This document sets out our Directors Remuneration Policy (the Remuneration Policy) which was formally approved by the Directors and came into effect following the AGM on 20th January 2022. It is intended that this Policy will last for three years from that date.
For more information / enquiries regarding this Remuneration Policy, please Contact Us.
Policy Overview
This Remuneration Policy has been prepared in accordance with the MifidPru Remuneration Code. The Remuneration Policy has bee developed taking into account a number of regulatory and governance principles including:
The 2018 UK Corporate Governance Code
The regulatory framework applying to all Financial Services Sectors (including the Dual-Regulated Firms Remuneration Code and provisions of the EU Capital Requirements Directive.
Approach to designing the Remuneration Policy, the Remuneration Committee is responsible for the development, implementation and review of the Directors Remuneration Policy. In addressing this responsibility, the Committee works with management and external advisers to develop proposals and recommendations. The Committee considers the source of information presented to it, take care to understand the detail and ensures that independent judgment is exercised when making decisions.
The Code sets out principles against which the Committee should determine the Remuneration Policy for Directors and all staff. These are shown in the first column of the table below, together with the Committee’s approach, in the second column.
Principle |
Committee Approach |
|---|---|
| Clarity – remuneration arrangements should be transparent. | We aim to set out our approach to remuneration in this report as transparently as possible. |
| Simplicity – remuneration structures should avoid complexity and their rationale and operation should be easy to understand. | Within the required regulatory framework, we have structured the Remuneration Policy to be as simple as possible. We have a simple policy offering pensions at the same rate as employees, an annual bonus plan which applies to all employees. |
| Risk – remuneration arrangements should ensure reputational and other risks arising from excessive rewards and behavioural risks that can arise from target-based incentive plans are identified and mitigated. | We have mitigated these risks through careful policy design, including long-term performance measurement and the use of specific risk-based measures. Provisions have been made to make sure incentive payments and rewards are appropriate. |
| Predictability – the range of possible values and rewards to all staff and any other limits or discretions should be identified and explained at the time of approving the Remuneration Policy. | We look carefully each year at the range of likely performance outcomes for incentive plans when setting performance target ranges for threshold, target and maximum pay-outs and would use discretion where necessary where this leads to an inappropriate pay outcome. |
| Proportionality – the link between individual awards, the delivery of strategy and the long-term performance of the Company should be clear. Outcomes should not reward poor performance. | Incentive plans are determined based on a proportion of base salary so there is a sensible balance between fixed pay and performance linked elements. |
| Alignment to culture – incentive schemes should drive behaviours consistent with Company purpose, values and strategy. | Bonus plans operate within the Company and are approved by the Committee to ensure consistency with Company purpose, values and strategy. |
The table below and the accompanying notes describe the Remuneration Policy for all staff.
Purpose and link to strategy |
Operation and performance conditions |
Maximum |
|
|---|---|---|---|
| Salary | To reward all staff for the role and duties required. Recognise individuals experience, responsibility and performance. | Paid monthly. Base salaries are usually reviewed annually on the anniversary of each staff member joining the company with any changes usually effective from the next available pay day after review. No performance conditions apply to the payment of salary. However, when setting salaries, account is taken of an individual’s specific role, duties, experience and contribution to the Company. | Increases will generally be broadly in line with the average of the workforce. |
| Pensions | To provide a contribution to retirement planning. | The company does not currently operate a staff pension scheme, but all staff are eligible to join Nest when meeting relevant criteria. This is under annual review, and it is the company’s intention to offer a contributory staff pension scheme within the next two years. | Contribution limits are dictated by Nest. |
| Annual bonus | To incentivise and reward individuals for the achievement of pre-defined, committee-approved, annual financial, operational and individual objectives which are closely linked to the corporate strategy. | The annual bonus targets will be based on performance in line with an agreed criteria which includes an element of risk appraisal. Within the criteria at least 50% of the bonus will be based on financial performance. 10% of the bonus will be based on personal performance targets. | The maximum bonus opportunity is 100% of salary per annum. The threshold level for payment is 25% of maximum for any measure. |
Choice of performance measures for all staff awards
The bonus plan is based on a mixture of financial and risk measures, in line with our key objectives of sustained growth in earnings loading to the creation of shareholder value over the long term within an appropriate risk framework. We provide a close alignment between the relative returns experienced by our shareholders and the rewards to executives.
The company will ensure that the bonus pay outs are aligned with underlying performance, financial and non-financial risk and individual conduct.
Annual bonus targets are set taking into account the business plans, the external market and regulatory requirements.
Conflicts of Interest
The Committee considers and potential conflicts prior to meeting materials being distributed and at the beginning at each meeting.
Awards granted prior to the effective date
Any commitments entered into with all staff prior to the effective date of this Policy will be honoured. Details of any such payments will be set out in the Annual Report on Remuneration as they arise.
Provision |
Policy |
|---|---|
| Notice Period | As per individual contract. |
| Termination payments | A payment in lieu of notice may be made on termination to the value of the staff members basic salary at the time of termination. Such payments may be made in instalments and in such circumstances can be reduced to the extent that the staff member mitigates their loss. |
| Remuneration | Salary, pension and core benefits are specified in the arrangements. There is no contractual right to participate in the annual bonus plan or to receive long-term incentive awards. |
| Post-termination | These include six-month post termination restrictive covenants against competing with the company; nine months restrictive covenants against dealing with clients or suppliers of the company; and nine months restrictive covenants against soliciting clients, suppliers, and key employees. |
| Contract date | As per individual contract. |
| Unexpired term | Rolling contracts. |