TERMS OF REFERENCE OF THE REMUNERATION COMMITTEE (the Committee ) OF THE BOARD OF DIRECTORS (the Board ) OF INTERSERVE PLC (the Company )

Transcription

1 TERMS OF REFERENCE OF THE REMUNERATION COMMITTEE (the Committee ) OF THE BOARD OF DIRECTORS (the Board ) OF INTERSERVE PLC (the Company ) 1. Membership 1.1 The Committee shall comprise of at least three members, each of whom shall be appointed by the Board on the recommendation of the Nomination Committee and in consultation with the Committee Chairman. 1.2 All members of the Committee shall be non-executive directors who are independent of management and free from any business or other relationship which could interfere with the exercise of their independent judgement. 1.3 The Group Chairman may also serve on the Committee as an additional member if he or she was considered independent on appointment as Group Chairman. 1.4 The Board shall appoint the Chairman of the Committee who shall be an independent non-executive director and determine the period for which he or she shall hold office. The Group Chairman shall not be Chairman of the Committee. In the absence of the Committee Chairman, the remaining members present shall elect one of their number to chair the meeting who would qualify under these terms of reference to be appointed to that position by the Board. 1.5 Appointments to the Committee shall be for a period of up to three years, which may be extended for two further three-year periods, provided the director still meets the criteria for membership of the Committee. 2. Secretary 2.1 The Company Secretary or his or her nominee shall act as Secretary of the Committee, who will ensure that the Committee receives information and papers in a timely manner to enable full and proper consideration to be given to the issues. 3. Quorum 3.1 The quorum necessary for the transaction of business shall be two. 3.2 A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in, or exercisable by, the Committee. 4. Meetings 4.1 The Committee shall meet at least twice in each financial year of the Company and at such other times as the Committee Chairman shall require. 4.2 No one other than the Committee Chairman and its members shall be entitled to be present at any meeting of the Committee. Others may be called upon to attend 1

2 and/or speak at any meeting of the Committee as may be determined by the Committee from time to time. 4.3 The Chief Executive shall have the right to address any meeting of the Committee except where specifically personally conflicted. 5. Notice of Meetings 5.1 A meeting shall be called by the Secretary at the request of any member of the Committee. 5.2 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, no later than five working days before the date of the meeting, to each member of the Committee, and to any other person attending such meeting as may be appropriate. 6. Minutes of Meetings 6.1 The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance. 6.2 In advance of, or at the beginning of each meeting, each member of the Committee and those in attendance shall indicate the existence of any conflicts of interest, which shall be minuted accordingly. 6.3 Draft minutes of the Committee meetings shall be circulated promptly to all members of the Committee. Once approved, minutes shall be circulated to all other members of the Board unless a conflict of interest exists. 7. Annual General Meeting 7.1 The Committee Chairman shall attend the Annual General Meeting to respond to any shareholder questions on the Committee s activities. 8. Duties The Committee shall: 8.1 determine and agree with the Board the remuneration policy for the executive directors, the Company Secretary and, in conjunction with the executive directors, the Group Chairman. The remuneration of non-executive directors shall be a matter for the Group Chairman and the executive members of the Board. No person shall be involved in any decisions as to his or her own remuneration. The Company shall give notice of the intention to move a resolution to approve the remuneration policy for the directors at every third Annual General Meeting of the Company or, if earlier, such other Annual General Meeting or Extraordinary General Meeting of the Company, as the Board shall determine; 8.2 in determining such policy, consider how it reflects and supports the Company s long-term strategic goals and its compatibility with the Company s risk policies and systems, and take into account pay and employment conditions elsewhere in the Group, especially when determining annual salary increases. The objective of such policy shall be to promote the long-term success of the Company; 2

3 8.3 review the ongoing appropriateness and relevance of the remuneration policy; 8.4 not authorise any payment or proposed payment to any existing, proposed or previous executive director or Group Chairman that the Committee does not reasonably believe is consistent with the remuneration policy most recently approved by shareholders (the Approved Policy ). Prior to any changes being made to the remuneration of the executive directors or Group Chairman, the agreement of the remuneration package of any proposed executive director or Group Chairman prior to appointment, the agreement of the terms of any settlement with any departing executive director or Group Chairman and at such other times considered appropriate by the Committee Chairman, the Committee shall ensure that payments and proposed payments are consistent with the Approved Policy; 8.5 liaise with the Nomination Committee to ensure that the remuneration of newlyappointed executive directors or Group Chairman is consistent with the Approved Policy; 8.6 subject to paragraph 8.4: determine the design of, and targets for, any performance-related pay schemes operated by the Company and approve the total annual payments made under such schemes (in accordance with the provisions of Schedule A of the UK Corporate Governance Code), asking the Board, when appropriate, to seek shareholder approval for any long-term incentive arrangement; review the design and implementation of all share incentive plans for approval by the Board and, where required, shareholders; determine each year whether awards will be made under the Company s share incentive plans, and if so, the overall amount of such awards and the individual awards and the performance targets to be used; and administer the exercise of any share awards granted to any director or employee under any Company share incentive plan as may be in force from time to time; after consultation with the Group Chairman and/or the Chief Executive (except where specifically personally conflicted), determine the total individual remuneration and benefits package of the executive directors and the Company Secretary (including, where appropriate, any bonuses, incentive payments and share options including consideration of the incorporation of provisions to enable variable components to be reclaimed in the event of misstatement or misconduct); determine the policy for and scope of pension arrangements for the executive directors; determine the conditions and terms of service agreements of the executive directors, including termination payments and compensation commitments and, in conjunction with the executive directors, the terms of appointment of the Group Chairman; and 3

4 8.6.7 ensure that contractual terms on termination, and any payments made, are fair to the individual, and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised; 8.7 in determining such packages and arrangements, give due regard to the comments and recommendations of the UK Corporate Governance Code as well as the UK Listing Authority s Listing Rules and associated guidance. 8.8 determine the conditions and terms of service for and recommend and monitor the level and structure of remuneration for senior management 1 ; 8.9 review and note annually the remuneration trends across the Group; 8.10 be aware of and advise upon any major changes in employee benefit structures throughout the Group; 8.11 agree the policy for authorising the reimbursement of any claims for expenses from the Chief Executive and Group Chairman; 8.12 determine the policy and approval process for executive directors and other senior management taking up external non-executive appointments; and 8.13 obtain reliable, up-to-date information about remuneration in other companies and commission any reports or surveys which it deems necessary to help it fulfil its obligations. 9. Reporting Responsibilities 9.1 The Committee Chairman shall report formally to the Board on its proceedings after each meeting on all matters within its duties and responsibilities. 9.2 The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed. 9.3 The Committee shall ensure that all provisions regarding disclosure of remuneration, including pensions, as set out in the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended) or any other relevant regulations which may from time to time come into force, the Companies Act 2006 and the UK Corporate Governance Code, as amended from time to time (the Relevant Regulations ), are fulfilled. 9.4 The Committee shall produce an annual report on remuneration in a form consistent with the Relevant Regulations and ensure that the directors remuneration report, other than that part containing the directors remuneration policy, is put to an advisory vote of shareholders at each Annual General Meeting and that the directors remuneration policy is put to a vote of shareholders at least every three years and at the Annual General Meeting following any Annual General Meeting at which the advisory vote on the directors remuneration report is not passed. 1 Senior Management shall include all senior executives whose salary (excluding bonuses) exceeds 150,000. 4

5 9.5 The Committee shall report the frequency of, and attendance by members at, Committee meetings in the annual report. 10. Other The Committee shall: 10.1 at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval; 10.2 have access to sufficient resources in order to carry out its duties, including access to the company secretariat for assistance as required; 10.3 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; 10.4 ensure, through the Committee Chairman and/or any other member of the Committee appointed for the purpose, that the Company maintains contact as required with its principal shareholders about remuneration; and 10.5 give due consideration to laws and regulations, the provisions of the UK Corporate Governance Code and the requirements of the UK Listing Authority s Listing, Prospectus and Disclosure and Transparency Rules and any other applicable rules, as appropriate. 11. Authority The Committee is authorised by the Board to: undertake any activity within its terms of reference; 11.1 seek any information it requires from any employee of the Company in order to perform its duties. Where any executive director or senior management is involved in advising the Committee, the Committee shall be aware of and take steps to ensure that no conflict of interests arises; 11.2 establish the selection criteria, select, appoint and set the terms of reference for any remuneration consultants who advise the Committee, at the Company s expense; 11.3 in connection with its duties, obtain, at the Company s expense, any outside legal or other professional advice; and 11.4 make these terms of reference available through publication on the Company s website. [December 2015] 5