Our Remuneration Policy
General Policy
To deliver the Group’s objective of creating real increases in shareholder value relative to the finance sector, the Group needs to attract, engage with, motivate and retain the most capable and committed people and create the right employment conditions and reward opportunities for them.
The remuneration policy for Executive Directors and other colleagues is aligned with this objective. The focus of remuneration policy for our most senior colleagues is increasingly weighted towards incentive plans that are aligned with the delivery of both shorter term operating plans and longer term increases in shareholder value. The purpose of the incentive plans is to provide a direct link between each individual’s remuneration and three components of performance, namely their own, that of the business they work in and that of the Group.
For 2008 (subject to review), as has substantially been the case since 2002:
- salary policy will be set at around market median;
- short term incentive outcomes will be based on the extent to which we deliver annual and biennial operating plans, with encouragement to take any outcomes in the form of shares;
- long term incentive outcomes will be focused on both the creation of relative additional shareholder value and the creation of real growth in earnings per share (‘EPS’), both triennially, with any outcomes in the form of shares; and
- benefits policy generally will be set around market median with flexibility for colleagues to choose benefits which best meet their needs. Service-related pension accrual from and contributions to pension arrangements ceased in April 2006 for those whose pension interest then exceeded the ‘Lifetime Allowance’ – broadly equivalent to a maximum pension of £75,000 p.a. Similar cessations took place in April 2007 and will take effect in April 2008 (and in each subsequent April) as more colleagues’ pension interests exceed the ‘Lifetime Allowance’ applicable at that time.