THE REMUNERATION COMMITTEE'S GOVERNANCE AND APPROACH.


GENERAL GOVERNANCE

The Directors’ Report on Remuneration has been prepared in accordance with the requirements of the Companies Act 2006 and Schedule 8 of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008. It also describes the Group’s compliance with the UK Corporate Governance Code in relation to remuneration. The Company is an active member of the ABI and the Committee, consistent with its approach of operating within the highest standards of corporate governance, takes significant account of guidelines issued by the ABI and shareholder bodies (such as the NAPF) when setting the remuneration strategy for the Company. It also seeks to maintain an active and productive dialogue with investors on developments in the remuneration aspects of corporate governance generally and any changes to the Company’s executive pay arrangements in particular.

The Remuneration Committee’s remit extends beyond the executive directors. It reviews the ongoing pay and bonus decisions on an individual basis for any employees who earn a base salary of £100,000 pa or more. It also reviews the overall pay and bonus decisions in relation to the Control functions (Risk, Regulatory Compliance and Internal Audit), and also the ‘oversight’ departments of Finance and Human Resources to ensure that decisions are not biased depending on reporting lines to either the business or functional head.

TERMS OF REFERENCE

The Committee’s terms of reference are available on our website or on request. The terms of reference were reviewed during 2011 to ensure they continued to accurately reflect the remit of the Committee which embraces the remuneration strategy and policy for the whole Company as well as the executive directors. The Committee retained Hewitt New Bridge Street (HNBS) as its independent adviser until August 2011. The lead consultant adviser to the Committee, John Lee, left to become managing partner of a new firm, FIT Remuneration Consultants LLP (FIT), and the Committee decided to appoint this firm. The terms of agreement between the Company and HNBS and FIT are available on request. Both HNBS and FIT are signatories to the Remuneration Consultants Group Code of Conduct in relation to Executive Remuneration Consulting in the UK.

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Remuneration Committee members and attendees (the Committee met four times during 2011)

Remuneration Committee members

Position

Comments

No person is present during any discussion relating to their own remuneration.

Rudy Markham

Chairman of Remuneration Committee
(from 26 May 2011)

Independent

John Stewart

Member of the Committee until 25 May 2011,
now a standing attendee by invitation

Independent upon appointment on 1 March 2010

Nick Prettejohn

Member from 2 November 2010

Independent

Mike Fairey

Member from 1 May 2011

Independent

Stuart Popham

Member from 1 July 2011

Independent

James Strachan

Member of the Committee until 25 May 2011

Independent

Sir David Walker

Chairman of the Committee until 25 May 2011

Independent

 

 

 

Remuneration Committee attendees

Position

Comments

Tim Breedon

Group Chief Executive

Attends by invitation

Elaine MacLean

Group HR Director

Attends as an executive responsible for advising on the remuneration policy

Rosemary Lemon

Group Head of Reward and Executive Remuneration

Attends as an executive responsible for advising on the remuneration policy

Kaye Maguire

Secretariat

Attends as secretary to the Committee

John Lee

Hewitt New Bridge Street (HNBS) / FIT Remuneration Consultants (FIT)

Attends by invitation as the Committee’s independent adviser

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