FINANCIAL STATEMENTS
STRATEGIC REPORT
GOVERNANCE
Element
Purpose and link to strategy
Operation (including framework used to assess performance)
Opportunity
Rewards the achievement of sustained long-term operational and strategic performance and is therefore aligned with the delivery of value to shareholders. Facilitates share ownership to provide further alignment with shareholders.
Annual awards of performance shares 1 normally vest after three years subject to performance conditions and continued service. Performance is normally tested over a period of at least three financial years. A post-vesting holding period is applied to Executive Directors for awards made in 2018 and beyond. Executive Directors are required to retain the LTIP shares that vest (net of tax and NICs) for a period of two years. The two year holding requirement will continue if they leave employment during the holding period. Awards are normally subject to a combination of measures which may include financial and/or strategic measures and/or total shareholder return relative to the constituents of a relevant comparator index or peer group. The Committee retains the flexibility to vary the performance measures and/or weightings for future awards. However, the Committee will consult in advance with major shareholders prior to any significant changes being made.
The maximum annual opportunity is 250% of base salary. However, in the normal course, awards will be made to Executive Directors over shares with a face value of 150% of base salary. Dividends will accrue on LTIP awards over the vesting period and be paid out either as cash or as shares on vesting and in respect of the number of shares that have vested.
LONG TERM INCENTIVE PLAN (“LTIP”)
Granting of annual awards aids retention.
Malus and clawback apply to the LTIP 2 .
Encourages employee share ownership and therefore increases alignment with shareholders.
The Group may from time to time operate tax-approved share plans (such as HMRC- approved Save As You Earn plans and Share Incentive Plans), for which Executive Directors could be eligible. Each Executive Director must build up and maintain a shareholding in the Group equivalent to 200% of base salary. Until the guideline is met, Executive Directors are required to retain 50% of any LTIP or DSBP awards that vest (or are exercised), net of tax and NICs. For these purposes, deferred bonuses and shares under the LTIP which have vested but are subject to a holding period would count towards these guidelines. The guideline extends post-cessation shareholding, with the lower of the holding on cessation or the full guideline applying for two years. The post-cessation guideline only applies to any share awards granted (or any other shares acquired) after the date on which the new policy is approved by shareholders.
The schemes are subject to the limits set by HMRC from time to time.
ALL-EMPLOYEE SHARE PLANS
Encourages Executive Directors to build a
Not applicable.
SHAREHOLDING GUIDELINES
meaningful shareholding in the Group so as to further align interests with shareholders.
107
Powered by FlippingBook