Remuneration Committee report continued Directors’ remuneration policy continued
Illustration of remuneration scenarios continued Note that the charts are indicative, as actual amounts may depend on share price. Assumptions made for each scenario are as follows: • Minimum. Fixed remuneration only: salary, benefits and pension. Salary based on 2021/22 salary and benefits based on 2020/21 disclosed benefit amounts • Target. Fixed remuneration plus “target” annual bonus opportunity of 50% of salary for both the Chief Executive Officer and Chief Financial Officer, plus 15% vesting of the maximum award under the Long Term Incentive Plan. NCC does not use the concept of a “target” bonus; however, in order to be fully compliant with the regulations an assumption of 50% of the maximum for 2021/22 has been used • Maximum. Fixed remuneration plus maximum annual bonus opportunity equivalent to 100% of salary for both the Chief Executive Officer and Chief Financial Officer for 2021/22, as well as 100% vesting of the maximum award under the Long Term Incentive Plan, being 175% of salary for the CEO and 150% of salary for the CFO. Note that from 2022/23 it is intended that the maximum annual bonus will increase from 100% of salary to 125% of salary • Effect of a 50% increase in share price. Same assumptions as for the maximum scenario, but with the additional assumption that the value of LTIP awards increases by 50% as a result of share price appreciation over the performance period Statement of consideration of employment conditions elsewhere in the Group The Remuneration Committee does not consult directly with colleagues when determining the Remuneration Policy for Executive Directors. However, as stated above, the annual bonus and LTIP are operated for other colleagues to ensure alignment of objectives across the Group and the terms of the pension scheme (save for the contribution entitlements) are the same for all permanent colleagues. In addition, the Committee compares information on general pay levels and policies across the Group when setting Executive Director pay. Jennifer Duvalier undertakes regular colleague engagement sessions where colleagues are able to ask about Executive Director pay. During the year no questions or concerns on Executive pay were raised to Jennifer (please see page 80 for further information). How shareholder views are taken into account The Remuneration Committee considers shareholder feedback received on the Directors’ Remuneration Report each year and guidance from shareholder representative bodies more generally. Shareholders’ views are key inputs when shaping remuneration policy. When any material changes are proposed to the Remuneration Policy, the Remuneration Committee Chair will inform major shareholders in advance and will generally offer a meeting to discuss these. Key areas of discretion in the Remuneration Policy The Committee operates the Group’s variable incentive plans according to their respective rules and in accordance with HMRC rules where relevant. To ensure the efficient administration of these plans, the Committee will apply certain operational discretions. These discretions are implicit in the Policy stated above, but we have listed them for clarity. These include, but are not limited to, the following: • Selecting the participants in the incentive plans on an annual basis • Determining the timing of grants of awards and/or payments • Determining the quantum of awards and/or payments (within the limits set out in the Policy table) • Reviewing performance against annual bonus and LTIP performance metrics • Determining the extent of payout or vesting based on the assessment of performance • Making the appropriate adjustments required in certain circumstances, for instance for changes in capital structure • Determining “good leaver” status for incentive plan purposes and applying the appropriate treatment • Undertaking the annual review of weighting of performance measures and setting targets for the incentive plans, where applicable, from year to year • Discretion to override formulaic outcomes of the incentive schemes if an event occurs which results in the annual bonus plan or LTIP performance conditions and/or targets being deemed no longer appropriate (e.g. material acquisition or divestment); the Committee will have the ability to adjust appropriately the measures and/or targets and alter weightings, provided that the revised conditions are not materially less challenging than the original conditions • Discretion to override formulaic vesting outcomes if they are judged by the Committee not to be an accurate reflection of Company performance Legacy arrangements For the avoidance of doubt, in approving the Remuneration Policy, authority is given to the Company to honour any commitments entered into with current or former Directors before the current legislation on remuneration policies came into force or before an individual became a Director, such as the payment of outstanding incentive awards, even where it is not consistent with the policy prevailing at the time such commitment is fulfilled. Details of any payments to former Directors will be set out in the Annual Report on Remuneration as they arise. External directorships for Executive Directors Executive Directors may accept one external non-executive directorship with the prior agreement of the Board, provided it does not conflict with the Group’s interests and the time commitment does not impact upon the Executive Director’s ability to perform their primary duty. The Executive Directors may retain the fee from external directorships.
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NCC Group plc — Annual report and accounts for the year ended 31 May 2021
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