Strategic Report | Governance | Financial Statements | 101
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 received a salary increase on 1 April 2023 of 4.5% for the CEO and the CFO, against an average increase received by other employees (excluding promotions and joiners shortly prior to year end of 6.0%. Due to rising living costs as a result of high inflation, a tiered approach to the salary review was used, resulting in higher percentage increases for those on lower salaries. It was decided that no one-off payments should be made in relation to cost of living in 2023. This was in response to the support provided in 2022 and the sharp fall in the rate of inflation. The business did however continue to provide support to employees in short-term financial difficulty in the form of access to salary advances and interest-free loans. 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. Short Term Incentive Plan Page 106 details the targets and outcomes relating to 2023. For performance in 2023 the Committee approved awards for David Richardson at 90% 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 to adjust the outturn. The Committee is satisfied that this level of bonus pay out is reflective of the financial performance delivered and the significant progress made against the Company’s strategic objectives, balanced with the significant external challenges. 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 2023. 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 107.
REMUNERATION COMMITTEE 2023 The terms of reference of the Committee are available at www.justgroupplc.co.uk/investors/shareholder-information/ board-and-committee-governance. 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 2023 awards and performance conditions under the Long Term Incentive Plan (“LTIP”); • approval of the grant of share options under the all-employee Sharesave scheme (“SAYE”); • assessment of the performance of the Executive Directors against the 2023 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; • review and approval of bonus plans across the Group, where they are not aligned to the Group Short Term Incentive Plan (“STIP”) or the LTIP; • review and approval of the all-employee remuneration policy for 2024; • review of the Company’s gender and ethnicity pay gap data; and • monitoring the developments in the corporate governance environment and investor expectations. REMUNERATION IN 2023 Consistent with the approach adopted each year and as reported last year, the Committee considers the performance measures attached to the bonus plan and to the LTIP to ensure they remain aligned with both our strategic priorities and approach to risk mitigation. Accordingly, in 2023, the strategic measures within the scorecard for the Group STIP were changed to reflect the focus on profitable and sustainable growth. As such, the Committee is satisfied that the approach to reward continues to support the strategic priorities of the business and aligns with Company purpose and our values. The Board approved a challenging business plan for 2023. David Richardson and his team have delivered a strong set of results in 2023, demonstrated by the STIP outturn of 100% of maximum. This creates the overall pool from which payments are made with individual allocations based on personal performance.
Financial performance measure
New business profit
Underlying operating profit
New business strain
Weighting
40%
30%
30% 0.9%
Outturn
£355m £377m
Achievement
40%/40% 30%/30% 30%/30%
Strategic performance measure Achievement 1 Adjustment
Customer
People
(0.9)%
1.9%
–
–
Aggregate Scores Corporate outturn
100.0% 100.0%
Moderated outturn
Difference from maximum 2
Outturn
Award level
David Richardson
90% 80%
-10% -20%
Andy Parsons
1 T he strategic performance measures did not affect the financial outturn of 100% due to reaching the limit on the corporate outturn of 100%. 2 Outturn includes the impact of personal performance, see page 107.
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