JUST GROUP PLC Annual Report and Accounts 2019
96
Directors’ remuneration report continued
Percentage annual change in the Group Chief Executive Officer’s pay compared to that for Just employees (unaudited) The table below shows the percentage change in each of the Group Chief Executive Officer’s salary, taxable benefits and STIP earned between 2018 and 2019, compared to that for the average employee of the Group (on a per capita basis).
Percentage change between 2018 and 2019 Base salary Benefits
Annual bonus
Group Chief Executive Officer 1
(7.45)%
0% (25.59)% 2.91% 2.87%
4.38%
Average employee 2
1 The percentage change for the Group Chief Executive Officer has been calculated using Rodney Cook’s pay for the year ended 31 December 2018 and, for the year ended 31 December 2019, the total of pay for Rodney Cook to 30 April 2019 and pay for David Richardson from 1 May 2019 to 31 December 2019. 2 All permanent employees in the UK who were in employment during the two calendar year periods of 2018 and 2019 were selected as the most appropriate comparator. Relative importance of spend on pay (unaudited) The table below illustrates the relative importance of spend on pay compared to shareholder dividends paid.
Year ended 31 December 2019
Year ended 31 December 2018
% difference
108.1
Total personnel costs (£m)
118.7
(8.9)% (100)%
–
Dividends paid (£m)
24.4
Implementation of the remuneration policy in 2020 for Executive Directors (unaudited)
• David Richardson, CEO: £597,000 • Andy Parsons, CFO: £415,000
BASE SALARY
David Richardson’s salary increased by 2.05% from 1 April 2020, compared to 2.42% for the wider workforce. Andy Parsons was not eligible to be considered for a salary increase. The Executive Directors will receive a benefits allowance of £20,000 for 2020 and a Company pension contribution or cash in lieu of 10% of salary. In addition, Andy Parsons will receive a travel allowance of £25,000 in 2020 to facilitate his joining Just Group. All employees are enrolled into the Company Group Life Assurance and Group Income Protection schemes. Maximum STIP opportunity remains unchanged at 150% of salary for Executive Directors. 50% of maximum will pay out for on-target performance. The core bonus for 2020 will be determined by a balanced scorecard of performance against financial and strategic measures, being IFRS adjusted operating profit, IFRS new business profit, cost base reduction, and organic capital generation. The core bonus is modified based on personal performance during the year. While not expected in the normal course, the Committee retains the flexibility to pay up to 20% of the maximum bonus opportunity based on personal performance only. The Committee has chosen not to disclose in advance details of the STIP performance targets for the forthcoming year as these include items which the Committee considers commercially sensitive. An explanation of bonus payouts and performance achieved will be provided in next year’s Annual Report on Remuneration. 40% of any bonus earned will be deferred for three years into awards over shares under the Deferred Share Bonus Plan. Awards will be made over shares with a face value of 150% of salary in 2020 to both the CEO and CFO. The awards made in 2020 will be subject to the measures below, calculated over the three financial years to 31 December 2022, and will be subject to a further two year post-vesting holding period. Targets will be confirmed in the RNS at time of grant. Measures will be as follows: • 50% based on capital self-sufficiency (25% solvency capital ratio and 25% organic capital generation) • 25% on relative Total Shareholder Return (“TSR”) – subject to TSR performance relative to FTSE 250 companies, excluding investment trusts • 25% on adjusted EPS
BENEFITS AND PENSIONS
SHORT TERM INCENTIVE PLAN (“STIP”)
LONG TERM INCENTIVE PLAN (“LTIP”)
APPROVAL This report was approved by the Board of Directors on 11 March 2020 and signed on its behalf by:
Ian Cormack Chair, Remuneration Committee 11 March 2020
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