Approach to service contracts and letters of appointment The Committee’s policy is to offer service contracts for Executive Directors with notice periods of between six and 12 months exercisable by either party. In addition, the Executive Directors are subject to a non-compete clause from the date of termination, where enforceable.
All Non-Executive Directors’ appointments are terminable on at least three months’ notice on either side. The Executive Directors and Non-Executive Directors offer themselves for re-election at the AGM every year.
Policy on payment for loss of office Payments on termination for Executive Directors are restricted to the value of salary and contractual benefits for the duration of the notice period. It is the policy of the Remuneration Committee to seek to mitigate termination payments and pay what is due and fair. There are no predetermined special provisions for Executive Directors with regard to compensation in the event of loss of office. The Company may also pay an amount considered to be reasonable by the Committee where loss of office is due to redundancy or in respect of fees for legal advice for the outgoing Director or to settle or compromise any legal claims. Assistance with outplacement may also be provided. Elements of variable remuneration would be treated as follows:
Pay element
Approach
Areas of flexibility
Annual bonus
The Committee has the discretion to pay cash bonus amounts or allow deferred bonus awards to vest on cessation or whether they lapse. If the Committee exercises this discretion, it can also determine if the vesting should be prorated to reflect time served since the beginning of the deferral date. The same discretionary principle would apply to the payment of dividend equivalents on any shares that have been deferred, but not yet vested.
Determined on a case-by-case basis. When the Committee determines that the payment of an annual bonus is appropriate, the annual bonus payment is typically: • Prorated for the period of time served from the start of the financial year to the date of termination and not for any period in lieu of notice or garden leave • Subject to the normal bonus targets, tested at the end of the year, and would take into account performance over the notice period • Subject to deferral of 35% of the value Unvested awards will normally lapse upon cessation of employment.
Long Term Incentive Plan
The Committee has discretion to allow awards to vest at the normal vesting date or earlier. If the Committee exercises this discretion, awards are normally prorated to reflect time served since the date of grant and based on the achievement of the performance criteria. The holding period detailed above will apply to such incentives.
All-colleague share schemes
None.
The Executive Directors, where eligible for participation in all-colleague share schemes, participate on the same basis as for other colleagues.
Illustration of remuneration scenarios The chart below details the hypothetical composition of each Executive Director’s remuneration package and how it could vary at different levels of performance under the new Remuneration Policy set out above. 2,500
£2,188,000
2,000
£1,781,000
1,500
£1,354,000
£1,123,000
56%
46%
1,000
£856,000
14%
51%
41%
£576,000
£502,000
26%
21%
27%
27% 12%
500
27%
23%
£353,000
Long-term incentives
Annual bonus
100%
59%
28%
23%
61%
100%
32%
26%
0
Fixed pay
Minimum
Target
Maximum
Maximum + 50% share price growth
Minimum
Target
Maximum
Maximum + 50% share price growth
Chief Executive Officer
Chief Financial Officer
NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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