsidiaries, where relevant) was as follows:

Notes:
1 Benefits include cash allowances payable to the executive directors, as well as travel and accommodation costs for directors’ spouses to accompany them to certain Board meetings or other corporate events of the Company and its major subsidiaries. The amount of this expenditure is reported to and considered by the Committee, and procedures are in place for such costs to be authorised. The Committee is satisfied that such expenditure is reasonable and in the interests of the Company in enabling the directors concerned to fulfil their roles better.

2 The cash bonus amounts for 2004 (£273,000 for Mr Roberts and £397,000 for Mr Sutcliffe) are eligible for deferment, at the director’s election, into a bonus matching arrangement under the Restricted Share Plan. The bonuses for 2003 were applied net of tax, as to £34,000 gross (in the case of Mr Roberts) and as to £80,000 gross (in the case of Mr Sutcliffe) to purchase shares in the Company, which are held in trust for the director under the bonus matching arrangement under the Restricted Share Plan.

3 Pension contributions were deducted from the directors’ benefit allowance.

4 Includes fees of £36,000 (2004) and £40,000 (2003) from OMUSH.

5 Includes fees of £34,000 (2004) and £34,000 (2003) from OMLAC(SA), and £127,000 (2004) and £23,000 (2003) from Nedcor.

6 Includes fees of £13,000 (2004) and £14,000 (2003) from OMLAC(SA), £120,000 (including £46,000 of entitlements arising from previous years) (2004) and £191,000 (including £66,000 of entitlements arising from previous years) (2003) from Nedcor, and £3,000 (2004) and £5,000 (2003) from Mutual & Federal.

7 Inclusive of the cost of accommodation in London provided by the Company until 19 April 2003.

8 Bonus paid by Nedcor to Mr Laubscher in March 2003, which related to the year ended 31 December 2002.

9 Includes fees of £19,000 from OMLAC(SA) and £25,000 from Nedcor. Certain of the directors waived fees for non-executive directorships held in subsidiary companies totalling £72,000 during the year ended 31 December 2004 in favour of the Company or its subsidiaries. These waivers are expected to continue in effect in the future.

2) Pension benefits
Mr Sutcliffe and Mr Roberts continued to contribute from their benefit allowance to the Old Mutual Staff Pension Fund (which is a defined contribution scheme) during 2004. The accumulated value of Mr Roberts’ funds in that scheme was £96,000 at 31 December 2004 (£67,000 at 31 December 2003) and the accumulated value of Mr Sutcliffe’s funds in that scheme was £66,000 at 31 December 2004 (£41,000 at 31 December 2003).

None of the other directors of the Company had any accrued pension fund benefits in any Group pension fund at 31 December 2004 and none of them contributed to any Group pension fund during 2004.

OTHER SHARE SCHEME INFORMATION

A) Old Mutual Group Achievements (OMGA)
Share Incentive Scheme
During the year Mr Levett took delivery of his remaining interests under the OMGA Share Incentive Scheme, which operated prior to demutualisation of the Group in 1999. Details are set out in the following table:

Note: The aggregate amount of unrealised gains made by Mr Levett in relation to the above at the date of delivery was R4,454,548.

B) Subsidiaries’ Share Incentive Schemes
The Company’s separately listed subsidiaries, Nedcor Limited (Nedcor) and Mutual & Federal Insurance Company Limited have their own share incentive schemes which are under the control of the remuneration committees of their respective boards.

A former director, Mr Laubscher, had the following options over shares in Nedcor under the terms of the Nedcor Group (1994) Employee Incentive Scheme at 31 December 2004:

Notes:
1 Under his termination arrangements with Nedcor, Mr Laubscher was allowed to retain the above options on terms that, if not exercised by whichever was the earlier of their prescribed expiry dates and 30 June 2005, they would then lapse. The performance conditions originally applicable to the awards made in 2001, 2002 and 2003 no longer apply.

2 In accordance with the rules of the Nedcor Group (1994) Employee Incentive Scheme, all optionholders (whether still employed by the Nedcor Group or not) were entitled to receive an additional award of options in connection with Nedcor’s rights issue in May 2004 to compensate for the dilutive effect of that issue on pre-existing options. Details of the award made to Mr Laubscher were as follows:

Mr Laubscher exercised the following options over shares in Nedcor during 2004:

Notes:
1 Average price of shares sold on exercise date.

2 The aggregate amount of gains made by Mr Laubscher under the above exercises was R4,506,313.

3 Options granted to Mr Laubscher under the Nedcor Group (1994) Employee Incentive Scheme on 14 August 1998 over 101,400 Nedcor shares at an exercise price of R98.75 per share lapsed on 14 August 2004.

Mr Laubscher exercised the following options over shares in Old Mutual plc during 2004:

The aggregate amount of gains made by Mr Laubscher under the above exercises was £186,576. Options granted to Mr Laubscher under the SOP on 8 March 2001 over 92,500 shares in Old Mutual plc at an exercise price of £1.6225 per share lapsed on 30 December 2004.

C) Option exercises and releases of restricted shares during 2004
Save as set out in A) and B) above and for the release of restricted shares to Mr Roberts described under “Directors’ Interests under Employee Share Plans” earlier in this report, none of the directors of the Company exercised any options or received delivery of any share awards under any of the Group’s employee share schemes during 2004.

D) Employee Share Ownership Trusts
The Group operates a number of Employee Share Ownership Trusts (ESOTs), through which it collateralises some of its obligations under employee share schemes relating to the Company’s shares. At 31 December 2004 the following shares in the Company were held in ESOTs:

Notes:
1 The Capital Growth Investment Trust is used to satisfy restricted share awards or Deferred Delivery Shares in Zimbabwe. Any surplus shares held in trust because of non-vesting are taken into account when purchasing shares in respect of future grants.

2 The Old Mutual Employee Share Trust is primarily used to satisfy awards under the Old Mutual Restricted Share Plan around the Group (excluding South Africa and Zimbabwe). The strategy is to hold shares approximately equal to the number of shares awarded, but not yet vested, at any time. Any surplus shares held in trust because of non-vesting are taken into account when purchasing shares in respect of future grants.

3 There are various trusts in existence in South Africa relating to various current and historic share incentive schemes. The strategy for each scheme has been to ensure that sufficient shares are acquired to match at least 90% of the obligations of each share incentive grant. Where excess shares are held by any of the trusts, transfers between them are made to rebalance holdings appropriately.

The general practice of the ESOTs mentioned above is not to vote shares held at shareholder meetings, although beneficiaries of restricted shares may in principle give directions for those shares to be voted.

COMPANY SHARE PRICE PERFORMANCE
The market price of the Company’s shares was 132.5p (R14.30) at 31 December 2004, ranging from a low of 90.25p (R10.80) to a high of 136p (R15.30) during the year then ended. The graphs in the adjacent column show the total shareholder return on the Company’s shares (in green) over the five-year period from 1 January 2000 to 31 December 2004, firstly in Sterling on the London Stock Exchange, compared to the average total shareholder return of other members of the FTSE 100 Index, and secondly in Rand on the JSE Securities Exchange South Africa, compared to the other members of the Index of 40 leading companies listed on that exchange (the ALSI 40). The Company’s opening share price has been re-based to 100 in each case for the purposes of these graphs.

In the opinion of the directors, the FTSE 100 Index and the ALSI 40 are the most appropriate indices against which to measure total shareholder return of the Company, as they are indices of which Old Mutual plc is in each case a member and relate to the two markets where most of the Company’s shares are held and traded. The Board and Committee also have regard to a variety of other, sector-specific, comparators in reviewing the Company’s performance.

SHAREHOLDER APPROVAL OF THE REMUNERATION REPORT
An advisory vote on the Remuneration Report will be put to shareholders at the Annual General Meeting on 11 May 2005 in accordance with the Directors’ Remuneration Report Regulations 2002.

Christopher Collins
Chairman of the Remuneration Committee,
on behalf of the Board
28 February 2005