Just group PLC | Annual Report and accounts 2022
DIRECTORS’ REMUNERATION REPORT continued
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 2022 of 2% for the CEO and 1.9% for the CFO, against an average increase received by other employees (excluding promotions and joiners shortly prior to year end) of 3.2%. 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. In October 2022, one-off payments were made to over 65% of our UK based colleagues to support with the cost of living. Employees with an annual base salary of less than £50,000 received a one-off payment of £1,200 and those with a salary of between £50,000 and £60,000 received a one-off payment of £600. Further support in relation to salary advances and interest free loans were also made available to employees facing financial hardship. 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 105 details the targets and outcomes relating to 2022. For performance in 2022 the Committee approved awards for David Richardson and Andy Parsons at 75% 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 out-turn. 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. No payments were made to past Directors. Share options that were retained post-termination and vested during the year to Rodney Cook and Simon Thomas are disclosed later in the report 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 2022. 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 105.
We have continued to ensure Board members and colleagues have opportunities to connect and share information throughout the year. The sessions have covered multiple topics including the role of the Board in guiding our organisation and our approach to reward, specifically how executive remuneration aligns with that of our colleagues across the Group. REMUNERATION COMMITTEE 2022 The Committee is made up exclusively of Independent Non-Executive Directors. 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 and Director’s Remuneration Policy for 2023; • approval of the grant of the 2022 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 2022 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 2023; • review and approval of share schemes; • 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 2022 At the Company’s Annual General Meeting (“AGM”) in May 2020, a new Directors’ remuneration policy was approved with 89% of votes in favour and an advisory vote on the Directors’ Remuneration Report for the year ended 2021 was approved at the 2022 AGM with 89% of votes in favour and continued to reflect the Group’s strategic priorities in 2022. 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 2022, the financial measures within the scorecard for the Group STIP were changed to reflect the focus on profitable and sustainable growth. Changes were also made to the measures in the LTIP by replacing the adjusted earnings per share (“EPS”) measure with return on equity (“ROE”) aligned with the strategic KPIs being used, and with the inclusion of an ESG measure. 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 2022. The measures for the STIP and LTIP were not adjusted during the year to take account of the impact on the economic environment. Despite these external challenges David Richardson and his team have delivered a strong set of results in 2022, demonstrated by the STIP outturn of 66.7% of maximum. This creates the overall pool from which payments are made with individual allocations based on personal performance.
Financial performance measure
IFRS new business profit
IFRS operating profit
Underlying organic capital generation
Weighting
40%
20%
40%
Outturn
£233m 19.2%
£336m £29m 20.0% 19.2%
Achievement
Strategic performance measure
Customer
People
Adjustment
3.8%
4.6%
Aggregate Scores
Corporate outturn 66.7% Moderated outturn 66.7%
Outturn
Award Level
Difference
David Richardson
75% 75%
+8.3% +8.3%
Andy Parsons
96
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