Adopted by resolution of the Board on 26 April 2016 FLYBE GROUP PLC. Remuneration Committee Terms of Reference

Transcription

1 Adopted by resolution of the Board on 26 April 2016 FLYBE GROUP PLC Remuneration Committee Terms of Reference

2 FLYBE GROUP PLC (the Company) REMUNERATION COMMITTEE TERMS OF REFERENCE In these Terms of Reference the following terms shall have the following meanings: Board shall mean the Board of Directors of the Company; Committee shall mean the Remuneration Committee; and Remuneration Policy shall mean the policy for the purpose of directors remuneration arrangements approved or to be approved by shareholders of the Company in accordance with the Companies Act PURPOSE These Terms of Reference have been produced to identify and formalise the roles, tasks responsibilities and authority of the Committee for compliance with the UK Corporate Governance Code and to assist the Committee in taking due account of best practice in corporate governance for the Company. The purpose of the Committee is to: i. establish and follow a formal and transparent procedure for developing appropriate strategy for remuneration; ii. iii. iv. setting the Remuneration Policy for all executive directors and the Company s chairman, including pension rights and compensation payments; setting the remuneration packages of individual directors; exercising authority and discretions vested in the Committee in relation to remuneration decisions under the Company s performance-related longterm incentive schemes; and v. ensuring that the Remuneration Policy supports the long-term success of the company will also ensure that it does not promote inappropriate risktaking.

3 2. CONSTITUTION AND MEMBERSHIP 2.1 The Committee has been established as a committee of the Board by resolution of the Board. 2.2 The members of the Committee shall be appointed by the Board, on the recommendation of the nomination committee and in consultation with the chairman of the Committee. The Committee shall (unless the Company meets the smaller company criteria of the UK Corporate Governance Code) comprise at least three members, all of whom shall be independent non-executive directors. In the event that the Company meets the smaller company criteria of the UK Corporate Governance Code, the Committee shall comprise at least two independent non-executive directors. 2.3 In addition the Company chairman may also be a member of the Committee if he or she was considered independent on appointment as chairman. 2.4 The chairman of the Committee shall be appointed by the Board, on the recommendation of the nomination committee. In the absence of the chairman of the Committee, the members present shall select one of their number present to chair the meeting. The chairman of the Company shall not be eligible to be appointed as chairman of the Committee. 2.5 Appointments to the Committee shall be for a period of up to three years. Such appointment may then be extended by no more than two additional periods of up to three years, provided the member continues to meet the criteria for membership of the Committee. 2.6 The Company Secretary or his or her nominee shall act as the secretary of the Committee (Secretary) and 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. Where the Company Secretary is also an executive director, the Committee may nominate one of its members to act as secretary for any meeting which the Committee wishes to hold without executive directors being present. 2.7 The Secretary shall also act as the co-ordinating intermediary between the Board and the Committee. 3. ATTENDANCE Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the chairman of the Company, Chief Executive Officer, Chief Financial Officer and Executive Committee members or other senior managers may be invited to attend all or part of any meeting of the Committee, as and when appropriate. No member of the Board (or of the Committee) shall attend the meetings or part of the

4 meetings of the Committee where his or her own remuneration arrangements are determined. The Chief Executive Officer shall have the right to address any meeting of the Committee. MEETINGS 3.1 The Committee will meet at least twice each year, and at such other times as the chairman of the Committee shall think fit. Meetings shall be organised so that attendance is maximised. 3.2 Meetings of the Committee shall be convened by the Secretary of the Committee at the request of any member of the Committee or chairman of the Committee. 3.3 Unless otherwise agreed by all members of the Committee, notice of meetings, confirming the venue, time and date together with an agenda, should normally be circulated to each member of the Committee, to any other person required to attend, at least five working days prior to the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time. 3.4 The quorum necessary for the transaction of business of the Committee shall be three members. 3.5 Meetings of the Committee may be conducted when the members are physically present or in the form of either video or audio conferences. 3.6 Decisions of the Committee will be made by majority vote. In the event of an equality of votes the chairman of the Committee will have a second or casting vote. 3.7 The Committee may invite such persons as it considers appropriate to attend all or any part of any meeting, as and when appropriate. 4. REPORTING 4.1 Sufficient time should be allowed after Committee meetings for the Committee to report to the Board on the nature and content of discussion, on recommendations, and on actions to be taken. The Secretary shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance and shall ensure the Committee is properly constituted and advised. 4.2 The Secretary shall ascertain, at the beginning of each meeting, the existence of any conflicts of interest and minute them accordingly.

5 4.3 Draft minutes of Committee meetings shall be circulated promptly to all members of the Committee and, once agreed, to all members of the Board, and to the Company Secretary unless it would be inappropriate to do so. 4.4 The Committee chairman shall report to the Board on its proceedings after each meeting on all matters within its duties and responsibilities. 4.5 The Committee shall ensure that (if applicable) the provisions regarding disclosure of information, as set out in the Large and Medium Sized Companies and Groups (Accounts & Reports) Regulation 2008 and the UK Corporate Governance Code are fulfilled and shall produce a report of the company s Directors Remuneration practices to be included in the Company s annual report and accounts and ensure each year that it is put to shareholders for approval at the AGM. If the Committee has appointed remuneration consultants, the annual report of the Company s remuneration policy should identify such consultants and state whether they have any connection with the Company. 4.6 The Committee shall submit for approval by the Board and the shareholders at the AGM a directors Remuneration Policy: at least every three years; or earlier if applicable; in any year where there is a material change to the Remuneration Policy; or in other case of any minor amendment to the Remuneration Policy, prior to the payment under any policy which are affected by the minor change; or if shareholder approval was not achieved when the Remuneration Policy was last submitted; or if majority shareholder approval was not achieved on the last occasion that the directors remuneration report was put to shareholders for approval at the AGM. 4.7 The Committee shall make whatever recommendations to the Board that it deems appropriate on an area within its remit where action or improvement is needed. 4.8 The chairman of the Committee should be present at the Company s annual general meeting to respond to questions on matters within the responsibility of the Committee. 4.9 Through the chairman of the Board, ensure that the Company maintains contact as required with its principal shareholders about remuneration.

6 4.10 The Committee shall make available these Terms of Reference by placing them on the Company s website. 5. DUTIES OF THE COMMITTEE The Committee should carry out the duties below for the Company, major subsidiary undertakings and the Group as a whole, as appropriate. The Committee shall: 5.1 determine and agree with the Board the framework or broad policy for the remuneration of the Chief Executive Officer, all other executive directors and the chairman of the Company. The remuneration of non-executive directors shall be a matter for the executive members of the Board, within the limits set by the articles of association, save that the Committee shall consider and make recommendations to the Board for its decision on the remuneration of the chairman, following consultation between the chair of the Committee and the Chief Executive Officer. No director or manager shall be involved in any decisions as to his or her own remuneration. In order to ensure his independence, the Committee shall also review and recommend to the Board the remuneration of the Company Secretary; 5.2 in determining the remuneration policy, take into account all factors which the Committee deems necessary including relevant legal and regulatory requirements, the provisions and recommendations of the UK Corporate Governance Code and associated guidance. The objective of the policy shall be to promote the longterm success of the Company. Performance elements should be transparent, stretching and rigorously applied. Remuneration incentives should be compatible with risk policies and systems; 5.3 liaise with the Nomination Committee to ensure that the remuneration of newly appointed executives is within the Company s overall policy; 5.4 when setting remuneration policy for directors, review and have regard to the remuneration trends within the Company s sector and with regard to remuneration levels across the Group (especially when determining fixed or variable pay opportunity increases); 5.5 review the ongoing appropriateness and relevance of the Remuneration Policy; 5.6 within the terms of the agreed policy and in consultation with the chairman and/or Chief Executive, as appropriate, determine the total individual remuneration package of each executive director and the Company Secretary, including bonuses, incentive payments and share options or other share award scheme;

7 5.7 within the terms of the agreed policy and following consultation with the Chief Executive, to consider and recommend to the Board the remuneration of the chairman; 5.8 obtain reliable, up-to-date information about remuneration in other companies. To help it fulfil its obligations the Committee shall have full authority to 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; 5.9 be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee; 5.10 approve the design of, and determine targets for, any performance-related pay schemes (both short and long-term) operated by the Company and approve the total annual payments made under such schemes; 5.11 review the design of all share incentive plans for approval by the Board and shareholders. 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 executive directors, Company Secretary and Executive Committee members, and the performance be used; 5.12 determine the policy for, and scope of, pension arrangements for each executive director; 5.13 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 appropriately recognised; 5.14 oversee any major changes in employee benefits structures throughout the Company or Group; 5.15 agree the policy for authorising claims for expenses from directors; 5.16 work with the Company s Audit Committee and / or Committee s independent advisers in evaluating performance criteria use a consistent approach to performance measurement and explain in the remuneration report how this is achieved where appropriate, design and invoke appropriate safeguards such as withholding and recovery in relation to all performance-related pay to ensure payments reflect required achievements and targets.

8 5.19 approve share ownership and retention policies for Executive Directors and Executive Committee members; and 5.20 approve remuneration arrangements and payments only within the terms of the Remuneration Policy or as separately approved by the company s shareholders The Chief Executive Officer shall consult with the chairman of the Committee on the levels of remuneration of members of the Executive Committee, other than the Executive Directors and the Company Secretary. 6. OTHER MATTERS The Committee shall: 6.1 have access to sufficient resources in order to carry out its duties, including access to the company secretariat for assistance as required; 6.2 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; 6.3 give due consideration to laws and regulations, and any published guidelines or recommendations regarding the remuneration of directors of listed/non listed companies and formation and operation of share schemes including but not limited to the provisions of the UK Corporate Governance Code and the requirements of the UK Listing Authority s Listing, Prospectus and Disclosure and Transparency Rules as well as guidelines published by the Investment Association and the National Association of Pension Funds and any other applicable rules, as appropriate; and 6.4 arrange for periodic reviews of its own performance and, at least annually, review its 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. 7. AUTHORITY 7.1 The Committee is authorised by the Board to investigate any activity or state of affairs within its terms of reference. 7.2 The Committee is authorised to seek any information it requires from any employees or officers. In seeking any advice or assistance from any of the Company s executives, the Committee is to ensure that such role is clearly separated from the executive s role within the business. 7.3 The Committee is authorised to obtain, at the Company s expense, expert advice from the Company s auditors, professional advisers or otherwise, and to take

9 independent professional advice and to require the attendance of outsiders with relevant experience and expertise if it considers it necessary. 7.4 The Committee is authorised to select, set the terms of reference for and appoint remuneration consultants, at the Company s expense. 7.5 The Committee is authorised to commission any reports or surveys which it deems necessary to fulfil its obligations. These terms of reference were adopted in place of the previous terms of reference dated 29 th April 2015.