GOVERNANCE REPORT
81
Illustration of how the 2020 Remuneration Policy will be implemented in 2021 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% payout of the maximum STIP opportunity (75% of salary) and 25% vesting under the LTIP (37.5% of salary) • Maximum = fixed pay plus maximum payout of the STIP (150% of salary) and maximum vesting under the LTIP (150% of salary) • Maximum + 50% growth = fixed pay plus maximum payout of the STIP (150% of salary), maximum vesting under the LTIP (150% of
Group Chief Financial Ocer 100%
Minimum
479
On-target
51% 33%
16%
945
Maximum
28% 36%
36%
1,724
Maximum 50% growth
23% 31%
46%
2,035
0
500
STIP LTIP 1,000 1,500 2,000 2,500 3,000 3,500
Remuneration (£’000)
Fixed pay
salary) and 50% share price growth on the LTIP Illustration of 2020 Remuneration Policy in 2021
ANNUAL REPORT ON REMUNERATION This report describes the remuneration for our Executive Directors and Non-Executive Directors and sets out how the remuneration policy has been used and, accordingly, the amounts paid relating to the year ended 31 December 2020. The report has been prepared in accordance with the provisions of the Companies Act 2006, the FCA’s Listing Rules and The Large and Medium- Sized Companies and Groups (Accounts and Reports) Regulations 2008, as amended. The report has also been prepared in line with the recommendations of the UK Corporate Governance Code. Various disclosures of the detailed information about the Directors’ remuneration set out below have been audited by the Group’s independent auditor, PwC LLP.
Group Chief Executive Ocer
Minimum
100%
681
On-target
1,352
50% 33% 17%
Maximum
28%
36%
36%
2,472
Maximum 50% growth
23%
31%
46% 2,919
0
500
STIP LTIP 1,000 1,500 2,000 2,500 3,000 3,500
Remuneration (£’000)
Fixed pay
Total single figure of remuneration (audited)
Total fixed remuneration
Total variable remuneration
Salary/fees
Benefits
Pension
STIP 5
LTIP 6,7
Other 8
Total
2020
2020
2020
2020 761 498
2020
2020
2020 677 504
2020 818 957
2020
£’000
2019
2019
2019
2019 680
2019
2019
2019 630
2019
2019
594 545
24 47
59 42
57
810 1,495 1,440
David Richardson
23
62
130 –
– – – – – – – – – –
415
– – – – – – – – –
459
– 1,461
Andy Parsons 1
– –
– – – – – – – – –
– – – – – – – – –
– – – – – – – – –
– – – – – – – – –
– –
– –
93
– – – – – – – –
– – – – – – – –
– – – – – – – –
93
– – – – – – – –
93
John Hastings-Bass 2 Chris Gibson-Smith 3
– – – – – – – –
– – – – – – – –
155 250
155
155
250
250
90 60 80 75 75 50
90 60 80 75 75 50
90 60 80 75 75 50
Keith Nicholson
89 60 79 75 75
89 60 79 75 75
89 60 79 75 75
Clare Spottiswoode
Paul Bishop Ian Cormack Steve Melcher
Michelle Cracknell 4
–
–
–
1 Andy Parsons was appointed as Chief Financial Officer with effect from 1 January 2020 and so the 2020 data represents a full year’s employment. 2 John Hastings-Bass was appointed Chair of the Company with effect from 13 August 2020 and his remuneration for 2020 represents his fees from this date. 3 Chris Gibson-Smith retired as Chair of the Group with effect from 13 August 2020 and his remuneration for 2020 represents his fees to this date. 4 Michelle Cracknell was appointed as a Non-Executive Director of the Company with effect from 14 May 2020 and her remuneration for 2020 represents her fees from this date. 5 From 2020, 40% of bonus payments (one-third in 2019) have been deferred into awards over shares under the Deferred Share Bonus Plan (“DSBP”) and will vest after three years. 6 Awards made under the LTIP in the period and the respective values will be reported on vesting in the respective Annual Report on Remuneration section. The LTIP in respect of the period 1 January to 31 December 2020 includes the 2018 LTIP awards. The 2018 LTIP award was earned but did not vest during 2020. For the purposes of valuation, the 2018 LTIP has been estimated based on a share price of £0.5271 (the average share price from 1 October to 31 December 2020) and includes the cash value of dividend equivalent shares. This estimate will be updated to reflect the actual valuation in next year’s report. The 2017 LTIP award, which vested in 2019, has been updated to reflect the actual share price at the time of vesting. 7 The estimate of value vesting under the 2018 LTIP shown represents vesting of 19.75% of maximum based on achievement of performance targets together with the cash dividend equivalent due. The share price used for this estimate of £0.5271 represents a decrease of 61%when measured against the original grant price of £1.336. 8 ‘Other’ relates to buy-out awards negotiated as part of Andy Parsons’ joining and set out on page 84 and paid to him in 2020. Benefits include an executive allowance for which the executives can purchase their own benefits, for example private medical cover, together with Company paid benefits of life assurance, permanent health insurance and a health assessment every two years.
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