Royal Mail plc (the Company) Remuneration Committee (the Committee) - Terms of Reference

Transcription

1 Royal Mail plc (the Company) Remuneration Committee (the Committee) - Terms of Reference Membership and constitution 1. Membership 1.1. The Committee shall comprise at least three Non-Executive Directors. Committee members shall be appointed by the Board on recommendation from the Nomination Committee and in consultation with the Chair of the Remuneration Committee All members shall be Independent Non-Executive Directors. The Chairman of the Company may also serve on the Committee as an additional member if he or she was considered independent on appointment as Chairman of the Company Appointments to the Committee shall be for a period of up to three years, which may be extended for two further periods of up to three years, so long as members continue to be independent. 2. Chair 2.1. The Board shall appoint the Chair of the Committee who shall be an Independent Non- Executive Director. In the absence of the Committee Chair and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting who would qualify under these Terms of Reference to be appointed to that position by the Board. The Chairman of the Company shall not be Chair of the Committee The Committee Chair will maintain contact with shareholders on matters of executive remuneration. 3. Secretary 3.1. The Company Secretary or nominee shall act as the Secretary of the Committee. 4. Quorum 4.1. The quorum necessary for the Committee meetings shall be two Non-Executive Directors. 5. Attendees 5.1. Only Committee members have the right to attend Committee meetings. Non-members may be invited to attend all or part of any meeting, as and when appropriate. This may include individuals such as the Chief Executive Officer, the Group HR Director and external advisers who may be invited to attend. Other Non-Executive Directors may also be invited to attend Committee meetings by invitation. 1

2 5.2. No person (including Directors and the Chairman) of the Company shall participate at a meeting of the Committee (or during the relevant part) at which any part of their own remuneration is being directly discussed or participate in any recommendation or decision specifically concerning their remuneration. 6. Frequency of meetings 6.1. The Committee shall meet at least three times a year and otherwise as required. 7. Notice of meetings 7.1. Meetings of the Committee shall be called by the Secretary of the Committee at the request of the Committee Chair Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee and any other person required to attend, no later than five business days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees, as appropriate, at the same time. 8. Minutes of meetings 8.1. The Secretary or nominated representative shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance Minutes of Committee meetings shall be circulated to all Committee members. 9. Terms of Reference 9.1. These Terms of Reference may only be amended with the consent of the Board. 10. Annual General Meeting (AGM) The Committee Chair should attend the AGM to answer shareholder questions on the Committee s activities. Purpose and authority 11. The Committee is established as a Committee of the Board to carry out the duties set out in these Terms of Reference. The Committee reviews and approves objectives related to setting the policy for the remuneration of the executive management, determining targets for performancerelated pay or share schemes. 2

3 12. In fulfilling its duties, the Committee is authorised by the Board to: Obtain, at the Company's expense, outside legal or other professional advice on any matters within its Terms of Reference Seek any information it requires from any employee, consultant or contractor of the Company or any of its subsidiaries in order to perform its duties Appoint remuneration consultants and to commission or purchase any reports, surveys or information which it deems necessary, within any budgetary restraints imposed by the Board. The Committee shall be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee. Organisation of Committee 13. The Committee Chair shall formally report to the Board on the Committee s proceedings after each meeting on all matters within its Terms of Reference. It shall also formally report to the Board on how it has discharged its responsibilities The Committee shall make whatever recommendations to the Board, it deems appropriate, on any area within its remit where action or improvement is needed The Committee is authorised to investigate any activity within the scope of its duties and to intervene if the Committee considers it appropriate and/or if the Board instructs it to do so The Committee may delegate such of its duties and responsibilities to any one or more members of the Committee as it may deem appropriate having regard to the purpose of the Committee The Committee shall, at least once a year, review its own performance and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board The Committee shall have access to sufficient resources in order to carry out its duties, including access to Group Secretariat for assistance as required The Committee shall be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members. Duties 14. The Committee shall carry out the duties outlined below: In arriving at decisions relating to remuneration under its purview, consider all factors deemed necessary including legal and regulatory requirements, reference to the 3

4 objectives of the remuneration policy, and the views of shareholders and stakeholders as well as the long-term goals of the Company Approve the total compensation for the Chairman of the Company, in consultation with the Chief Executive Officer. The remuneration of the Non-Executive Directors shall be a matter for the Chairman and the Executive Directors of the Board Determine each element of the individual remuneration packages for each Executive Director, the Company Secretary, the Chief Executive s senior direct reports and other members of the Group s Executive Team (both current and former members), including: base salary; pension provision and the provision of other benefits; the specific structure of short term incentive provision (including the quantum and performance measures); the specific structure of long-term incentive provision (including award levels and performance measures); and specific other contractual terms (including, but not limited to, notice periods), ensuring that failure is not rewarded and that the duty to mitigate loss is fully recognised In the event that changes need to be made to the remuneration policy approved by the Company s shareholders, the Committee will consult with significant shareholders and will seek to obtain shareholder approval at the next available AGM Approve the framework and broad policy for the remuneration of other members of the senior leadership population and other senior direct reports to the Chief Executive Officer, including: the general approach to how fixed pay and total remuneration levels should compare to appropriate benchmarks in terms of quantum and structure; the general approach to pension provision and the provision of other benefits; the basic structure of short term incentive provision (including the general approach to quantum and performance measures); eligibility for, and design of, long-term incentive provision; and the general approach to other contractual terms (including, but not limited to, notice periods) Review, on an annual basis, the ongoing appropriateness and relevance of the senior remuneration framework and broad policy, including its link to the long-term success of the Company Recommend for approval to the Board the design and specific operation of all long-term incentive plans in which senior executives participate. For any such plans, determine each year whether awards will be made and, if so, the overall amount of such awards, the individual awards to those employees whose individual remuneration arrangements the Committee specifically determines under paragraph 14.3 above and the performance targets to be used. 4

5 14.8. Consider and review the risk implications in respect to the design, implementation and operation (including payout) of senior executive remuneration arrangements across the Company and undertake an annual review to confirm that the Company's senior executive remuneration policies and practices remain compatible with the Company's risk policies and systems Approve the remuneration package to be offered to any new employee whose individual remuneration arrangements the Committee specifically determines under paragraph 14.3 above Approve the overall pay and reward (including employee benefits) for staff and negotiating remit for negotiations with any recognised trade union The Committee shall be exclusively responsible for establishing the selection criteria, selecting, appointing and setting terms for any remuneration consultants that advise the Committee When fulfilling its duties under the above paragraphs, the Committee shall have regard to remuneration policies and practices across the Company as a whole In relation to the above, the Committee shall at all times give due regard to published or other available information relating to pay, incentives and other benefits of executives in companies which are comparable to the Company. The Committee shall have full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations The Committee will be responsible for agreeing a policy for authorising expenses for Directors The Committee Chair will be responsible for seeking approval for the Company's remuneration arrangements from the significant shareholders as required The Committee shall produce prepare a report of the Company's remuneration policy for Board approval at least every three years, and annually and Directors' remuneration report for the year, to be included in the Company's annual report, and recommend these to the Board for approval. This report should include all information requirements set out in the UK Corporate Governance Code and relevant legislation and regulation. Further, that this report will be compliant with the all required regulations and will; identify the remuneration consultants used, and state whether they have any other connection with the Company; and consult with shareholders in light of any negative vote against the report and agree any appropriate associated disclosure with the Board. May