84 JUST GROUP PLC Annual Report and Accounts 2019
DIRECTORS’ REMUNERATION report continued
• Pensions – reduced the pension allowance for current and any future Executive Directors from 15% of salary to 10% of salary to align with the majority of Just Group employees • Benefits – introduced additional flexibility to pay certain relocation and/or travel benefits as considered necessary to facilitate an appointment • Short Term Incentive Plan (“STIP”) – increased the portion which is deferred into shares to 40% (from one-third previously), increasing alignment with shareholders and reflecting best practice for financial service companies. Some changes are proposed to the balance and use of performance measures • Long Term Incentive Plan (“LTIP”) – reduced the normal award level for the Chief Executive Officer to 150% of salary, in line with the award levels for other Executive Directors. An additional measure (a sustainable capital model) will be added for the 2020 award • Shareholding guidelines – extended beyond cessation, with the full guideline continuing to apply for two years following cessation of employment. Deferred bonus shares granted and shares granted under the LTIP which have vested but are subject to a holding period will count towards these guidelines.
DIRECTORS’ REMUNERATION POLICY The Directors’ Remuneration Policy sets out the Group’s remuneration policy for its Executive and Non-Executive Directors. The Policy has been developed taking into account the principles of the UK Corporate Governance Code, guidelines from major investors and guidance from the UK regulators, the Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”), on best practice. The existing Policy was approved by shareholders at the 2017 AGM and following three years of its use we are required to submit a new Policy for shareholder approval at the 2020 AGM. SUMMARY OF PROPOSED CHANGES IN POLICY The proposed Policy was developed to meet the evolving needs of the business and to keep pace with changes in best practice, particularly in relation to the new UK Corporate Governance Code. A summary of the changes is set out as follows:
COMPONENTS OF REMUNERATION Executive Directors Element
Purpose and link to strategy
Operation (including framework used to assess performance) Opportunity
Provides a competitive and appropriate level of basic fixed pay to help recruit and retain Directors of a sufficiently high calibre. Reflects an individual’s experience, performance and responsibilities within the Group.
Set at a level which provides a fair reward for the role and which is competitive amongst relevant peers. Normally reviewed annually with any changes taking effect from 1 April. Set taking into consideration individual and Group performance, the responsibilities and accountabilities of each role, the experience of each individual, his or her marketability and the Group’s key dependencies on the individual. Reference is also made to salary levels amongst relevant insurance peers and other companies of equivalent size and complexity. The Committee considers the impact of any basic salary increase on the total remuneration package. Each Executive Director currently receives an annual benefits allowance in lieu of a company car, private medical insurance and other benefits. In addition, each Executive Director receives life assurance and permanent health insurance. The benefits provided may be subject to minor amendment from time to time by the Committee within this Policy. Travel and/or relocation benefits (and any tax thereon) may normally be paid up to a period of 12 months following the recruitment of a new Executive Director. The Group operates a money purchase pension scheme into which it contributes, having regard to government limits on both annual amounts and lifetime allowances. Where the annual or lifetime allowances are exceeded, or in certain other circumstances, the Group will pay cash in lieu of a Company contribution.
In normal circumstances, base salaries for Executive Directors will not increase by more than the average increase for the broader employee population. More significant increases may be awarded from time to time to recognise, for example, development in role or a change in position or responsibilities.
BASE SALARY
Provides competitive, appropriate and cost- effective benefits.
The benefits allowance is subject to an annual cap of £20,000, although this may be subject to minor amendment to reflect changes in market rates. The cost of the other insurance benefits varies from year to year and there is no prescribed maximum limit. However, the Committee monitors annually the overall cost of the benefits provided to ensure that it remains appropriate. The cost of any travel and relocation benefits The maximum Company contribution (or cash in lieu) is 10% of base salary. This is aligned to the contribution available to the majority of the workforce. This limit may change to reflect any changes in the contributions available to the majority of the workforce. will vary based on the particular circumstances of the recruitment.
BENEFITS
Provides for retirement planning, in line with the provisions available to the broader employee population.
PENSION
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