Part 2: remuneration policy

It is the Company's intention that the directors' remuneration policy as set out in this part of the report should apply from the date of the Company's 2014 Annual General Meeting, subject to its approval by shareholders at that meeting.

Background

The Committee's objective is to ensure that the remuneration paid to senior executives is appropriate in both amount and structure, is directly linked to the Company's annual and long term performance and aligned with the interests of shareholders. We believe that stable and transparent remuneration structures are key elements in a fair system for rewarding personal and collective contribution across the business. There are bonus structures throughout the Company, including Head Office, stores, call centres and warehouses.

The focus is on ensuring that a competitive and appropriate base salary is paid to directors and senior managers, together with incentive arrangements that are:

  • appropriate in both amount and structure;
  • directly linked to the Company's annual and long term performance;
  • in alignment with the interests of shareholders and our long term strategy; and
  • stable and transparent.

Pay and employment conditions elsewhere in the Group are considered to ensure that differences for directors are justified. Remuneration policy does not conflict with the Company's approach to environmental, social and corporate governance matters and we believe the current arrangements do not encourage directors to take undue business risks.

The table below summarises the Company's policies with regard to each of the elements of remuneration for existing directors and the approach to payments on external recruitment and termination.

ELEMENT
Purpose and link to strategy
OperationMaximum potential valuePerformance measures and targetsChanges for 2013 and 2014
(this column is to provide information and is not formally part of the directors' remuneration policy but is part of the annual report on remuneration)

Salary

To provide a satisfactory base salary within a total package comprising salary and performance-related pay.

Performance-related components and certain benefits are calculated by reference to base salary. The level of salary broadly reflects the value of the individual, their role, skills and experience.
Reviewed annually, generally effective 1 February. The Committee focuses particularly on ensuring that an appropriate base salary is paid to directors and senior managers. The Committee considers salaries in the context of overall packages with reference to market data, individual experience and performance, and the level and structure of remuneration for other employees and the external environment. External benchmarking analysis is only occasionally undertaken and the Committee has not adopted a prescribed objective of setting salaries by reference to a particular percentile or benchmark.There is no guaranteed annual increase. The Committee considers it important that base salary increases are kept under tight control given the multiplier effect of such increases on future costs. In recent years, increases in executive directors' salaries have been in line with the wider company cost of living awards.

Under the new regulations the Company is required to specify a maximum potential value for each component of pay. Accordingly, for the period of this policy no salary paid to an executive director in any year will exceed the median base salary of FTSE 100 Chief Executives as confirmed by independent advisers. Currently this is circa £850,000 per annum.
Not applicable.Base salaries of the executive directors increased by 2% in February 2014, in line with the wider company cost of living awards.

Base salaries for the executive directors from February 2014 are:
£'000
Lord Wolfson743
Christos Angelides539
David Keens496
Michael Law306
Jane Shields306

Annual bonus

To incentivise delivery of stretching annual financial goals.

To provide focus on the Company's key financial objectives.

To provide a retention element in the case of the Chief Executive as any annual bonus in excess of 100% of base salary is payable in shares, deferred for a period of two years and subject to forfeiture if he voluntarily resigns prior to the end of that period.
Performance measures and related performance targets are set at the commencement of each financial year by the Committee. Company policy is to set such measures by reference to pre-tax EPS but the Committee retains flexibility to use different performance measures during the period of this policy if it considers it appropriate to do so.

At the threshold level of performance, 20% of the maximum bonus may be earned. A straight sliding scale of payments operates for performance between the minimum and maximum levels. There is no in-line target level although, for the purposes of the scenario charts, 50% of maximum bonus has been assumed because it is the mid-point.
At present Company policy is to provide a maximum bonus of 150% of salary for the Chief Executive and 100% of salary for other executive directors.

Although the Committee has no current plan to make any changes, for the period of this policy the Committee reserves flexibility to:
  • increase maximum bonus levels for executive directors in any financial year to 200% of salary. This flexibility would be used only in exceptional circumstances and where the Committee considered any such increase to be in the best interests of shareholders and after appropriate consultation with key shareholders;
  • lessen the current differentials in bonus maximums which exist between the Chief Executive and other executive directors; and
  • introduce or extend an element of compulsory deferral of bonus outcomes if considered appropriate by the Committee.
While the Committee reserves flexibility to apply different performance measures, it currently uses stretching pre-tax EPS growth targets set annually, which take account of factors including the Company's budgets and the wider background of the UK economy. Pre-tax EPS has been chosen as the basic metric to avoid executives benefitting from external factors such as reductions in the rate of corporation tax. There has to be growth in EPS before any bonus is payable to executive directors. By contrast the threshold for staff bonuses is set at a lower level than for directors. The Committee reserves flexibility to apply discretion in the interests of fairness to shareholders and executives by making adjustments it considers appropriate.

As noted in the Committee Chairman's Statement, the basis of performance measurement is changing to incorporate an appropriate adjustment to EPS growth to reflect the benefit to shareholders from special dividends paid in any period.
For the year to January 2014, performance targets were set requiring pre-tax EPS of 408p before any bonus became payable, being growth of 4.3% on the prior year. Maximum bonus of 150% and 100% of salary for the Chief Executive and the other executive directors respectively was payable if pre-tax EPS exceeded 446p, being growth of 14%.

Actual pre-tax EPS achieved was 460p, growth of 17.6%. Accordingly, a bonus of 150% of salary for the Chief Executive and 100% for the other executive directors was earned.

Bonus performance targets for the year ahead have been set but are not disclosed in advance for reasons of commercial sensitivity. The targets and performance will be disclosed in next year's Remuneration Report.

LTIP

To incentivise manage-ment to deliver superior total shareholder returns ("TSR") over three year performance periods relative to a selected group of retail companies.

Retention of key employees over three-year performance periods.
A variable percentage of a pre-determined maximum number of shares can vest, depending on relative TSR performance against the comparator group the Committee selects at grant (current practice is to select a comparator group of retail companies (shown in the scheme interests awarded table).

The maximum number of shares that may be awarded to each director is a percentage of each director's base salary at the date of each grant, divided by NEXT's average share price over the three months prior to the start of the performance period.

LTIP awards are made twice a year to reduce the volatility inherent in the TSR performance measure and to enhance the portfolio effect for participants of more frequent, but smaller, grants.
The Company has the option to settle vested LTIP awards in cash.

The LTIP does not credit participants with additional value in respect of dividends paid over any vesting period (except that the Committee has discretion to award such credit for special dividends).
Since 2008, the maximum aggregate annual award allowed under the current plan rules has been over shares worth 200% of base salary (and up to 300% in exceptional circumstances). With effect from 2012, the maximum value of any LTIP awards that vest for a participant in a year has been capped at £2.5m.

Within this maximum, the Chief Executive and other executive directors receive grants equal to 100% and 75% of annual salary respectively every six months. The Committee reserves the right to vary these levels within the overall annual limits described above.

For 2014 onwards, the Committee has decided that the maximum possible aggregate value of awards granted to all executive directors will be 200% of annual salary (i.e. 100% every six months). The Committee reserves the right to vary these levels within the overall annual limits described above. In addition, awards granted to executive directors which vest must be taken in shares and the net shares (after payment of tax and NIC) must be held for a minimum period of two further years. The Committee reserves the right to lengthen (but not reduce) the performance period and to introduce a retention period or to further increase this holding period.

In light of the cessation of further grants under the SMP (see below), the Committee has reviewed the cap on the maximum value of LTIPs vesting for any participant in any one year and has decided it is appropriate to remove the cap for LTIP awards granted to executive directors after January 2014. The £2.5m cap will remain in force for vesting LTIPs with three year performance periods ending in financial years to January 2015 and January 2016.
Performance is measured over periods of three years, which commence in February and August, by measuring NEXT's TSR against a group (currently 20 other UK listed retail companies) which are, in the view of the Committee, most comparable with NEXT in size or nature of their business. Comparison against such a group is more likely to reflect the Company's relative performance against its peers, thereby resulting in grants being made on an appropriate basis.

Relative performancePercentage vesting
Below median0%
Median20%
Upper quintile100%

If no entitlement has been earned at the end of a three year performance period then that award will lapse; there is no retesting.

Before any of the awards vest, the Committee must have regard to the performance of the Company in the light of underlying economic and other circumstances, including EPS performance of the Company and of other UK retailers over the period. Whilst not disclosed in advance, the factors taken into account for these purposes are disclosed in the relevant year's Remuneration Report.

The Committee reserves flexibility to apply different performance measures and targets in respect of new grants for the period of this policy.
The grant that matured in July 2013 vested 100% as the TSR ranked fourth out of 21 in the comparator group. The Committee also assessed the performance of NEXT during the performance period and determined that the economic underpin performance condition had been satisfied.

The grant that matured in January 2014 also vested at 100% as the TSR ranked third out of 21 in the comparator group. The Committee also determined that the economic underpin performance condition had been satisfied.

For recent policy related changes please see commentary in the Maximum potential value column to the left.

SMP

To encourage greater ownership of NEXT shares by senior executives, excluding executive directors, and thereby further align their interests with shareholders.
Participants who invest a proportion of any annual cash bonus in NEXT shares can receive up to a maximum of two times the original number of shares they purchase with their bonus. Any matching is conditional upon achieving performance measures over the following three years.

The Committee's policy is to set such performance measures by reference to fully diluted post-tax earnings per share but the Committee retains flexibility to use different measures during the period of this policy if it considers it appropriate to do so, including adjustments to reflect the benefit to shareholders from special dividends.

As noted in the Committee Chairman's statement, executive directors will no longer be granted awards under the SMP after January 2014 and participation will be restricted to senior executives below Board level, although the Committee reserves flexibility to re-introduce executive director participation within the period of this policy if it considers it appropriate to do so.

The SMP does not credit participants with additional value in respect of dividends paid over any vesting period (except that the Committee has discretion to award such credit for special dividends).
The maximum matching ratio available under SMP is 3:1, matching the pre-tax equivalent of the amount invested in shares.

Within this maximum matching ratio, a match of up to 2:1 based on the actual number of investment shares has been offered in practice, although the Company retains flexibility within the period of this policy to offer a different matching ratio within the scope of the maximum ratio set out above.
Although the Company reserves flexibility to apply different performance measures, the Committee currently uses measures based on stretching fully diluted post-tax EPS targets.

The targets for awards in each year will be detailed in the report and accounts.
Participants (i.e. senior executives below Board level only) can invest all of their post-tax bonus in the SMP in 2014. In 2013 the Chief Executive was allowed to invest £200,000 and other executive directors £150,000. The matching award remains at a maximum of two times the number of shares purchased by the participants.

The minimum match of 0.5 of a share requires fully diluted EPS growth of 12% and the maximum match of two times requires growth of 30% over the three year performance period

Pension

To provide for retirement through Company sponsored schemes or a cash alternative for personal pension planning.
All executive directors are deferred members of the defined benefit ("DB") section of the 2013 NEXT Group Pension Plan ("the Plan").

In addition to being deferred members of the DB section of the Plan, Lord Wolfson and Christos Angelides are members of the unfunded, unapproved supplementary pension arrangement ("SPA"), described in the defined benefit section. Their future pensions will be calculated by reference to their October 2012 salaries, rather than final earnings, and future salary changes will have no effect.

Jane Shields and David Keens ceased to contribute to the Plan in 2011 and Michael Law in 2012. Their pensions are no longer linked to salary and will increase in line with statutory deferred revaluation only (i.e. in line with CPI).

Executive directors receive salary supplements of 15% in lieu of past changes to their pension arrangements, in line with other senior employee members of the DB benefit section of the Plan.

New employees of the Group can join the defined contribution ("DC") section of the NEXT Plan or the statutory Auto-Enrolment plan, described in the defined benefit section.

Bonuses are not taken into account in assessing pensionable earnings in the Plan.
Under the DB section and the SPA, the maximum potential pension is only achieved on completion of at least 20 years pensionable service at age 65, when two thirds of the executive director's annual pensionable salary at October 2012 could become payable. The lump sum payable on death is four times base salary.

No DC contributions, or equivalent salary supplement payments, will be made to an executive director in any year that will exceed the median level of contributions or payments made to FTSE 100 Chief Executives as at the time the rate is set, as confirmed by independent advisers to the Committee.
Not applicable.Not applicable.

Other benefits

To provide market competitive non-cash benefits.
Executive directors receive benefits which may include the provision of a company car or cash alternative, private medical insurance, subscriptions to professional bodies and staff discount on Group merchandise. A driver is also made available to the executive directors for business purposes.

The Committee reserves discretion to introduce new benefits where it concludes that it is in the interests of NEXT to do so, having regard to the particular circumstances and to market practice and reserves flexibility to make relocation related payments.

Whilst not considered necessarily to be benefits, the Committee reserves the discretion to authorise attendance by directors and their family members (at the Company's cost if required) at corporate events and to receive reasonable levels of hospitality in accordance with Company policies.
During the policy period, the value of benefits (other than relocation costs) paid to an executive director in any year will not exceed £100,000. In addition, the Committee reserves the right to pay up to £250,000 relocation costs in any year to an executive director if considered appropriate to secure the better performance by an executive director of their duties.

During the policy period, the actual level of taxable benefits provided will be included in the Single Total Figure of Remuneration.
Not applicable.Not applicable.

Save As You
Earn Scheme

To encourage all employees to make a long term investment in the Company's shares.
Executive directors can participate in the Company's Save As You Earn (Sharesave) scheme which is HMRC approved and open to all employees. Option grants are generally made annually, with the exercise price discounted by a maximum of 20% of the share price at the date an invitation is issued. Options are exercisable three or five years from the date of grant. Alternatively, participants may ask for their contributions to be returned.Investment currently limited to a maximum amount of £250 per month but may increase in line with new limits set by HMRC.Not applicable.Monthly savings limit may be increased to £500 in line with new limits set by HMRC.

Termination payments

Consistent with market practice, to ensure NEXT can recruit and retain key executives, whilst protecting the Company from making payments for failure.
The Committee will consider the need for and quantum of any termination payments having regard to all of the relevant facts and circumstances at that time.

Future service contracts will take into account relevant published guidance.
Each of the executive directors has a rolling service contract which commenced on either 14 March 2013 or, for Michael Law and Jane Shields, on 1 July 2013. The contract is terminable by the Company on giving one year's notice. The Company has reserved the right to make a payment in lieu of notice on termination of an executive director's contract equal to their base salary and contractual benefits (excluding performance-related pay).

If notice of termination is given immediately following a change of control of the Company, the executive director may request immediate termination of his contract and payment of liquidated damages equal to the value of his base salary and contractual benefits.

In normal circumstances executives have no entitlement in respect of loss of performance bonuses and all share awards would lapse following resignation. However, under certain circumstances (e.g. 'good leaver' or change in control), and solely at the Committee's discretion, annual bonus payments may be made and would ordinarily be calculated up to the date of termination only. In addition, awards made under the LTIP and SMP would in those circumstances generally be time pro-rated and remain subject to the application of the performance conditions at the normal measurement date. The Committee also has a standard discretion to vary the application of time pro-rating in such cases. "Good leaver" treatments are applied in exceptional cases only.

In the event of any termination payment being made to a director (including any performance-related pay elements), the Committee will take full account of that director's duty to mitigate any loss and, where appropriate, may seek independent professional advice and consider the views of shareholders as expressed in published guidance prior to authorising such payment.

Consistent with market practice, in the event of removal from office of an executive director, the Company may pay a contribution towards the individual's legal fees and fees for outplacement services as part of a negotiated settlement and such other amounts as the Committee considers to be necessary, having taken legal advice, in settlement of potential claims. Any such fees would be disclosed with all other termination arrangements. The Committee reserves the right, if necessary, to authorise additional payments in respect of such professional fees if not ascertained at the time of reporting such termination arrangements up to a maximum of £10,000.

A departing gift may be provided up to a value of £1,000 (plus related taxes) per director
Not applicable.No compensation payments on termination of employment were made during the year.

Claw-back/malus

To ensure the Company can recover any payments made or potentially due to executive directors under performance-related remuneration structures.
Claw-back provisions are in service contracts of all executive directors and will be enforced where appropriate to recover performance-related remuneration which has been overpaid due to: a material misstatement of the Company's accounts; errors made in the calculation of an award; or a director's misconduct. These provisions allow for the recovery of sums paid and/or withholding of sums to be paid.Not applicable.Not applicable.No claw-back or malus adjustments made in period.

Chairman and non-executive director fees

To ensure fees paid to the Chairman and non-executive directors are competitive and comparable with other companies of equivalent size and complexity.
Remuneration of the non-executive directors is reviewed annually and determined by the Chairman and the executive directors. The Chairman's fee is determined by the Committee (excluding the Chairman).

Additional fees are paid to non-executive directors who chair the Remuneration and Audit Committees, and act as the Senior Independent Director. The structure of fees may be amended within the overall limits.

External benchmarking is undertaken only occasionally and there is no prescribed policy regarding the benchmarks used or any objective of achieving a prescribed percentile level.
The total of fees paid to the Chairman and the non-executive directors in any year will not exceed the maximum level for such fees from time to time prescribed by the Company's articles of association (currently £750,000 per annum).Non-executive directors receive staff discount on Group merchandise but do not participate in any of the Group's bonus, pension, share option or other incentive schemes.The fees of the Chairman and non-executive directors were increased by 2% in February 2014, in line with the wider company cost of living awards. The Chairman will be paid an annual fee of £260,100 (2013/14: £255,000). The basic non-executive director fee is £53,550 (2013/14: £52,500), with a further £10,710 (2013/14: £10,500) paid to the Chairmen of the Audit and Remuneration Committees, and to the Senior Independent Director.

The following principles will be applied on an internal appointment, or the recruitment of an external candidate, to the Board.

The policies as set out above would apply to the promotion of an existing group employee to the Board.

For such appointments, and unless agreed otherwise with the new director, the Company will honour the contractual entitlements and other incentives (e.g. options granted under the NEXT Management Share Option Plan) awarded prior to the board appointment.

For external recruits, the Committee will also aim to structure and agree a package which is in line with the same policies for existing executive directors as set out above. However, consistent with the new regulations, the Committee reserves the right not to apply the caps contained within the policy for fixed pay, either on joining or for any subsequent review within the life of this policy, although the Committee would not envisage exceeding these caps in practice. In addition, the Committee may offer cash or share-based incentives when considered to be necessary to secure a candidate and in the best interests of the Company and its shareholders. It may be necessary to make such awards on more bespoke terms which differ from NEXT's existing annual and share-based pay structures. However, the Committee will not authorise the payment of more than it considers necessary and will abide by the caps for such elements within the general policy.

Additional awards may be made to compensate for forfeiture of incentive awards in the previous employer, and may not be subject to the caps applied to NEXT's annual bonus plan or the LTIP. All such awards for external appointments, whether made under the annual bonus plan, LTIP or otherwise, will be limited to the commercial value of the amounts forfeited and will take account of the nature, time periods and performance requirements of those awards. In particular the Committee's starting point will be that any forfeited awards which are subject to continued service or performance requirements are replaced by NEXT awards with broadly equivalent terms. However, the Committee may relax these requirements in exceptional circumstances and where the Committee considers it to be less expensive for shareholders, for example where service periods are materially complete and/or the replacement awards are materially discounted to reflect the conditions on forfeited awards. The Committee will only authorise guaranteed or non pro-rated awards under the annual bonus plan where the Committee considers it is necessary to secure a recruitment.

For external and internal appointments, the Committee may agree the Company will meet such relocation expenses it considers appropriate and/or make a contribution towards legal fees in agreeing employment terms.

The Company has not made an external appointment of an executive director for over 25 years and therefore no recruitment awards were made during the year. All such appointments during this time have been through internal promotions, so it is challenging to set out principles for an event that has not occurred in practice. Therefore the above principles, particularly for external appointments, represent guidelines considered reasonable by the Committee and the Committee will consider their application in practice, taking account when appropriate of evolving best practice.

Share ownership guidelines

Share ownership guidelines do not form part of directors' remuneration but the Committee has determined that these should be observed by executive directors.

The Chief Executive's minimum shareholding is 1.5 times salary and for other executive directors 1 times salary. An executive director has up to five years from date of appointment to acquire the minimum shareholding and only shares owned beneficially are counted. All executive directors, including the new appointees, have met the minimum shareholding and Lord Wolfson, Christos Angelides and David Keens each hold numbers of NEXT shares with a value significantly in excess of the applicable guidelines.

Service contracts

Executive directors

The Company's policy on notice periods and in relation to termination payments is set out in the remuneration policy table above. Apart from their service contracts, no director has had any material interest in any contract with the Company or its subsidiaries.

Non-executive directors

Letters of appointment for the Chairman and non-executive directors do not contain fixed term periods; however they are appointed in the expectation that they will serve for a minimum of six years, subject to satisfactory performance and re-election at Annual General Meetings.

Dates of appointment and notice periods for non-executive directors are set out below:

Date of appointmentNotice period
Chairman
John Barton17 May 200612 months
Non-executive directors
Steve Barber1 June 20071 month
Christine Cross19 January 20051 month
Jonathan Dawson13 May 20041 month
Caroline Goodall1 January 20131 month
Francis Salway1 June 20101 month

Illustration of application of remuneration policy

The Committee's objective is to ensure that the remuneration paid to senior executives is appropriate in both amount and structure, is directly linked to the Company's annual and longer term performance and aligned with the interests of shareholders. Careful consideration is given to ensuring there is an appropriate balance in the remuneration structure between annual and long term rewards, as well as between cash and share-based payments. The charts below indicate the level of remuneration that could be received by each executive director in accordance with the directors' remuneration policy in the first year to which the policy applies (i.e. year to January 2015) at different levels of performance.

In the above scenarios, the following assumptions have been made:

FIXED AND PERFORMANCE-RELATED PAY ASSUMPTIONS
Fixed
  • Base salary for 2014 (see table above);
  • Benefits as at February 2014;
  • Pension-related salary supplements calculated at 15% of base salary for 2014; and
  • Pension amounts based on 2013/14 single total figure of remuneration pension values (for Lord Wolfson and Christos Angelides only.)
Mid-point/
median
Includes the performance-related pay a director would receive in the scenario where:
  • 50% of maximum annual bonus is earned (being the mid-point); and
  • LTIP1 pay out is at median and therefore 20% of the maximum award would vest. LTIP values apply to both awards made in the year.
MaximumIncludes the performance-related pay a director would receive in the scenario where performance equalled or exceeded maximum targets:
  • 100% of the annual bonus; and
  • 100% vesting of LTIP1.
  1. The LTIP is a share-based award and the scenario charts use the face value of shares at the date of the award and do not make any assumptions for share price movement. The LTIP scheme does not allow for the benefit of dividend gross-up.

The table below illustrates when the various payments in the charts above would actually be made or released to executive directors.

Settlement of remuneration awarded during the financial year to january 2015

To be settled during financial year ending

JAN 2015JAN 2016JAN
2017
JAN 2018JAN
2019
JAN 2020
Base salary
Benefits
Annual performance for the year to January 2015 is measured against targets and any annual cash bonus is paid. For the Chief Executive, any bonus in excess of 100% of base salary is deferred for two years and payable in shares dependent on continued employment.LTIP awards vest and are payable in shares if TSR is at or above median for the comparator group and general economic underpin condition satisfied. Directors must retain these shares (after payment of tax and NIC) for a further two years.

Any bonus earned by the Chief Executive for the Jan 2015 year in excess of 100% of base salary, payable in shares, is released.
LTIP shares which vested in the year to January 2018 are released after two year retention.

Next employment conditions generally

The remuneration policy operates for the executive directors and senior management of the Group. Pay structures and employment conditions for other Group employees are driven by market and role comparatives and are also considered by the Committee to ensure that any differences for directors are justified. Salary increases for the wider employee group are taken into consideration when determining increases for executive directors and senior management. For the last 3 years, the base salary increases for the executive directors have generally been in line with wider company awards.

In common with executive directors, all other employees are eligible to participate in annual bonus arrangements. The targets for these are linked to performance of the group, their operating function or personal performance.

These other employees are provided with a competitive package of benefits that includes the opportunity to participate in the Group's pension arrangements and staff discount on Group merchandise. In addition, the NEXT Management Share Option Plan provides for options over shares, exercisable between three and ten years following their grant, to be allocated to Group employees. This plan is primarily aimed at middle management and senior store staff. Options are set at the prevailing market price at the time of grant, and are generally granted annually. In order to encourage wider employee share ownership, the Company also operates all-employee Save as You Earn share schemes in the UK and Ireland, in which all permanent employees (including executive directors) are eligible to participate.

The Company did not consult with employees when drawing up the directors' remuneration policy. The Committee does not generally use any formal internal comparison metrics when setting directors' remuneration, other than the consideration of employee pay as described above, but has sought advice from FIT Remuneration Consultants LLP from time to time on the appropriateness and competitiveness of remuneration structures in place within the Company. No formal benchmarking exercise was undertaken during the year.

Consideration of shareholder views

The Remuneration Committee has written to and consulted with major shareholders on a pro-active basis when any significant change in remuneration policy has been considered and has taken full account of their feedback. Shareholder views about remuneration are also communicated to the Committee on an on-going basis through inclusion in Board reports of shareholder feedback and statements made by representative associations. In addition, the Committee Chairman and the Chairman of the Board have from time to time engaged directly with shareholders and representative bodies on any particular matters they may have raised. Shareholders and representative bodies are able to contact the Committee Chairman directly if they have any concerns regarding remuneration.