JUST GROUP PLC Annual Report and Accounts 2020
82
Directors’ remuneration report continued
2020 FIXED PAY (AUDITED) Base salaries David Richardson’s base salary was increased by 2.05%with effect from 1 April 2020 from £585,000 to £597,000. This increase was lower than the average salary increments paid in April 2020 for the wider workforce of 2.42%. Andy Parsons was appointed Group Chief Financial Officer with a base salary of £415,000 with effect from 1 January 2020 and this was not reviewed in the year. Benefits and pension Benefits include an executive allowance for which the executives can purchase their own benefits, for example private medical cover. The Company also provides permanent health insurance, life assurance and biennial health screening benefits.
In addition, Andy Parsons received a travel allowance of £25,000 in 2020 as part of his first year’s remuneration package.
The Executive Directors each received a cash payment in lieu of the Company pension of 10% of salary, in line with the contribution rate offered to the majority of the wider workforce. Non-Executive Directors’ fees The fees for the Non-Executive Directors in 2020 are as detailed in the table below:
£’000
Fee
Board Chair
200
Basic fee
60 10 20 15
Additional fee for Senior Independent Director
Additional fee for Committee Chair, Risk and Audit Committees Additional fee for Committee Chair, all other Committees
The Board Chair receives a single, all-inclusive fee for the role.
2020 EXECUTIVE DIRECTORS’ SHORT TERM INCENTIVE PLAN (AUDITED) The 2020 bonus outturn was calculated on corporate financial performance measures, split across four measures, and moderated by non-financial performance measures. The bonus is distributed on personal performance based on objectives agreed with the Remuneration Committee each year. In line with our policy, 40% of the 2020 STIP award will be deferred into nil cost options (DSBP), subject to continued employment and clawback/malus provisions.
Estimated number of shares deferred under DSBP 1
Bonus (balanced scorecard) 85%of maximum 80%of maximum
Cash STIP (£’000)
Deferred STIP (£’000)
David Richardson
£457 £299
£304 £199
577,632 377,916
Andy Parsons
1 The estimated number of shares deferred under the DSBP were determined using the average closing share price between 1 October 2020 and 31 December 2020, being £0.5271. The actual number of shares will be confirmed in the RNS at the time of grant and updated in next year’s Directors’ Remuneration Report. The performance outcome against the targets set for the 2020 STIP was as follows: Core bonus (balanced scorecard) Weighting Threshold (25%) On-target (50%) Maximum (100%) Actual % achieved Organic capital generation 50% £20m £65m £110m £221m 50.0% Cost base reduction 20% £8m £13m £18m £17m 17.4% IFRS new business profit 15% £170m £200m £230m £199m 7.4% IFRS operating profit 15% £140m £185m £220m £239m 15.0% Total – – – – 89.8% As explained earlier in the report, the strategic measures reduced the financial outturn by 2.5% to a corporate outturn of 87.3%. The corporate outturn was then adjusted to reflect personal achievement. Both Executives were assessed to have substantially met all of their objectives and their individual outturns were modestly moderated to 85% (-2.3%) for the Chief Executive and 80% (-7.3%) for the Chief Financial Officer. Risk consideration The Committee reviewed a comprehensive report from the Group Chief Risk Officer to ascertain that the Executive Directors’ objectives had been fulfilled within the risk appetite of the Group. In addition, the Committee received feedback from the Group Chief Risk Officer that there were no material issues to consider around regulatory breaches, customer outcomes or litigation that would prevent payment of any STIP award or trigger any malus provisions. Taking into account the risk assessment and the wider context in the year, including the experience of customers, employees and shareholders, the Committee was satisfied that the STIP awards should be paid.
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