With effect from 3 June 2010, WIll Wyatt stood down as Chairman of the Remuneration Committee after five years in that post and Simon Beresford-Wylie was appointed in his place. As at the date of this Report, Will Wyatt continues to serve as a Non-Executive Director of the Company, as the Senior Independent Director and also as a member of the Remuneration Committee. The other members of the Committee are Nigel Moore and Maria Richter. Each member of the Committee is independent. During 2010, the Committee had three scheduled meetings and one meeting called at short notice. All members attended all the Committee meetings in 2010, except for Simon Beresford-Wylie who was unable to attend the February meeting due to a conflicting commitment that arose at short notice. Despite this absence, Simon Beresford-Wylie provided feedback to the Committee Chairman on the meeting’s business ahead of the meeting.
During 2010, the Remuneration Committee considered, among other matters, the 2009 annual bonus plan outcome, the 2010 annual bonus plan structure including executive directors’ personal objectives, long-term incentive awards, the 2009 Remuneration Committee report, the structure of the annual bonus plan and long-term incentives going forward, and the introduction of a clawback policy.
The Remuneration Report in respect of the year ended 31 December 2010 is set out on pages 28 to 35 of the Annual Report.
Duties of the Remuneration Committee:
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determining and agreeing with the Board the framework or broad policy for the remuneration of the Company’s Chairman, the executive directors, the Group Company Secretary and such other members of the Operations Executive as it is designated to consider. No director or manager may be involved in any decisions as to their own remuneration. The remuneration of non-executive directors is a matter for the Chairman and the executive directors;
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in determining such policy, taking into account all factors which it deems necessary, including having regard to the remuneration trends across the Company. The objective of such policy is to ensure that members of the executive management of the Company are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Company;
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reviewing the ongoing appropriateness and relevance of the remuneration policy;
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approving the design of, and determining targets for, any performance related pay schemes operated by the Company and approving the total annual payments made under such schemes, ensuring that any performance related pay schemes are structured to drive executive management to deliver sustainable long-term growth in shareholder value;
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reviewing the design of all share incentive plans for approval by the Board and shareholders. For any such plans, determining each year whether awards will be made and, if so, the overall amount of such awards, the individual awards to executive directors and other senior executives and the performance targets to be used, ensuring that awards are merited, particularly given the context of ongoing business performance, that they are not disproportionate and potentially rewarding failure;
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determining the policy for, and scope of, pension arrangements for each executive director and other senior executives;
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ensuring that contractual terms on termination, and any payments made, are fair to the individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;
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within the terms of the agreed policy and in consultation with the Chairman and/or Group Chief Executive as appropriate, determining the total individual remuneration package of the Chairman, each executive director and other senior executives, including bonuses, incentive payments and share options or other share awards;
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in determining such packages and arrangements, give due regard to any relevant legal requirements, the provisions and recommendations in the Code, the UK Corporate Governance Code and the UK Listing Authority’s Listing Rules and associated guidance;
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reviewing and noting annually the remuneration trends across the Company or Group;
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overseeing any major changes in employee benefits structures throughout the Company or Group;
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agreeing the policy for authorising claims for expenses from the Group Chief Executive and Chairman and other directors of the Company;
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ensuring that all provisions regarding disclosure of remuneration, including pensions, as set out in the Directors’ Remuneration Reporting Regulations 2002, the Code and UK Corporate Governance Code, are fulfilled; and
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being exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee, and to obtain reliable, up-to-date information about remuneration in other companies. The Committee shall have full authority to commission any reports or surveys that it deems necessary to help it fulfil its obligations.
Reporting Responsibilities
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The Committee Chairman reports formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
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The Committee makes whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
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Produce an annual report of the Company’s remuneration policies and practices, which will form part of the Company’s Annual Report and ensure that it is put to shareholders for approval at the Annual General Meeting.
Other Responsibilities
The Committee, at least once a year, reviews its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommends any changes it considers necessary to the Board for approval.
Authority
The Committee is authorised by the Board to seek any information it requires from any employee of the Company in
order to perform its duties. The Committee is also authorised by the Board, in connection with the Committee’s duties, to obtain, at the Company’s expense, any outside legal or other professional advice.