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Directors’ Remuneration

Dear Shareholder

The Vodafone Remuneration Committee commissioned a review of the reward package for the executive directors during the 2008 financial year. The objective was to consider the effectiveness of the reward arrangements in aligning with our strategy and shareholder interests. As a result, the Remuneration Committee has updated the remuneration policy, reward structure and market positioning for the coming years.

The key principles adopted for the updated Vodafone remuneration policy are as follows:

  • ensure a competitive total remuneration package as benchmarked against relevant companies and markets;
  • provide the opportunity for significant reward upside only if:
  • truly exceptional performance is delivered; and
  • participants invest their own money;
  • deliver a high proportion of total remuneration through performance related equity payments; and
  • drive alignment to our strategy, to create shareholder value, and reinforce shareholder alignment.

In order to fulfil this policy, the following key changes are being made to the components of directors’ remuneration:

  • the long term incentive structure is being simplified – awards will be made in performance shares only;
  • the vesting of performance shares will be based upon a combination of operational and equity performance measures; and
  • participants will be invited to invest their own money in order to maximise their long term award.

The Remuneration Committee continues to monitor how well incentive awards made in previous years align with the Company’s performance. We are confident that forecast rewards are commensurate with performance. This financial year we have taken the opportunity to further align the Vodafone reward package to the strategy and shareholder interests. In particular, this Remuneration Report outlines the detailed changes to the Global Long Term Incentive Plan (“GLTI”) for the 2009 financial year. This plan operates under the existing plan rules which were approved in 2006. As a result there will be no separate resolution for the amendments. However, the Remuneration Committee always takes an active interest in shareholder views and the voting on the Remuneration Report. As such, it hopes to receive your support at the AGM on 29 July 2008.

Luc Vandevelde
Chairman of the Remuneration Committee
27 May 2008