Terms of Reference
The Committee shall be appointed by the Board, on the recommendation of the Nomination Committee and in consultation with the Chairman of the Remuneration Committee. The Committee shall be made up of at least three independent non-executive directors. The Chairman of the Board may also serve on the Committee as an additional member if he or she was considered independent on appointment as Chairman.
Appointments to the Committee shall be for a period of up to three years, which may be extended for two further three year periods, provided the director still meets the criteria for membership of the Committee.
The Board shall appoint the Committee Chairman who shall be an independent non-executive director. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting. The Chairman of the Board shall not be Chairman of the Committee.
The quorum necessary for the transaction of business shall be two. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
The Company Secretary shall act as secretary of the Committee.
2. Attendance at meetings
Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chief Executive, Group HR Director and external advisers may be invited to attend for all or part of any meeting as and when appropriate.
Members of the Committee should meet at least annually without the Chairman present to discuss his performance and on such other occasions as are deemed appropriate.
The Chairman of the Board (if not already a member of the Committee) and the Chief Executive shall be invited by the Committee to attend meetings to discuss the performance of the other executive directors and to make proposals as necessary. The Committee may consult with other non-executive directors in its evaluation of the Chief Executive Officer’s performance.
No director shall be present at any part of the meeting when his own remuneration is being discussed.
3. Frequency of meetings
The Committee shall meet not less than three times a year and at such other time as the Chairman of the Committee shall require.
Notice of meetings shall be given to all Committee members, to the Chairman of the Board, the Chief Executive, all other non-executive directors and any other person required to attend.
The Committee is authorised by the Board to seek any information it requires from any employee of the Company in order to perform its duties.
In connection with its duties the Committee is authorised by the Board, at the Company’s expense:
- to obtain any outside legal or other professional advice;
- within any budgetary restraints imposed by the Board, to appoint remuneration consultants, and to commission or purchase any relevant reports, surveys or information which it deems necessary to help fulfil its duties.
The Committee shall:
- determine and agree with the Board the framework or broad policy for the remuneration of the Company’s Chief Executive, Chairman, the executive directors, the Company Secretary and such other members of the executive management as it is designated to consider. The remuneration of non-executive directors shall be a matter for the Chairman and the executive members of the Board. No director or manager shall be involved in any decisions as to their own remuneration
- in determining such policy, take into account all factors which it deems necessary. The objective of such policy shall be to ensure that members of the executive management of the Company are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Company
- review the ongoing appropriateness and relevance of the remuneration policy
- approve the design of, and determine targets for, any performance related pay schemes operated by the Company and approve the total annual payments made under such schemes;
- review the design of all share incentive plans for approval by the Board and 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 to executive directors and other senior executives and the performance targets to be used
- determine the policy for, and scope of, pension arrangements for each executive director and other senior executives
- ensure that contractual terms on termination, and any payments made, are fair to the individual, and the company, that failure is not rewarded and that the duty to mitigate loss is fully recognised
- within the terms of the agreed policy and in consultation with the Chairman and/or Chief Executive as appropriate, determine the total individual remuneration package of each executive director and other senior executives including bonuses, incentive payments and share options or other share awards
- in determining such packages and arrangements, give due regard to any relevant legal requirements, the provisions and recommendations in the UK Corporate Governance Code and FSA Listing Rules and associated guidance
- review and note annually the remuneration trends across the Company or group
- advise on any major changes in employee benefit structures throughout the Company or group
- agree the policy for authorising claims for expenses from the Chief Executive and Chairman
- ensure that all provisions regarding disclosure of remuneration, including pensions, are fulfilled
- be responsible for establishing the selection criteria, selecting, appointing and settling the terms of reference for any remuneration consultants who advise the Committee
- liaise with the Nomination Committee to ensure that the remuneration packages of newly appointed executive directors are within the Company’s overall policy
- approve the terms of service contracts for executive directors of the Company
- make available these terms of reference, explaining its role and authority delegated to it by the Board
- at least once a year, review its own performance, 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; and
- undertake such other tasks as may be referred to the Committee by the Board.
6. Reporting Procedures
Minutes of Committee meetings shall be circulated to all members of the Committee
The Chairman of the Committee shall report its findings and recommendations to the Board meetings immediately following the Committee meeting.
The Committee shall, in accordance with the Regulations, produce an annual report of the Company’s policy on directors’ remuneration and practices which will form part of the Company’s annual report and ensure each year that it is put to shareholders for approval at the Annual General Meeting.
The Chairman of the Committee shall attend the annual general meeting prepared to respond to any shareholder questions on the Committee’s activities.