Remuneration

Principles of remuneration

The Directors’ Remuneration Policy is based on the following broad principles set by the Committee:

• provide a competitive remuneration package to attract and retain high quality individuals;
• align remuneration to drive the overall objectives of the business;
• align the interests of the executive team and senior management with those of shareholders; and 
• provide the foundation for overall reward and remuneration beyond the specific roles falling within the direct remit of the Committee.

Considerations when setting and determining the Directors’ Remuneration Policy

The Remuneration Committee has responsibility for determining the remuneration of the Executive Directors and other senior executives, and the fees of the Company Chairman. Its primary objective when setting Policy is to align remuneration to the long-term success of the business and shareholders, while at the same time enabling the Company to effectively recruit, motivate and retain Executives of the calibre required to lead the business and successfully implement the strategy, but without paying more than is necessary to do so. To achieve this, the Committee takes into account the responsibilities, experience, performance and contribution of the individual, as well as levels of remuneration for individuals in comparable roles elsewhere. The Policy places significant emphasis on the need to achieve stretching and rigorously applied performance targets, with a significant proportion of remuneration weighted towards performance related variable pay.

The Committee values investors’ views in the process of formulating remuneration policy decisions and also monitors best practice and developments in remuneration trends. It is therefore committed to maintaining strong relationships and an open dialogue with shareholders and shareholder advisory bodies and encourages them to share their thoughts with us.

While the Company does not formally consult with employees on executive remuneration, it does receive regular updates from the Group HR Director and, when setting remuneration for the Executive Directors, the Committee takes note of the overall approach to pay and employment conditions existing elsewhere with the wider workforce in the Group.

In implementing its policy, the Remuneration Committee gives full consideration to the principles set out in the Code with regard to Directors’ remuneration and due regard is given to the guidance issued by investor protection bodies and institutional investors more generally.

Remuneration policy is reviewed on an ongoing basis against the Committee’s broad principles and in light of emerging best practice in corporate governance.

Remuneration link to strategy

Our focus is to deliver long-term success for the business and shareholders and we seek to achieve this through various strategic initiatives. These are set out below together with the corresponding element of remuneration targeted to drive and incentivise their achievement.

A minimum shareholding requirement of 200% of salary exists for the Group Chief Executive and 150% of salary for the other Executive Directors. This aligns their interests with those of shareholders by focusing them on the execution of the business strategy and the creation of long-term shareholder value.