102 | Just Group PLC | Annual Report and Accounts 2023
DIRECTORS’ REMUNERATION REPORT continued
Long Term Incentive Plan As reported in last year’s report, in March 2023, awards under the LTIP were made to David Richardson and Andy Parsons over shares worth 200% and 175% of base salary respectively. These LTIP award measures included organic capital generation at a weighting of 15%, total shareholder return (“TSR”) performance compared with the constituents of the FTSE 250 at 25%, return on equity at 45% and environmental, social and governance (“ESG”) performance at 15% of the LTIP. The LTIP awards made in 2021 are due to vest in March 2024 with reference to performance to 31 December 2023. The TSR performance condition was achieved at 100%, the adjusted EPS condition was achieved at 100%, and organic capital generation was achieved at 95%. Therefore 98% of the 2021 LTIP awards will vest in March 2024. The Committee felt that outturns under the LTIP in respect of 2023 were appropriate and did not exercise discretion. CHANGE OF CFO During the year, Andy Parsons decided to retire as our CFO. He continued in role until 1 December 2023 when he was succeeded by Mark Godson. Andy continued to serve on the Board and as an Executive Director until his retirement on 31 December 2023. Andy continued to receive his normal remuneration for 2023 and, on retirement, is regarded as a good leaver under our remuneration policy. He receives a bonus for 2023 in the normal way (including 40% being deferred into shares for a further three years) and will retain his outstanding LTIP and Deferred Bonus share awards until their normal maturity with the LTIP awards subject to performance assessment at that time. Consistent with good practice, the LTIP awards will be further reduced to reflect time pro-rating for the period not worked. He will also be required to retain shares for a period of two years post-retirement in accordance with the policy. He has not received any termination payments. Mark Godson joined the Group as CFO Designate on 6 November 2023 and joined the Board and became CFO with effect from 1 December 2023. His package is set moderately below that of his predecessor’s with a starting salary of £400,000 and from 2024 onwards a bonus and LTIP opportunity of 150% of salary (compared with 150% and 175% respectively for his predecessor). It is anticipated that his salary and LTIP opportunity will increase as he becomes more experienced in his role. IMPLEMENTATION OF THE REMUNERATION POLICY FOR 2024 The policy was approved at the 2023 AGM with 95% support from shareholders and is felt to continue to serve the Company well. The Committee considers that the arrangements remain clear, simple, predictable, proportionate, aligned to culture, values and purpose and mitigate risk, as required by paragraph 40 of the Corporate Governance Code. This will be kept under periodic review. The Committee agreed that David Richardson would receive a salary increase with effect from 1 April 2024 of 10%. He has now served as CEO for five years and is considered high performing and fully experienced. At the time of his appointment it was envisaged that his salary would be aligned with that of his predecessor (£680k in 2019) as he grew into the role. The impact of COVID slowed down the Committee’s decision which has been implemented now to reflect the strong financial footing which the Company has achieved. As Mark Godson had only recently joined the Company, he was not considered for a similar increase. The CEO’s increase is above those awarded to most colleagues with the salary increase budget available for the general employee population eligible to be considered for an increase sitting at 4.5%, with individual increases varying within a range, depending on a number of factors. Having considered both external benchmark data and relative pay levels across the Company, the Committee considers this increase to be appropriate.
SUMMARY OF REMUNERATION FOR DAVID RICHARDSON IN RESPECT OF 2023
(£000)
Salary
630
Benefits Pension
28 63
VARIABLE DEFERRED 47%
STIP – cash
515 344 776
FIXED CASH 31%
STIP – deferred
LTIP
VARIABLE CASH 22%
SUMMARY OF REMUNERATION FOR ANDY PARSONS IN RESPECT OF 2023
(£000)
Salary
437
Benefits Pension
24 44
VARIABLE DEFERRED 48%
STIP – cash
318 212 540
FIXED CASH 32%
STIP – deferred
LTIP
VARIABLE CASH 20%
SUMMARY OF REMUNERATION FOR MARK GODSON IN RESPECT OF 2023
63 (£000)
Salary
Benefits Pension
4 6
VARIABLE DEFERRED 0%
FIXED CASH 100%
VARIABLE CASH 0%
The remuneration figures for Mark Godson are from his appointment date as CFO Designate on 6 November 2023.
A decision was taken not to take a tiered approach to budget allocation for this year’s pay review. This was in response to the improving economic situation, notably slowing inflation. Whilst the potential for an economic downturn persists due to ongoing geo-political uncertainty the case to revert to a flat approach was deemed appropriate. The Committee have increased the organic capital generation target for 2021 due to IFRS17 and strategic costs. The organic capital targets for the 2022 and 2023 targets have also been increased to reflect IFRS17 and strategic costs and in addition the 2022 organic capital outturn will be adjusted to reflect the ambitious growth targets set by the board and the impact on organic capital generation.
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