Directors' Remuneration Policy Summary Report

Our Directors' Remuneration Policy was approved by shareholders at the 2020 AGM. The full Policy is available on the Company's website, but as context for the rest of this report, the main elements of the Policy, as well as how the Policy was implemented during the year and how it will be implemented for FY22, are summarised below:

ElementsObjectiveKey featuresImplementation in FY21Implementation in FY22
Base salaryTo attract and retain management of a high calibre.Reviewed annually with increases effective from 1 October. Maximum salary increases generally in line with wider employees.Graham Stapleton: £565,530
Loraine Woodhouse: £362,720
Increased by 1.8% in line with the increases awarded across the wider workforce with effect from 1 October 2020.
Salaries will next be reviewed with effect from 1 October 2021 and it is expected that any increase will be in line with the increase received for the wider workforce.
BenefitsProvide market competitive benefits consistent with the role.Set at an appropriate level taking into account the individual's circumstances, market practice and other employees in the Group.Executive Directors received benefits in relation to a car plus fuel or a cash allowance, private health insurance, life assurance.No changes proposed.
PensionTo provide individuals with retirement arrangements.Directors eligible for defined employer contribution, payments into a personal fund and/or a cash allowance in lieu of pension.
Total contribution capped at 15% of salary for each of the Executive Directors in role on 31 March 2019.
Contributions for Executive Directors in role will be aligned with the maximum employer pension contribution available to the majority of the workforce from 1 April 2023.
Executive Directors received cash allowances of 15% of salary.Current Executive Directors: 15% of salary.
For any new Executive Director appointed to the Board, the pension opportunity will be in line with the policy for the majority of the workforce.
Annual bonusIncentivise the achievement of annual financial targets and key strategic objectives.Maximum opportunity of 150% of salary with one-year performance period.
One-third of any award is deferred into shares for three years. Malus and clawback provisions apply.
Based on 77.5% financial measures and 22.5% delivery of strategic measures (full details in the Remuneration Committee Report).
Both financial and non-financial performance was strong in the year and the bonus paid out at 92.5%.
Maximum: 150% of salary.
For 2021/22 measures will be 80% financial:
  • Underlying Group PBT (50%),
  • Group revenue (15%)
  • Operating cash flow (15%)

20% non-financial measures
  • Group NPS (5%)
  • Group services-related sales (£m) (5%)
  • Group Colleague Engagement (5%)
  • ESG metric (5%)
Performance Share PlanAlign Executive Directors' interests with those of our shareholders by incentivising them to deliver the Company strategy and to create a sustainable business and maximise returns to shareholders.Maximum opportunity of 200% of salary.
Three-year performance period.
Two-year holding period after vesting.
Malus and clawback provisions apply.
Graham Stapleton and Loraine Woodhouse were granted awards of 200% of salary in the year.
Awards granted in October 2020 were based on:
  • EPS growth 20%
  • Group service-related revenue 10%
  • Free Cash Flow 30%
  • Relative TSR vs the FTSE All Share General Retailers Index 40%

Targets are disclosed in the Remuneration Committee Report.
Executive Directors will have a maximum opportunity of 200% of salary for FY22.
FY22 awards will be based on:
  • EPS growth 50%
  • Group services-related sales 20%
  • Relative TSR vs the FTSE All Share General Retailers Index 30%
Shareholding guidelinesAlign individuals with shareholders.Executive Directors are expected to build and retain a shareholding with a value equal to at least 200% of their annual base salary.
Expectation that 75% of any post-tax shares that vest from incentive plans are retained until the guideline is met.
Executive Directors will normally be expected to maintain a minimum shareholding of 200% of salary (or actual shareholding if lower) for two years following stepping down as an Executive Director.
Executive Directors were subject to a 200% of salary shareholding guideline.No change.