Remuneration Committee
Constitution
1. The board hereby resolves to establish a committee of the board to be known as the Remuneration Committee.
Membership
2. The committee shall be appointed by the board. All members of the committee shall be independent non-executive directors of the company. The committee shall consist of not less than three members. A quorum shall be two members.
3. The chairman of the committee shall be appointed by the board from amongst the independent non-executive directors.
Attendance at meetings
4. The chairman of the board, the Chief Executive and other board members shall attend if invited by the committee.
5. The company secretary shall be secretary of the committee.
Frequency of meetings
6. Meetings shall be convened as necessary by the chairman of the committee or at the request of any member of the committee.
Authority
7. The committee is authorised by the board to:
a) investigate any activity within its terms of reference;
b) seek any information that it requires from any employee of the company and all employees are directed to co-operate with any request made by the committee; and
c) obtain outside legal or independent professional advice and such advisors may attend meetings as necessary.
Responsibilities
8. The committee should:
- determine and agree with the board the framework or broad policy for the remuneration of the chief executive, the chairman of the company, other executive directors and such other members of the executive management as it is instructed by the Board to consider. The committee should have delegated responsibility for setting remuneration for all executive directors, the chairman and, to maintain and assure their independence, the company secretary. The remuneration of non-executive directors shall be a matter for the chairman and executive members of the board. No director or manager should be involved in any decisions as to their own remuneration;
- determine targets for any performance-related pay schemes operated by the company;
- determine the policy for and scope of pension arrangements for each executive director;
- 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;
- within the terms of the agreed policy, determine the total individual remuneration package of each executive director including, where appropriate, bonuses, incentive payments and share options;
- in determining such packages and arrangements, give due regard to the contents of the Combined Code as well as the UK Listing Authority’s Listing Rules and associated guidance;
- be aware of and advise on any major changes in employee benefit structures throughout the company or group;
- ensure that provisions regarding disclosure of remuneration, including pensions, as set out in the Directors’ Remuneration Report Regulations 2002 and the Code, are fulfilled;
- be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the committee;
- report the frequency of, and attendance by members at, remuneration committee meetings in the annual reports; and
- make available the committee’s terms of reference. These should set out the committee’s delegated responsibilities and be reviewed and, where necessary, updated annually.
Reporting procedures
9. The secretary shall circulate the minutes of meetings of the committee to all members of the board, and the chairman of the committee.
10. The committee members shall conduct an annual review of their work and these terms of reference and make recommendations to the board.
11. The committee’s duties and activities during the year shall be disclosed in the annual financial statements.
12. The chairman shall attend the AGM and shall answer questions, through the chairman of the board, on the audit committee’s activities and their responsibilities.
Approved by the Board of Shaftesbury PLC
on 26 November 2003
