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Remuneration Committee Terms of Reference
THIS SECTION WILL SHORTLY BE UPDATED FOLLOWING PUBLICATION OF OUR 2007 ANNUAL REPORT
1. Constitution
1.1 The Committee is established as a Committee of the Board.
2. Membership
2.1. Members of the Committee shall be appointed by the Board, on the recommendation of the Nomination Committee.
2.2. The Committee shall comprise at least three independent non-executive directors. In addition the Chairman of the Board may be a member of the Committee if he or she was considered to be independent on appointment as Chairman.
2.3. Only members of the Committee have the right to attend Committee meetings. However, other individuals such as members of the Board, members of management and external advisers may be invited to attend for all or part of any meetings as and when appropriate.
2.4. The Board shall appoint one of the members of the Committee as Chairman of the Committee. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting. The Chairman of the Board shall not be Chairman of the Committee.
3. Secretary
3.1 The Group Company Secretary shall act as the secretary of the Committee.
4. Quorum
4.1 The quorum necessary for the valid transaction of business shall be 2. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
5. Meetings
5.1 The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee shall require.
6. Notice of Meetings
6.1 Meetings of the Committee shall be summoned by the secretary of the Committee at the request of any of its members.
7. Minutes of Meetings
7.1 The secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
7.2 Minutes of Committee meetings shall be circulated promptly to all members of the Committee.
8. Annual General Meeting
8.1 The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities.
9. Duties
The Committee shall:
9.1 Determine and agree with the Board, and keep under review, the overall remuneration policy of the Company having due regard to the need to attract, retain and motivate directors and senior managers of the experience and calibre required.
9.2 Determine and agree with the Board and keep under review the detailed elements of the remuneration packages and service contracts of the;
• Executive Directors,
• Other members of the Executive Committee,
• Any other employee whose remuneration exceeds the “on-target” earnings of the lowest paid regional director.
The remuneration of non-executive directors shall be a matter for the Executive Directors although the Committee shall make a recommendation to the Executive directors in relation to the remuneration of the Chairman. No director or manager shall be involved in any decisions as to their own remuneration.
9.3. Agree targets and benefits in respect of;
• any performance related pay scheme for any member of the group in 9.2 above having due regard to the interests and expectations of the shareholders,
• ensuring that targets set are sufficiently challenging and that the rewards represent a fair and highly motivating incentive and are commensurate with industry practice.
9.4. Review the design of all long-term incentives schemes for approval by the board and shareholders and for any such schemes, determine each year whether awards/grants will be made, and if so, the overall amount of such awards/grants, the individual awards to executive directors and other senior executives and that the performance criteria are appropriate and consistent with maximising shareholder value.
9.5. Determine the policy for, and scope of, pension arrangements for each executive director and other senior executives.
9.6. Determine and agree with the Board any severance payment or other payment in respect of compensation for loss of office or early retirement to any member of the group in 9.2.
9.7. Within the terms of the agreed policy and in consultation with the Chief Executive, determine the total individual remuneration package of each executive director and other senior executives including bonuses, incentive payments and share options or other share awards, giving due regard to any relevant legal requirements, the provisions and recommendations in the Combined Code and the UK Listing Authority’s Listing Rules and associated guidance.
9.8. Review and note annually the remuneration trends across the company or group.
10. Reporting Responsibilities
10.1 The Committee Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities.
11. Review Performance
11.1 The Committee shall, at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval.
12. Authority
12.1 In discharging its duties the Committee may obtain at the Companies’ expense such legal or other professional advice it considers necessary.
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