Strategic Report
Financial Statements
Governance
113
2024 EXECUTIVE DIRECTORS’ SHORT TERM INCENTIVE PLAN (AUDITED) The 2024 STIP outturn was calculated on corporate financial performance measures, split across three measures, and moderated by non- financial performance measures. The bonus is distributed on personal performance based on objectives agreed with the Remuneration Committee each year. The personal performance of David and Mark against strategic objectives is outlined on page 114. Based on the personal performance achievements the Committee distributed a bonus of 90% of maximum to both David and Mark. In line with our policy, 40% of the 2024 STIP award will be deferred into nil cost options (DSBP), subject to continued employment/good leaver status and clawback/malus provisions.
Estimated number of shares deferred under DSBP 1
Cash STIP (£000)
Deferred STIP (£000)
STIP (balanced scorecard) 90% of maximum² 90% of maximum²
David Richardson
567 324
378 259,330 216 148,189
Mark Godson
1 The estimated number of shares deferred under the DSBP were determined using the average closing share price between 1 October 2024 and 31 December 2024, being £1.4576. The actual number of shares will be confirmed in the RNS at the time of grant and updated in next year’s Directors’ Remuneration report. 2 Maximum opportunity is 150% of salary. The performance outcome against the targets set for the 2024 STIP was as follows:
STIP (BALANCED SCORECARD)
Threshold (25%)
On-target (50%)
Maximum (100%)
Weighting
Actual
% achieved
New business profit
40% £355m £387m £455m £460m 40% 30% £377m £429m £498m £504m 30%
Underlying operating profit
New business strain
30% 2.5% 1.75% 1.0% 1.3%
24%
Total 94% The financial component of the pool is subject to adjustment of up to +/- 15% of potential based on various pre-set non-financial performance measures. Under the strategic modifier the bonus outturn based on financial performance can be increased or decreased by up to 15%. For 2024, the strategic modifier was equally weighted between customer and people metrics. The customer portion of the modifier focused on the progress the Group has made in successfully embedding Consumer Duty. The Committee was satisfied with the progress on this portion of the modifier and determined that it was between target and maximum. The people portion of the modifier consisted of a scorecard encompassing the percentage of females in the Group’s senior leadership team; belonging index scores measured through Peakon and scores on proud to work at Just metrics. For 2024, we made strong progress on our diversity metric, with 40% of the senior leadership team identifying as female being above the stretch target; and saw positive scores on our belonging index at 8.3 (against a stretch target of 8.3), alongside a score of 86% on our Proud to work at Just metric in line with the stretch target we set ourselves. Taking all of the above into account, this has resulted in a 10% increase in the bonus pool (out of a maximum of 15%), resulting in a final corporate bonus outcome of 100% of maximum. The Committee is comfortable this outcome is reflective of exceptional progress in the year and the continued delivery of value for our shareholders. David and Mark were assessed to have outperformed against their personal objectives, having each successfully performed against an extensive range of stretching objectives set at the beginning of the year, further detail of which is provided below. As set out earlier, their final bonus outturns are 90% of maximum. RISK CONSIDERATION The Committee reviewed a comprehensive report from the Group Chief Risk Officer to ascertain that the Executive Directors’ objectives had been fulfilled within the risk appetite of the Group. Remuneration policy is designed to encourage a positive approach to risk management. In addition, the Committee received feedback from the Group Chief Risk Officer that there were no material issues to consider around regulatory breaches, customer outcomes or litigation that would prevent payment of any STIP award or trigger any malus provisions. Taking into account the risk assessment and the wider context in the year, including the experience of customers, employees and shareholders, the Committee was satisfied that the STIP awards should be paid.
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