Remuneration Committee report
For the CEO a non-financial outturn of 68.4% of maximum opportunity was approved, reflecting individual category scores ranging from ‘satisfactory’ for strategy and risk categories, to ‘strong’ for the client category. The Chief Financial Officer, in shaping the organisational strategy, leading key transformations and moving the risk and control agenda forward, to an extent that exceeded the expectations of the Chief Financial Officer role, received top scores in all non-financial categories and 100% of maximum non-financial bonus opportunity. A full description of the assessment and scoring of financial and non-financial measures is included later in this report. The average overall outturn for the executive directors was 74.8% of maximum opportunity, with the CEO’s score being 68.5% of maximum, equivalent to slightly above ‘on target’ performance, and the Chief Financial Officer’s overall score being 81.1% of maximum, this being equivalent to above target performance. For the CEO this outturn was equivalent to 102.7% of salary, and for the Chief Financial Officer 121.7% of salary on an annualised basis, her bonus being subject to service pro-rata. The maximum annual bonus opportunity for both executive directors being 150% of salary. The Remuneration Committee is satisfied that both these bonus outturns fairly reflect the Group’s pay for performance principles, strike the right balance between the individual contributions made and the overall level of organisational performance delivered, and are consistent with the range of outcomes across the wider workforce. In achieving these aims, these outturns also fairly balance the interests of all the Group’s stakeholders. Executive Director bonus awards are subject to the Group’s malus and clawback policy and one third of overall bonus value will continue to be awarded in deferred share options, providing
ongoing alignment of interests between senior leadership and shareholders.
communicated by Regulatory News Service at the time of grant. Collectively, 10,755 BRK share options vested to the CEO from these awards during the FY24 reporting period. The value of these awards is not shown in the Single Figure Table as they would be recognised as remuneration in the year of grant, prior to Andrew being an Executive Director.
level’ discussions, providing an opportunity for members of the Board to hear feedback, discuss ideas and better understand the experience and expectations, including those around executive pay, of employees outside of the Group’s senior leadership cohort. The Group also maintained its employee engagement survey, ‘Speak Up’, to give more opportunities for employees to give their views and collect more detailed feedback, leading to a full harmonisation of annual leave entitlement for all employees across the Group and an ongoing understanding of employee opinion on individual components of pay and benefits. Approach to executive remuneration in FY25 Following the appointment of Andrea Montague as CEO Designate at 1 July 2024, where she assumed the non-regulated responsibilities of the CEO role, her salary was reviewed against the CEO benchmark and increased to £460,000 per annum. This increase represented a 6.3% increase on the FY24 salary of the outgoing CEO and a progression for the role consistent with the increases applied to equally high performers in the wider workforce. The outgoing CEO’s salary was not increased for FY25. The implementation of the Executive Director annual bonus plan for FY25 will see no change to the maximum opportunity for the CEO and Chief Financial Officer roles, which will both remain at 150% of base salary, or base salary earnings, where an executive director is not in service for the full reporting period. The bonus will continue to be assessed using a balanced scorecard with the existing financial and non-financial weightings of 60% and 40% respectively. The Group’s dual financial focuses of creating market-leading organic growth alongside the delivery of top quartile profitability,
The FY24 reporting period was the financial performance measurement period for the 2021 Executive Director LTIP award. The performance measures approved by the Remuneration Committee for the award prior to its grant in 2021 were, (i) underlying, diluted earnings per share (“EPS”), representing 90% of maximum opportunity, with (ii) a basket of defined ESG policy development goals forming the remaining 10% of maximum opportunity. The CEO and former Chief Operating Officer (Lynsey Cross) are the only two executives holding 2021 ED LTIP awards. The FY24 underlying, diluted EPS outturn delivered was 161 pence per share, falling short of the threshold value of 185 pence per share needed for the pay-out of any shares against this measure. The Remuneration Committee’s assessment of ESG performance concluded that the ESG policy goals had been fully satisfied and the full 10% award pay-out was approved. No discretion was applied by the Remuneration Committee in relation to the EPS nil vesting outturn and the overall 2021 ED LTIP pay-out was approved at 10% of the number of BRK share options originally granted. For the CEO, this means that 3,309 of the originally granted 33,086 share options will become available to him when the award formally vests on 30 September 2024. Additionally, two exceptional share option awards vested to the CEO in the FY24 reporting period. These retention awards were granted to Andrew Shepherd in November 2020 and June 2021, prior to his appointment to the Group Board. Being retention-focussed, neither award was subject to financial performance conditions and details of both awards were
Long-term incentive awards granted during the year
In the first half of the FY24 reporting period, Executive Director LTIP (performance share) awards were made to the CEO and Chief Financial Officer under the 2018 Long-Term Incentive Plan. The grant was made on 23 October 2023, after the appointment of the Chief Financial Officer at 1 August 2023. The performance measures for the awards granted continued to use underlying, diluted earnings per share (“EPS”) and a basket of ESG metrics, with 90% of overall opportunity relating to EPS performance and 10% to ESG deliverables. In accordance with the Directors’ Remuneration Policy, the grant levels for the CEO and Chief Financial Officer were 200% of base salary. Stretch targets, subject to Remuneration Committee assessment following the close of the FY26 reporting period, were established for both performance measures. Following the announcement of the CEO’s upcoming retirement, he will now be eligible for a service-based pro-ration of this award in accordance with the rules of the plan. Workforce engagement During FY24, John Linwood continued to be the designated Non-Executive Director to lead the Board’s engagement with our people. Throughout the year, a number of the Non- Executive Directors participated in ‘skip-
80 Brooks Macdonald Group plc Annual Report and Accounts 2024
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