Remuneration Committee meetings: Standard agenda items and additional discussions.

Recommendations to the Board in respect of the Chairman’s fee and executive directors’ salaries.

The March Remuneration Committee meeting also discussed an initial review of bonus schemes below Board level in light of the [FSA] review of remuneration guidelines. This included establishing an initial framework for future corporate governance for the approval of bonus awards.

Setting annual bonus targets for the executive directors for 2009 and determining bonuses to be paid for 2008.

Determining the 2009 Performance Share Plan (PSP) awards and performance conditions for the executive directors and approving proposed [PSP] awards granted to senior executives within the Group. The Committee also measured the performance condition applying to the 2006 PSP awards. This award did not vest.

The Committee also agreed to establishing greater clarity over bonus potential for the senior leadership group.

Performing an oversight role on remuneration for other senior executives within the Group. The Committee reviews all pay, bonus and share award recommendations for employees whose salaries are £100,000 or above. It also reviews the remuneration for the ‘oversight departments’ that is, the employees in Human Resources, Finance, Group Compliance and Risk.

Review and approval of new bonus plans or amendments to existing schemes.

Approving the 2008 directors’ remuneration report.

Approval to grant any Freeshares to employees based on Company performance. Freeshares are discussed twice a year. No Freeshares were granted to employees in 2009 due to economic circumstances and Company performance.

Approval of any share grants under the Share Bonus Plan (SBP).

The annual review of the remuneration strategy, policy and approach for all staff. The Committee considers the policy in relation to senior executive remuneration in the context of remuneration structures across the Group as a whole.

The July meeting specifically discussed tax related considerations arising from the 2009 budget.

Reviewing the terms of reference of the Committee.

Regular items include the review of any bonus plans and share grants.

Review of proposed pay, bonus and share scheme budgets for the managers’ pay review.

The December meeting also discussed the final report concerning the review of all bonus schemes below Board level and the establishment of a formal Bonus Steering Committee reporting to the Remuneration Committee. This included principles and good practice in writing bonus plans.

Review of bonus schemes.


 

Agreement was given at the meeting to exercise discretion over the timing of the vesting of the 2007 Share Bonus Plan to allow employees to choose whether to vest their deferred bonus in the 2009-2010 tax year.

Agreement was also given to look at the use of approved and unapproved options in relation to deferred bonus to give employees more flexibility in tax planning on the basis that such arrangements would not result in any adverse tax consequences for the Company.