TERMS OF REFERENCE
1.1. The Committee shall comprise at least two members, each of whom shall be independent Non‐Executive Directors. The Chair of the Board may also serve on the Committee as an additional member if they were considered independent on appointment as Chair.
1.2. Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chief Executive Officer, the Group HR Director and external advisers may be invited to attend for all or part of any meeting, as and when appropriate.
1.3. Appointments to the Committee are made by the Board on the recommendation of the Nomination Committee and consultation with the Chair of the Remuneration Committee and shall be for a period of up to three years which may be extended as long as members (other than the Chair of the Board, if they are a member of the Committee) continue to be independent.
1.4. The Board shall appoint the Committee Chair who shall be an independent Non‐ Executive Director who should have served on a remuneration committee for at least 12 months. In the absence of the Committee Chair and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting who would qualify under these terms of reference to be appointed to that position by the Board. The Chair of the Board shall not be Chair of the Committee.
2.1 The Deputy Company Secretary or their nominee shall act as secretary of the Committee and will ensure that the Committee receives information and papers in a timely manner to enable full and proper consideration to be given to the issues.
3.1. The quorum necessary for the transaction of business shall be two members of the Committee.
4. Frequency of Meetings
4.1. The Committee shall meet at least three times a year and otherwise as required.
5. Notice of Meetings
5.1. Meetings of the Committee shall be called by the secretary of the Committee at the request of the Committee Chair or any of its members.
5.2. Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed shall be forwarded to each member of the Committee and any other person required to attend no later than three working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees, as appropriate, at the same time.
6. Minutes of Meetings
6.1. The secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
6.2. Draft minutes of Committee meetings shall be circulated promptly to all members of the Committee. Once approved, minutes should be circulated to all other members of the Board unless, exceptionally, it would be inappropriate to do so.
7. Engagement with shareholders
7.1. The Committee Chair shall attend the Annual General Meeting to answer any shareholder questions on the Committee’s activities. In addition, the Committee Chair should seek engagement with shareholders on significant matters related to the Committee’s area of responsibility.
The Committee should carry out the duties detailed below for the parent company, major subsidiary undertakings and the Group as a whole, as appropriate.
The Committee shall:
8.1. Have delegated authority for determining the policy for Director’s remuneration and setting remuneration for the Company’s Chair and Executive Directors and senior management1, including the Company Secretary, and such other individuals where the package of benefits is greater than £100,000 as it is designated to consider;
8.2. Establish remuneration schemes that promote long-term shareholding by Executive Directors that support alignment with long-term shareholder interests;
8.3. Design remuneration policies and practices to support strategy and promote long-term sustainable success, with Executive remuneration aligned to Company purpose and values, clearly linked to the successful delivery of the company’s long-term strategy, and that enable the use of discretion to override formulaic outcomes and to withhold sums or share awards under appropriate specified circumstances;
8.4. When determining Executive Director remuneration policy and practices, consider the UK Corporate Governance Code 2018 (“Code”) requirements for clarity, simplicity, risk mitigation, predictability, proportionality and alignment to culture;
8.5. No Director or senior manager shall be involved in any decisions as to their own remuneration outcome. The Board itself should determine the remuneration of the Non-Executive Directors;
1 Senior management – Roles reporting directly to CEO/CFO
8.6. In determining remuneration policy, take into account all other factors which it deems necessary including relevant legal and regulatory requirements, the provisions and recommendations of the Code and associated guidance. The objective of such policy shall be to attract, retain and motivate Executive management of the quality required to run the Company successfully without paying more than is necessary, having regard to views of shareholders and other stakeholders;
8.7. Review the ongoing appropriateness and relevance of the remuneration policy;
8.8. Within the terms of the agreed policy and in consultation with the Chair and/or Chief Executive as appropriate, determine the total individual remuneration package of each Executive Director, the Company Chair and senior management including bonuses, incentive payments, LTIPs and other share awards. The choice of financial, non-financial and strategic measures is important, as is the exercise of independent judgement and discretion when determining remuneration awards, taking account of company and individual performance, and wider circumstances;
8.9. Have full authority to appoint remuneration consultants and to commission or purchase any reports, surveys or information which it deems necessary at the expense of the company. However the Committee should avoid designing pay structures based solely on benchmarking to the market or on the advice of remuneration consultants;
8.10. Review the design of all share incentive plans for approval by the Board and, where required, shareholders. For any such plans, determine each year whether awards will be made, and if so, the overall amount of such awards, the individual awards for Executive Directors and senior managers, and the performance targets to be used;
8.11. Review workforce remuneration and related policies; and
8.12. Work and liaise as necessary with other Board committees, ensuring the interaction between committees and with the Board is reviewed regularly.
9. Reporting Responsibilities
9.1. The Committee Chair shall report formally to the Board after each meeting on the nature and content of its discussion, recommendations and action to be taken;
9.2. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed, and adequate time should be available for Board discussion when necessary;
9.3. The Committee shall provide a description of its work in the annual report in line with the requirements of the Code;
9.4. The Committee shall also ensure that provisions regarding disclosure of information as set out in the Code are fulfilled, and that a Remuneration Report is included in the Company’s annual report and put to shareholders for approval at the AGM as necessary; and
9.5. If the Committee has appointed remuneration consultants, the consultant should be identified in the annual report alongside a statement about any other connection it has with the Company or individual Directors.
The Committee shall:
10.1. At least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval;
10.2. Ensure that a periodic evaluation of the Committee’s own performance is carried out;
10.3. Have access to sufficient resources in order to carry out its duties, including access to the company secretariat for advice and assistance as required;
10.4. Be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members; and
10.5. Give due consideration to laws and regulations, and the provisions of the Code and published guidelines or recommendations regarding the remuneration of company directors and the formation and operation of share incentive plans, the requirements of the FCA Listing Rules. Prospectus rules, Disclosure Guidance and Transparency Rules sourcebook, and any other applicable rules, as appropriate.
11.1. The Committee is authorised by the Board to obtain, at the Company’s expense, outside legal or other professional advice on any matters within its terms of reference.