Just Group plc | Annual Report and Accounts 2024
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DIRECTORS’ REMUNERATION REPORT continued
Since appointment, whilst continuing to develop in the role, Mark has performed strongly from an individual perspective and the Group has also performed strongly over the same period. In light of this, the Committee has decided to award a salary increase of 10%. His LTIP opportunity has been increased to align with that of his predecessor at 175%, ensuring pay outcomes remain linked to stretching and ambitious performance targets and the delivery of long-term shareholder value. Following these changes the total package remains conservatively positioned against the market and is below where Mark’s predecessor would have been if he was still in post. The Committee will consider a similar level of increase to salary next year to bridge this gap, taking into account of Mark’s continued development and performance in the role. There will be no change to Mark’s STIP opportunity for 2025. There is no change to benefits or pension. STIP MEASURES The STIP will continue to be subject to stretching corporate financial and strategic measures, alongside personal objectives. The core bonus opportunity is determined through a balance of financial and strategic performance measures and is then distributed to Executive Directors against achievement of their personal objectives. There will be no change to the Group Pool structure and choice of financial measures for 2025. The Pool will continue to be weighted 40% on IFRS New Business Profit, 30% on Underlying Operating Profit and 30% on New Business Strain. The Pool will also continue to be subject to a +/- 15% strategic modifier based on Customer and People performance and for 2025 the modifier will also include an operating efficiency and risk measure. LTIP MEASURES For the LTIP awards to be made in 2025, the measures are broadly unchanged and have been selected to align to Just’s long term strategy. These are Cash Generation (15%); Relative TSR (25%); Return on Equity (‘ROE’) (45%) and ESG (15%). For 2025, the ESG measure will be based on investments into sustainable assets which is a key action that we can take as a business for the environment. CHAIR’S CONCLUDING COMMENTS I hope you will agree that we have struck an appropriate balance between retaining and motivating both the Executive Directors and, indeed, the wider workforce and aligning their interests with those of our shareholders and other stakeholders. I continue to make myself available to discuss these arrangements with key stakeholders and welcome feedback. I hope that you will support the resolution at the AGM on the Directors’ Remuneration Report.
LONG TERM INCENTIVE PLAN The LTIP awards made in 2022 are due to vest in March 2025 based on performance to 31 December 2024. The 2022 LTIP award had a 25% weighting on Underlying Organic Capital Generation (‘UOCG’); 30% on Relative TSR; 35% Return on Equity (‘ROE’) and 10% on ESG fund value relating to ESG classified investments. As disclosed in the 2023 Directors’ Remuneration Report, UOCG targets for the 2022 LTIP have been increased to reflect the adoption of IFRS17 and strategic costs. In addition, given the success in delivering capital self-sufficiency ahead of schedule the Group has been able to write new business at a higher level than envisaged when first approving the targets. This has negatively impacted the UOCG outturn. As disclosed last year, the Committee has therefore exercised discretion to remove the impact of writing this additional business on this measure to ensure that management are appropriately incentivised to drive, and are rewarded, for the delivery of performance which is positive for overall Group performance and the creation of shareholder value. A consistent approach will also be taken for the 2023-25 LTIP outturn. Following this, the Underlying Organic Capital Generation performance condition was achieved at 100% of maximum; the TSR performance condition was achieved at maximum, with our TSR being c.80% over the three year performance period versus an upper quartile TSR of c.21% in the comparator group; and the ROE and ESG Fund Value conditions were achieved at maximum. Therefore 100% of the 2022 LTIP award will vest in March 2025. The Committee felt that outturns under the 2022 LTIP awards were appropriate and did not exercise any further discretion. Further detail on the LTIP outcome is provided later on in this report. IMPLEMENTATION OF THE REMUNERATION POLICY FOR 2025 SALARY, PENSION, BENEFITS AND INCENTIVE AWARD LEVELS The Committee agreed that David Richardson would receive a salary increase with effect from 1 April 2025 of 3%. The CEO’s increase is in line with the increases awarded to most colleagues, with the salary increase budget available for the general employee population eligible to be considered for an increase sitting at 4%. The Committee reviewed David’s LTIP award level taking into account of the business context outlined above and earlier in this Annual Report, alongside the performance of the Company and David since his appointment in 2019. David has demonstrated exceptional leadership in helping transform the Company into a customer-focussed leader in the retirement space, growing sustainably and profitably to create significant value for shareholders. Since David’s appointment, there has been a total shareholder return of over 210%, representing significant returns for shareholders. In order to recognise this performance and to reflect the increased size and complexity of the Company, the Committee has determined to increase David’s 2025 LTIP award level to 250% of salary, using the existing headroom in the Remuneration Policy approved by shareholders at the 2023 AGM. As well as to recognise performance, the Committee considers this necessary to motivate and retain David in what is a hot talent market in this sector. An increase to the LTIP ensures that remuneration is only delivered if stretching, long-term performance targets are met, and creates further shareholder alignment as awards are delivered in shares. There is no change to David’s STIP opportunity. Mark Godson joined the Group as CFO in November 2023 and was appointed on a salary of £400,000 and received a maximum bonus and LTIP opportunity of 150% of salary. This package was set below his predecessor’s, who was paid a salary of £442,000 and received a maximum bonus opportunity of 150% of salary alongside a LTIP opportunity of 175% of salary. As set out in the 2023 Directors’ Remuneration Report, the Committee highlighted that it would increase his salary and LTIP opportunity as he develops and becomes more experienced in the role.
MICHELLE CRACKNELL Chair, Remuneration Committee 6 March 2025
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