Constitution

The Board has established a committee of the Board to be known as the Remuneration Committee. The objective of the Committee is to consider remuneration packages needed to attract, retain and motivate Executive Directors and senior employees and to ensure that they are compensated appropriately for their contributions to the Group’s performance. In doing so it should take into account market practice, regulatory provisions and the interests of shareholders and other stakeholders. Remuneration in this context shall be interpreted in the broadest sense to include all benefits and terms of employment.

Membership

The Committee shall be appointed by the Board. All members of the Committee shall be independent Non-Executive Directors of the Company who have no personal interest in the outcome of their decisions. The Committee shall consist of not less than three members. The Chairman of the Board may also serve on the Committee as an additional member if considered independent on his appointment as Chairman, but shall not be appointed Chairman of the Committee.

Attendance at meetings

Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Group Chief Executive, the General Manager HR and external advisers may be invited to attend for all or part of the meeting as appropriate.

Chairman

The Chairman of the Committee shall be appointed by the Board from amongst the independent Non-Executive Directors.

Secretary

The Company Secretary shall act as the secretary of the Committee.

Quorum

A quorum shall be two members.

Frequency of meetings

Meetings shall be held as required but not less than twice per year.

Authority

In order to perform its duties, the Committee shall be granted full access to Company information and can seek information from any employee of the business or from the Company’s advisers.  It shall have access to sufficient resources to carry out its duties, including access to the Company Secretariat for assistance as required.

The Committee is further authorised, at the Company’s expense, to obtain outside legal or other independent professional advice, including the appointment of remuneration consultants and, within any budgetary restraints imposed by the Board, to commission or purchase any relevant reports, surveys or information which it deems necessary to help fulfil its duties.

Committee members may undertake appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members.

Duties

The Committee shall:

  • determine and review on an ongoing basis, and present for consideration by the Board, the policy for the remuneration of the Group's Chairman, the Executive Directors, and other designated senior employees.  Remuneration of Non-Executive Directors shall be a matter for the Board.  No Director or manager shall be involved in any decisions as to their own remuneration;
  • in determining such policy, take into account all factors deemed necessary, including relevant legal requirements, the provisions and recommendations in the Combined Code and the UKLA requirements, with the objective of ensuring that members of the executive management of the Group are provided with appropriate incentives and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Group;
  • approve the design of, and determine targets for, any performance related remuneration schemes operated by the Group for the benefit of Executive Directors and other designated senior employees and approve the payments made to them under such schemes;
  • review the design of all share incentive plans prior to their approval by the Board and shareholders.  For any such plans, determine each year whether awards will be made, and if so, their overall amount, individual awards to Executive Directors and any other designated senior employees and the performance targets to be used;
  • determine the policy for, and scope of, pension arrangements for each Executive Director and any other designated senior employees;
  • ensure contractual terms of Executive Directors and designated senior employees are fair to the individual and to the Group; ensure that, on termination, failure is not rewarded and that the duty to mitigate loss is fully recognised;
  • within the agreed framework and in consultation with the Chairman/Group Chief Executives appropriate, determine the total individual remuneration package of each Executive Director and other designated senior employees, including bonuses, incentive payments and share options or other share awards;
  • review and note annually the remuneration trends across the Group and oversee any major changes in employee benefits structures throughout the Group;
  • agree the policy for authorising claims for expenses from the Group Chief Executive and Chairman;
  • be responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee;
  • obtain reliable, up-to-date information about remuneration in other companies.  The Committee shall have full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations; and
  • The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

Reporting procedures

The Committee Chairman shall report to the Board on its proceedings after each meeting on all matters within its duties and responsibilities where appropriate.

The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.

Where Board members are not present at the Committee meetings, the minutes will be circulated to them to provide them with the opportunity to raise any queries.

The Committee shall produce an annual report of the Group's remuneration policy and practices, which will form part of the Group's annual report and ensure each year that it is put to the shareholders for approval at the AGM.

The Chairman of the Committee shall attend the AGM and shall answer questions on the Committee’s activities and its responsibilities.