Strategic Report | Governance | Financial Statements | 103
The maximum STIP opportunity continues to be 150% of base salary for Executive Directors, subject to stretching corporate financial and personal non-financial measures. The core bonus opportunity is determined through a basket of financial and strategic performance measures and is then distributed to Executive Directors against their achievement of their personal objectives. The Committee anticipates making awards under the LTIP over shares worth 200% of salary to David Richardson and 150% of salary to Mark Godson in 2024. Performance will continue to be measured over a three-year period. The Policy allows the Committee some discretion to make adjustments to the performance conditions and weightings from year to year. For the LTIP awards to be made in 2024, there have been some changes to measures: • We have replaced Organic Capital Generation with Cash Generation so that this metric aligned to strategic objectives is not constrained by new business growth. • Including the investment emissions target which aligns to an already existing external commitment made by Just. The main impact that Just can make on the environment is through its investments. For the 2024 STIP performance year, there will continue to be three performance measures focusing on profitable growth. The Committee has approved the following: • Group STIP: The structure remains unchanged from 2023. • For the Business units: A new additional adjuster has been approved for 2024, which is to now have a strategic customer measure for each business unit. The bonus pool is to be created based on 50% of Group performance, and 50% on the performance of the respective business unit. The business unit performance is calculated by applying the business unit financial performance modifiers first and then this is further adjusted by the +/-15% business unit strategic customer modifiers. If the business unit outturn is already at maximum this can only be a neutral or downward adjustment. Chair’s concluding comments I hope you will agree that we have struck an appropriate balance between retaining and motivating both the Executive Directors and, indeed, the wider workforce and aligning their interests with those of our shareholders and other stakeholders. I continue to make myself available to discuss these arrangements with key stakeholders and welcome feedback. I hope that you will support the resolution at the AGM on the Directors’ Remuneration Report (excluding policy summary).
COMPONENTS OF REMUNERATION Illustration of 2024 Remuneration policy
Under the Directors’ Remuneration policy, a significant proportion of total remuneration is linked to Group performance. The following charts illustrate how the Executive Directors’ total pay package varies under four different performance scenarios: • Minimum = fixed pay only (salary + benefits + pension allowance) • On-target = fixed pay plus 50% pay out of the maximum STIP opportunity (75% of salary) and 25% vesting under the LTIP (50% and 37.5% of salary for the CEO and CFO respectively) • Maximum = fixed pay plus maximum pay out of the STIP (150% of salary) and maximum vesting under the LTIP (200% and 150% of salary for the CEO and CFO respectively) • Maximum + 50% growth = fixed pay plus maximum pay out of the STIP (150% of salary), maximum vesting under the LTIP (200% and 150% of salary for the CEO and CFO respectively) and 50% share price growth on the LTIP
Group Chief Executive Ocer
100%
790
Minimum
47% 32% 21%
1,665
On-target
25%
32%
43%
Maximum
3,240
Maximum 50% growth
20%
27%
53% 3,940
Fixed pay LTIP 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 0 500 STIP
Remuneration (£’000)
Group Chief Financial Ocer
100%
460
Minimum
51%33% 16%
910
On-target
28% 36% 36%
Maximum
1,660
Maximum 50% growth
23% 31%
46%
1,960
1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 0 500
Remuneration (£’000)
STIP
LTIP
Fixed pay
Considering the policy The Committee continues to consider the policy against a number of different factors, including maintaining a link with the broader remuneration framework to ensure consistency and common practice across the Group, and in determining the overall levels of remuneration of the Executive Directors, the Committee also pays due regard to pay and conditions elsewhere in the organisation. In particular, the Committee takes an active role in approving the remuneration of senior executives, which covers eight roles in addition to the Executive Directors across the Group. The Committee also dedicates time, through a standing agenda item, to consider wider workforce pay policies and pay structures throughout the Group and this includes consideration of the number of incentive plans in operation, pension provisions across the Group and the annual pay review process.
MICHELLE CRACKNELL Chair, Remuneration Committee 7 March 2024
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