1) GENERAL REMUNERATION POLICY.


The Group’s remuneration policy is applied broadly consistently for all employees and is designed to support recruitment, motivation and retention as well as to reward high performance in a framework of approved risk management. Remuneration is considered within the overall context of the Group’s sector and the markets in which the divisions operate. The policy for the majority of employees continues to be to pay around the relevant mid-market range with a package designed to align the interests of employees with those of shareholders, with an appropriate proportion of total remuneration dependent upon performance. Management seeks to ensure that our pay policies and practices are free from unfair bias. Part of the pay review process is an annual equal pay audit that reviews pay and bonus decisions by gender, ethnicity, age and full-time versus part-time working. In addition, it considers the pay of the Control Function departments (Risk, Compliance and Internal Audit) as well as the ‘oversight departments’ of Finance and Human Resources and looks at decisions for employees who report directly to the business versus those who report to the function head. The review extends to all employees, including those in LGIM.

The principles of our Remuneration Policy are summarised below:

  • supports recruitment, motivation and retention;
  • rewards high performance and behaviours in the context of appropriate risk management;
  • takes into account market sector, economic environment, job size, function, individual skills and experience and individual and Company performance;
  • seeks to align internal interests to those of shareholders through a long-term incentive scheme linked to [total shareholder return (TSR)], deferral of bonus held in shares, formal shareholding requirements and employee share plans;
  • is broadly consistent for all employees and seeks to ensure that our pay policies and practices are free from unfair bias; and
  • aims to be clear and transparent.

We define core remuneration as base salary, a bonus that is closely aligned to performance and other benefits such as pension. There is also a Long Term Incentive Plan that measures TSR.

Our remuneration principles and policy are also applied broadly across our overseas entities, with local interpretation in line with market and regulatory requirements.

The policy for directors is described in more detail in the following sections.

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Executive Directors’ remuneration for financial year ended 31 December 2011

 

 

 

 

Annual Bonus

2011
£’000

Total

 

Salary
£’000

Benefits1
£’000

Cash in lieu of pension2
£’000

Cash
£’000

Deferred
£’000

2010
£’000

1

Benefits include car allowances and medical insurance.

2

Explained in the Other benefits section.

The information in this table has been audited by the independent auditors, PricewaterhouseCoopers LLP.

Tim Breedon

808

20

178

502

302

1,810

1,861

Nigel Wilson

550

20

34

285

171

1,060

1,141

John Pollock

412

20

91

295

177

995

874

Mark Gregory

400

20

19

193

115

747

746

 

2,170

80

322

1,275

765

4,612

4,622

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