DIRECTORS’ REMUNERATION REPORT
Annual statement (Not subject to audit) Dear Shareholder,
The Remuneration Committee consults with the Group Chief Executive and Group Finance Director who may attend meetings by invitation of the Committee Chair, although neither is involved in deciding their own remuneration. The Group Company Secretary acts as Secretary to the Committee. The meeting is also attended by the Head Office HR Manager by invitation of the Committee Chair. The Directors’ Remuneration Report has been approved by the Board. 2025/26 key activities ■ Received strong Shareholder support for the 2025 Directors’ Remuneration Report ■ Approved bonus outcomes for 2024/25 and the vesting of the 2022 LTIP award; reviewed anticipated outcomes for the 2025/26 bonus and 2023 LTIP awards ■ Set appropriate 2025/26 annual bonus and LTIP measures, and targets for Executive Directors and senior management ■ Considered wider workforce remuneration and approved the implementation of a second year of out- of-cycle cost of living adjustments for areas with high rates of inflation ■ Undertook a review of senior executive pay below the Board ■ Considered gender pay gap data and initiatives to close the gap ■ Implemented the base salary increases for the Group Chief Executive and Group Finance Director as anticipated and detailed in last year’s Directors’ Remuneration Report ■ Received an update from the Committee’s independent adviser on market trends and the latest views from investors and proxy voting agencies. Areas of focus in 2026/27 ■ Review the competitiveness and structure of remuneration for Executive Directors and senior management and its alignment with strategy, taking into account pay across the wider workforce ■ Set annual bonus and LTIP measures and targets for 2026/27 ■ Determine incentive outcomes for Executive Directors and senior management in respect of 2025/26; and receive updates on 2026/27 bonus and other in-flight LTIP awards ■ Keep abreast of corporate governance and regulatory developments and market trends on pay ■ Monitor performance against all strategic objectives for the Executive Directors and Group Management Committee ■ Approve the 2026 Directors’ Remuneration Report and respond to Shareholder feedback at the 2026 Annual General Meeting, as required ■ Review the Directors’ Remuneration Policy and consult with Shareholders as required, prior to the triennial Remuneration Policy vote in 2027.
Returning to organic growth, investing for the future and continuing to deliver on our strategic priorities demonstrates the Group’s clear direction and purpose, as well as the quality and commitment of the leadership team and our employees across the Group globally. Annual bonus outcome for FY 2025/26 The annual bonus for both Executive Directors for FY 2025/26 was based on Group adjusted operating profit (60%) at constant currency, adjusted operating cash flow (24%) at constant currency, strategic objectives (8%) and ESG-related objectives (8%). Based on the performance set out opposite, adjusted operating profit of £61.0m and adjusted operating cash flow of £55.5m were both between threshold and target, and the strategic and ESG-related objectives were determined to have been substantially met. This results in an overall bonus payout of 41% of maximum for the Group Chief Executive and 42% of maximum for the Group Finance Director. The Committee has considered whether any adjustment is required to the formulaic outcomes to reflect the underlying financial and non-financial performance of the business and decided that no such adjustment is appropriate given the overall performance of the business during the year. In line with the Directors’ Remuneration Policy, as the Executive Directors have met their shareholding requirements (1,154% and 583% of salary respectively), 20% of the bonus earned will be deferred in share awards. Full details of the bonus outcome for FY 2025/26 are set out in the Annual Report on Remuneration. 2023 LTIP vesting The Executive Directors received awards under the LTIP on 14 June 2023 that were based on relative TSR (Total Shareholder Return), adjusted EPS (earnings per share) and carbon emission reduction performance criteria, with weightings of 45%, 45% and 10% respectively. ■ Relative TSR – discoverIE delivered a TSR over the three-year period to 31 March 2026 which ranked the Company below median and, as such, none of this part of the award vested. ■ EPS – adjusted EPS grew by 14.5% over the three-year period, which was below the threshold and results in none of this part of the award vesting. ■ Carbon emission reduction – the reduction achieved was 68%, resulting in this part of the award vesting in full. Taken together, this has resulted in the LTIP award vesting at 10% of maximum. The Committee believes this is an appropriate reflection of performance over the last three years and has not applied any discretion to the formulaic vesting outcome. These vested awards will be subject to a two-year holding period.
On behalf of the Board, I am pleased to present our Directors’ Remuneration Report for the year ended 31 March 2026. This report comprises: ■ This Annual Statement, which summarises the work of the Remuneration Committee (the “Committee”) during FY 2025/26 and Executive Directors’ remuneration outcomes for the year. ■ A summary of the Directors’ Remuneration Policy (the “Policy”) which was approved by Shareholders at our 2024 Annual General Meeting. ■ The Annual Report on Remuneration, which provides: i. details of the remuneration earned by Directors and the link between Company performance and pay in the year ended 31 March 2026, and ii. how we intend to implement the Policy in FY 2026/27. Business performance and resulting remuneration outcomes for the year ended 31 March 2026 During the year, the Group made good progress, returning to organic sales growth, despite the disruption caused by trade tariffs, and widespread industrial destocking over the last 18 months. Overall, sales in the year increased by 5% CER and by 2% organically, with organic growth of 5% in the final quarter. Orders increased by 9% in the year and by 5% organically, with demand steadily increasing through the year. Organic order growth in the final quarter was 14%, with the book-to-bill ratio ending the year at 1.03. New design wins continued to grow, positioning the Group well for growth in the coming year. Adjusted operating profit was up 1%. The Group made additional investments in production capacity in Asia, and we have approved plans for further capacity expansion in the coming year in both Asia and Norway. We have also invested in additional engineering and sales capacity in the US and in Europe. We have completed key strategic acquisitions, with Storm Interface and Trival recently joining the Group and, in May 2026, we have agreed terms for the acquisition of 3Gmetalworx, subject to regulatory approval. Our pipeline of acquisition opportunities remains strong. We also continued to make good progress on our Environmental, Social and Governance (“ESG”) objectives with CY2025 Scope 1 and 2 carbon emissions 68% lower than the CY2021 baseline, and further improvements in health & safety performance. In the year ahead, we plan to install heat pumps at our largest gas-emitting sites in Poland, thereby delivering further reductions in our carbon emissions.
Celia Baxter Chair of the Remuneration Committee
Members
Member since
Celia Baxter (Chair) Bruce Thompson
2023 2018 2020 2022
Clive Watson
Rosalind Kainyah
The implementation of our Remuneration Policy seeks to motivate and support outperformance.”
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discoverIE Group plc Innovative Electronics
Annual Report and Accounts for the year ended 31 March 2026
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