Approach to recruitment – recruitment remuneration

STANDARD PROVISION

POLICY AND OTHER PROVISIONS

General approach

The Committee aims to attract, motivate and retain an executive director with the required expertise to develop and deliver the business strategy, while at the same time ensuring that the remuneration arrangements offered are in the best interests of both the company and its shareholders and paying no more than considered necessary to attract the right calibre of candidate to the role.

In determining the appropriate remuneration arrangements on hiring a new executive director, the Committee will take into account all relevant factors including, but not limited to:

  • The individual’s skills and relevant experience
  • Internal relativities
  • Local market practice in the jurisdiction from which candidate was recruited
  • Logistics and support if a relocation is required
  • Appropriate market data
  • The individual’s existing remuneration package
Where possible the Committee endeavours to align the remuneration arrangements of new executive directors with the remuneration outlined in the policy for other executive directors. Any such awards will be within the maximum level of variable remuneration limit set out below.

Where an existing internal candidate is made an executive director, the Committee may continue to honour prior commitments made before joining the Board.

Maximum variable pay levels

The maximum level of annual variable pay and long-term incentives which may be awarded to a new executive director will be in line with the policy table i.e. 475% of base salary. This limit excludes buyout awards.

Buyout of any existing remuneration components or other arrangements

The Committee recognises that, as a consequence of regulatory changes around the globe in the financial services sector, long serving executives in the sector are likely to have accrued significant levels of deferred remuneration which may be lost on a transfer of employment. Accordingly, to aid the recruitment of a new executive director, the Committee may make awards to ‘buyout’ remuneration arrangements forfeited on leaving a previous employer, taking into consideration relevant factors including, but not limited to:

  • Form of the award
  • Any performance conditions attached to those awards
  • The vesting profile of the awards and likelihood of vesting
  • Relevant regulatory requirements and guidance in place in relation to ‘buy-out’ awards
‘Buyout’ awards will typically reflect the terms and the value of the arrangements foregone. Where possible the Committee will use existing share based plans to effect a buyout. However, in the event these are not an appropriate vehicle, the Remuneration Committee retains the discretion to use the Listing Rules exemption (LR 9.4.2) for the purpose of making an award to ‘buyout’ remuneration terms forfeited on leaving a previous employer.

Relocation and mobility

Where a new executive director has to relocate to take up the appointment, either within the UK or from overseas, practical and/or financial support may be given in relation to relocation or mobility in line with our internal policies. This may include the cost of any tax that is incurred.

For appointments from overseas, home country benefits may continue to apply.

Note that relocation and mobility support may also apply to the recruitment of a non-executive director (NED).

Shareholder transparency

The Committee believes that remuneration arrangements should be as transparent as possible. Therefore the Committee will make every effort to explain the rationale for the recruitment arrangements in the Directors’ remuneration report following the recruitment of a new executive director.

Recruitment of non-executive directors

The Committee will normally align the remuneration arrangements for new non-executive directors with those outlined within the policy table in the Base salary policy section of the Annual Report and Accounts 2013.