Remuneration Committee

Members of the Remuneration Committee

Phillip Colebatch - Chairman
Jon Aisbitt
Alison Carnwath
Frederic Jolly
Patrick O`Sullivan

Terms of Reference of the Remuneration Committee from December 2011

Membership

  1. The Chair and members of the Committee shall be appointed by the Board.
  2. The Committee shall consist of at least three independent non-executive directors.
  3. The Chairman of the Board, provided that he or she was still considered to be independent at the time of his/her appointment as Chairman of the Board, may also be a member of but may not chair the Committee.
  4. The quorum for meetings shall be two independent non-executive director members.
  5. Appropriate resources, including induction on appointment and subsequent technical updates as required, shall be made available to Committee members to develop their knowledge and expertise and to ensure that members have the relevant skills and experience.

Attendees and meetings

  1. The Committee may invite the Chief Executive to attend all or any part of a meeting.
  2. The Committee will be supported and advised by the Head of HR who will attend all or any part of a meeting at the Chairman’s discretion. The Committee will receive reports from the Audit & Risk Committee as required and the Chief Risk Officer will be invited to attend when appropriate.
  3. The Head of HR or the Company Secretary or his/her nominee will act as Secretary to the Committee.
  4. The Committee will meet at least four times a year.

Role and responsibilities

In carrying out the responsibilities listed below, the Committee shall have regard to relevant legal and regulatory requirements including the principles and provisions of the UK Corporate Governance Code, the UKLA listing rules and the FSA Remuneration Code of practice on remuneration policies (“the FSA Code”), and to leading investor representative body guidelines (including the ABI and NAPF).

  1. To determine and agree with the Board the Company’s remuneration philosophy and the principles of its remuneration policy, ensuring that these are in line with the business strategy, objectives, values and long-term interests of the Company and comply with all regulatory requirements including the FSA Code. These will be subject to annual review.
  2. To approve the process for determining the roles deemed to be FSA Code Staff roles, to agree these roles, to require that a record of FSA Code Staff roles is maintained and to determine when the record should be reviewed.
  3. To review the Company’s remuneration practices in relation to the Board’s risk appetite statements ensuring that remuneration does not encourage excessive risk-taking and is determined within the Company's risk management and control framework taking into account the long-term interests of shareholders, fund investors and other stakeholders.
  4. To determine the principles for the calculation of and approve management proposals for the quantum of the variable compensation spend each year to be recommended by the Committee for subsequent approval by the Board.
  5. To review the performance evaluations of the executive directors and recommend to the Board for approval, within the broad remuneration policy and in consultation with the Chairman and Chief Executive as appropriate, the total annual compensation for individual executive directors (including salary, bonus short and long term incentives awards and pension). No director will participate in the discussion or approval of his or her own compensation.
  6. To have oversight of the performance evaluations for and to review and approve, within the broad remuneration policy, the individual elements of the total annual compensation package for the members of the Executive Committee and FSA Code Staff (including salary, bonus incentives, share awards and pension). This includes the CRO and Head of Compliance.
  7. To have oversight of the performance evaluations and compensation proposals for the top 50 staff as measured by total compensation.
  8. To review and recommend to the Board, for approval, the annual objectives for executive directors against which their performance for compensation purposes will be evaluated. No director will participate in the discussion or approval of his or her annual objectives.
  9. To approve compensation guarantees above a level delegated to management as agreed by this Committee from time to time.
  10. To approve the design of and determine the performance and vesting criteria attaching to share incentive plans to align these with the interests of shareholders prior to submission to the Board and shareholders for approval.
  11. To review the vesting criteria of share incentive plans against the Company’s results each year and determine the extent to which these have been achieved.
  12. To determine the contractual termination terms for executive directors and approve any severance payments or arrangements.
  13. To recommend to the Board for approval the total compensation for the Chairman of the Board. The remuneration of the non-executive directors shall be a matter for the Chairman and the executive directors of the Board.
  14. To select, appoint and set the terms of reference for any remuneration consultants used by the Committee and obtain information on remuneration policy and practice in other comparable companies.
  15. To review, prior to approval by the Board, the annual report on directors’ remuneration published in the Annual Report each year in line with applicable statutory and regulatory disclosure requirements.
  16. To review or make decisions on any other matters referred to the Committee by the Board.
  17. To report to the Board on the proceedings of the Committee after each meeting and make available to Board members the minutes of Committee meetings.