Summary report on Directors' remuneration
On behalf of the Board, I am pleased to present our report on Directors' remuneration for the year ended 30 June 2013. At Sky we are clear that our executive remuneration policy is key to the successful execution of our business plan, our growth strategy, and the delivery of value to our shareholders. The current remuneration framework continues to serve the Company and its shareholders well. We set tough performance targets commensurate with a growth business in a highly-competitive sector. Fixed pay is set low compared to market but achievement of stretching targets delivers significant but appropriate rewards for our Executive Directors through the annual bonus, the Long-Term Incentive Plan, and Co-Investment Plan awards. This has been an outstanding year for Sky and we believe that our remuneration policy aligns executive performance with shareholder value creation.
Our Long-Term Incentive Plan is atypical, vesting every second year breaking the annual vesting cycle. A consequence of this is that the value of the remuneration delivered to executive directors will spike every other year. The Committee reviewed the vesting schedule and concluded that it continues to support the overall strategy of the business.
When taking decisions on executive pay we take account of the prevailing facts and circumstances and the guidelines that are set for all employee remuneration across the Company. In this way we manage risk and best protect Sky and its shareholders. The Remuneration Committee continues to retain discretion to change remuneration either up or down to appropriately reflect Company or individual performance which we believe is in the best interests of our shareholders.
In what has remained a tough consumer environment, we sold more products to more customers and increased the amount they spend with us. Over the year, we added organically 2.6 million new subscription products, and with the acquisition of the O2 consumer broadband and fixed-line telephony business, we will finish the year with a total base of paid-for products of 31.6 million. This is more than double the level of five years ago. As a result of our strong performance in communications we became the UK's second-largest broadband provider, with more than 4.9 million customers, achieving this milestone less than seven years after launching broadband services. We ended the year with 11.2 million customers, up 547,000 on last year, making Sky the choice of well over 40% of households across Britain and Ireland.
This strong operational performance, combined with our continued focus on cost control and efficiency, has translated into excellent financial performance and increased returns to shareholders. Total revenue increased by 7%, adjusted operating profit was up by 9% to £1,330 million while adjusted basic earnings per share was 60.0 pence, an increase of 18% on last year and almost two and a half times the level of five years ago. In light of this, the Board has proposed a full-year dividend of 30.0 pence, an increase of 18% which represents the ninth consecutive year of growth. On the strength of the Group's overall performance, annual bonuses were paid out close to maximum levels.
This is the year in which the Long-Term Incentive Plan ('LTIP' or 'Plan') awards made in 2010 and 2011 are due to vest, in line with our biennial vesting schedule. In light of our outstanding performance, these awards vested in full. Over the three-year period of the plan shareholders have benefited from excellent performance; revenue has increased by £1.5 billion (27%), we have added £460 million to operating profit (53%) and almost doubled EPS from just over 30 pence to 60 pence per share. In addition, we have returned, via dividends and share buy-backs, £2.5 billion to shareholders, whilst our share price (using the undisturbed share price of £5.40 preceding the proposed News Corporation (subsequently renamed Twenty-First Century Fox, Inc.) offer) has risen by 50%. As previously stated our Plan is atypical, vesting every other year as opposed to every 12 months, therefore total remuneration for this year will spike when compared to last year.
The Remuneration Committee has decided to increase the base salaries of the CEO and CFO by 2.75% and 5% respectively. This is the first increase since July 2011 and for Andrew Griffith reflects an increase in responsibility for Sky's commercial businesses. The base pay of the CEO still remains lower than that of his predecessor in 2007. The overall pay increase for employees is 2.75% increasing to 3.75% for those earning less than £50,000 per year. Individual pay awards range from 0% to over 5%. Over the last two years for employees earning less than £50,000 per year the average increase is 8%; considerably in excess of average pay increases in the UK and reflective of the significant contribution that all our employees make to the continued success of our business. Our disciplined approach to the management of fixed pay and our firm belief in rewarding for performance means that the ratio of fixed to variable pay of 14%:86% for our Executive Directors compares favourably to the average of 26%:74% for our comparator group.
During the next financial year, the Committee will continue to review and take into account the revised remuneration reporting regulations provided by the Department of Business, Innovation and Skills. We continue to refine and develop the structure of our report to provide greater clarity and transparency and welcome feedback from our shareholders on its contents.
Finally, I would like to announce that I will be stepping down as Chairman of the Committee immediately after the Company's AGM in November 2013 and Tracy Clarke will be taking over as Chair.
Chairman of the Remuneration Committee