JUST GROUP PLC Annual Report and Accounts 2021
DIRECTORS’ REMUNERATION REPORT CONTINUED
Short Term Incentive Plan Page 97 details the targets and outcomes relating to 2021. For performance in 2021 the Committee approved awards for David Richardson and Andy Parsons at 80% of maximum. These payments reflect their strong personal performance and financial results, which in aggregate exceeded the challenging business plan approved by the Board. No discretion was applied. No payments were made to past Directors. Shares options that were retained post-termination and vested during the year to Rodney Cook and Simon Thomas are disclosed on page 100. High level view on performance • Management expense overrun was successfully eliminated in 2021 • Good progress with the PRA, which included receiving their approval to change the Group’s Solvency II internal capital model • Retirement Income sales increased 25%, of which Defined Benefit De-risking sales were up 28% • Underlying organic capital generation more than doubled the FY20 result, exceeding the 2022 target a year ahead of expectations In line with the policy, 60% of the Executive Directors’ STIP will be paid in cash and 40% will be deferred into Just Group shares for three years under the Deferred Share Bonus Plan (“DSBP”). The table below illustrates performance against the STIP performance measures for 2021. The balanced scorecard approach determines the core bonus opportunity through a basket of financial and strategic performance measures, which is distributed to Executive Directors against their achievement of their personal objectives. Details of key achievements are provided on page 98.
The business plan agreed by the Board in 2020 did not include the payment of dividends in 2021. The dividend policy has not been impacted by COVID-19. REMUNERATION COMMITTEE 2021 The Committee is made up exclusively of Independent Non-Executive Directors. The terms of reference are available at www.justgroupplc.co.uk . The focus of the Committee includes the remuneration strategy and policy for the whole Company as well as the Executive Directors. The key activities of the Committee during the year included: • review and approval of the Directors’ Remuneration Report; • approval of the grant of the 2021 awards and performance conditions under the Long Term Incentive Plan (“LTIP”); • approval of the grant of share options under the Sharesave scheme (“SAYE”); • assessment of the performance of the Executive Directors against the 2020 corporate financial, non-financial and personal performance outturns, in relation to their annual bonus, in the context of wider Company performance and approving the payments; • approval of the list of colleagues with responsibilities categorised under Solvency II and the treatment of their variable pay under the regulations; • review and approval of bonus plans across the Group, where they are not aligned to the Group Short Term Incentive Plan (“STIP”) or Group LTIP Plan; • review and approval of the all employee remuneration policy for 2022; • review of the Company’s gender pay gap data; and • monitoring the developments in the corporate governance environment and investor expectations. REMUNERATION IN 2021 At the Company’s Annual General Meeting (“AGM”) in May 2020, a new Directors’ remuneration policy was approved with 89% of votes in favour and an advisory vote on the Directors’ Remuneration Report for the year ended 2020 was approved at the 2021 AGM with 94% of votes in favour and continued to reflect the Group’s strategic priorities in 2021. The approach to reward supports the strategic objectives of the business. There are therefore no proposed changes to the approved policy for 2022, however the LTIP measures and award levels will be adjusted to provide greater alignment to profit growth and strategic objectives in 2022. These inclusions are explained further on page 95. The Board approved a challenging business plan for 2021. The measures for the STIP and LTIP were not adjusted during the year to take account of the impact on the economic environment. Despite these external challenges David Richardson and his team have delivered a strong set of results in 2021, demonstrated by the STIP outturn of 77% of maximum, moderated to 70.8%. This creates the overall pool fromwhich payments are made with individual allocations based on personal performance. Base salaries Salaries for Executive Directors are reviewed with effect from 1 April each year along with those of the overall employee population. As disclosed last year, the Executive Directors in post did not receive a salary increase on 1 April 2021, against an average increase received by other employees (excluding promotions) of 0.41%. Pension The Executive Directors received cash payments in lieu of the Company pension of 10% of salary, aligned to the contribution available to the majority of the wider workforce.
Organic Capital Generation (Pre Management Actions)
Organic Capital Generation (Post Management Actions)
Financial performance measure
IFRS New Business Profit
IFRS Adjusted Operating Profit
Management Expenses
Weighting 25% 25%
10% 25% 15%
Outturn £99m £225m £238m Achievement 25% 25% 7% 12% 8% £77m £183m
Strategic performance measure
Customer People
Adjustment
0% 0%
Aggregate scores: Corporate outturn
77%
Moderated outturn
70.8%
Award Level
Outturn
Difference
David Richardson
80% +3% 80% +3%
Andy Parsons
The Committee is satisfied that this level of bonus payout is reflective of the financial performance delivered and the significant progress made against the Company’s strategic objectives, balanced with the significant external challenges. Long Term Incentive Plan In March 2021, awards under the LTIP were made to David Richardson and Andy Parsons over shares worth 150% of base salary. These LTIP awards included organic capital generation at a weighting of 37.5%, with 25% of the LTIP measure based on total shareholder return (“TSR”) performance compared with the constituents of the FTSE 250 and adjusted earnings per share (“EPS”) performance for the remaining 37.5% of the LTIP.
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