Annual equal pay audit
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.
All employee share schemes
There are share schemes for all UK employees. Executive directors are entitled to participate on the same terms as all UK employees in the Savings-Related Share Option Scheme (SAYE) and the ESP, both of which are approved by HMRC. Each year the Committee considers a grant of Group Performance Shares (Freeshares) after the annual results are known to tie any award more closely to Company performance. For performance in relation to 2012, the Committee has agreed a grant of 372 shares to each employee (for 2011 performance this was 410 shares).
The SAYE allows employees to enter into a regular savings contract over either three or five years, coupled with a corresponding option over shares of the Group. The grant price is equal to 80% of the quoted market price of the Group shares on the invitation date.
Under the ESP, approved by HMRC, permanent UK employees may elect to purchase Group shares from the market at the prevailing market price on a monthly basis. The Group supplements the number of shares, purchased by matching the first £20 of each employee’s contribution. From February 2013 the Company will also match employee contributions between £20 and £125 on a one matching share for every two purchased. From time to time, the Group may make a grant of Freeshares (see above). Both the free and matching shares must be held in trust for three years before they may vest to the employee.