Just Annual Report and Accounts 2022

STRATEGIC REPORT

FINANCIAL STATEMENTS

Governance

Long Term Incentive Plan In March 2022, awards under the LTIP were made to David Richardson and Andy Parsons over shares worth 200% and 175% of base salary respectively. These LTIP awards included underlying organic capital generation at a weighting of 25%, total shareholder return (“TSR”) performance compared with the constituents of the FTSE 250 at 30%, return on equity at 35% and environmental, social and governance (“ESG”) performance for the remaining 10% of the LTIP. The LTIP awards made in 2020 are due to vest in May 2023 with reference to performance to 31 December 2022. The threshold TSR performance condition was achieved at 71.5%, the adjusted EPS condition was achieved at 100% and the capital self-sufficiency was achieved at 100%. Therefore 93% of the 2020 LTIP awards will vest in May 2023. The Committee felt that outturns under the STIP and LTIP in respect of 2022 were appropriate and did not exercise discretion. In this regard, the Committee noted institutional shareholder guidelines have been updated to ask for disclosure of the issues considered in allowing grants made in the immediate aftermath of COVID to vest. The first lockdown started on 23 March 2020, which was the same date as the grant of the LTIP awards, using a 5 day average price (consistent with past practice) of 52.42p. If the Group had delayed the grant to the 5 dealing days following lockdown, it would have been 51.60p and, therefore, not materially different. The Committee noted that: • The price used was slightly less than 20% below the price used for the 2019 grant and was not, therefore, material within the various guidelines. • The prior policy was to grant the CEO’s LTIP at 200% of salary and the then new 2020 policy was a 150% grant level, which reflected the share price at grant. • Compared with 2019 (and pre-Covid) the financial performance to the end of 2022 was at least consistent with the change in share price. • The performance conditions had been set at an earlier meeting and were not adjusted for COVID so continued to reflect our pre-COVID aspirations. The performance achieved, therefore, reflects genuine out-performance and there was no ‘windfall’ gain under the LTIP. In addition, the vesting achieved was broadly consistent with the financial achievement compared with the pre-COVID position. Summary of remuneration for David Richardson in respect of 2022

IMPLEMENTATION OF THE REMUNERATION POLICY FOR 2023 For the reasons set out as part of the policy review, 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 both David Richardson and Andy Parsons would receive a salary increase with effect from 1 April 2023 of 4.5%. This figure is below 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 6%, with individual increases varying within a range, depending on a number of factors. Similar to the approach taken in 2021, the salary increase budget was set at different levels depending on employee base salary. For employees on a base salary of £49,999 or less per annum, the budget was 7%, for those with a salary of between £50,000 and £99,999 the budget was 6% and those with a salary of over £100,000, the budget was 5%. Having considered both external benchmark data and relative pay levels across the Company, the Committee considers these increases to be appropriate. 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. In line with 2022, the Committee anticipates making awards under the LTIP over shares worth 200% of salary to David Richardson and 175% of salary to Andy Parsons in 2023. 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 2023, there have been some minor changes to the conditions and their weightings. There will be four performance conditions and the associated targets are disclosed on page 114. The Committee has approved the following changes: • amending the condition from underlying organic capital generation to organic capital generation (including management actions) and reducing the weighting from 25% to 15% considering this condition to better reflect our strategic priorities; • reducing the weighting for relative TSR from 30% to 25% • increasing the weighting for return on equity (“ROE”) from 35% to 45% to reflect our increased focus on returns following the Company’s return to capital self-sufficiency; and • increasing the weighting for the ESG condition from 10% to 15% with amended targets to include: Net zero by 2025 and investment into sustainable assets as per the 2022 measure. As a result, the following performance conditions will apply to the 2023 LTIP award: • Organic capital generation 15% • Relative TSR vs FTSE 250 (excluding investment trusts) 25% • ROE 45% • ESG 15% This combination of conditions is felt to reflect the business strategy and objectives over the next three year period. For the 2023 STIP performance year, there have been some changes to reflect the increasing focus of the Group on profitable growth. There will continue to be three performance measures. The Committee has approved the following: • leaving the IFRS New Business Profit measure and weighting unchanged • replacing IFRS Operating Profit with Underlying Operating Profit and increasing the weighting to 30% • replacing Underlying Organic Capital Generation with New Business Strain to ensure new business is written with low capital strain and hence low capital consumption, ensuring continued strong internal rate of return (“IRR”) for capital used to fund new business. As a result of the above, the following performance measures will apply to the 2023 STIP award:

(£’000)

Salary

609

variablE deferred 55%

fixed casH 28%

Benefits Pension

24 61

STIP – cash

274 411

STIP – deferred

variable casH 17%

LTIP

1,088

Summary of remuneration for Andy Parsons in respect of 2022