Structure and Content of the Remuneration Report

This Remuneration Report has been prepared in accordance with the provisions of the Companies Act 2006 and Schedule 8 of the Large and Medium-sized Companies and Group (Accounts and Reports) (Amendment) Regulations 2013 (the "Regulations"). This report meets the requirements of the UK Listing Rules and the Disclosure Guidance and Transparency Rules.

The information set out below represents auditable disclosures referred to in the Independent Auditor's Report in the Independent Auditor's Report, as specified by the UK Listing Authority and the Regulations.

Committee Composition

During the year the Committee consisted of:

Jill Caseberry (Chair)

Helen Jones

Tom Singer (appointed 16 September 2020)

Keith Williams (stepped down as a member on 22 March 2021*)

David Adams (resigned 31 December 2020)

*On 22 March 2021, Keith Williams stepped down as a formal member of the Remuneration Committee but he continues to attend as part of his role as Chair of the Board.

Seven scheduled Committee meetings were held during the year and were attended by all relevant members at the time of the meeting. After each Committee meeting the Remuneration Committee Chair reported to the Board on the key issues that had been discussed. A number of informal discussions were also held with the Committee members throughout the year when the need arose.

Activities During the Year

During the year, the Committee has:

• prepared the revised Directors' Remuneration Policy which was submitted to shareholders for approval at the 2020 AGM;
• reviewed and approved the Directors' Remuneration Report published in the FY20 Annual Report and Accounts;
• considered the approach to reward in light of COVID-19 including the impact on all employee pay and wider remuneration;
• discussed and approved incentive outcomes for FY20;
• approved grants under the Performance Share Plan ("PSP"), the Restricted Management Share Plan ("MSP") (to senior managers below the Board) and the Sharesave Scheme ("SAYE");
• carefully considered expected pay-outs for FY21 in the context of the impact of COVID-19 on the business, the experience of shareholders and wider stakeholders, in particular employees;
• considered the approach to implementing remuneration policy for FY22, including setting Executive Director salaries from 1 October 2020 and reviewing performance measures, and considering the approach to performance measures and setting for FY22 annual bonus and performance share plans;
• reviewed the mechanics and assets of the Employee Benefit Trust and hedging arrangements;
• discussed and approved remuneration arrangements for the Executive management team below the Board;
• reviewed the Committee's Terms of Reference;
• reviewed remuneration arrangements for the wider workforce and took these into account when considering Executive pay;
• reviewed developments in shareholder guidance particularly within the context of COVID-19; and
• reviewed and approved the appointment of remuneration advisors.

Advisors and Other Attendees

During the year, the Committee has been supported by Michelle Burton, Interim Group People Director, together with Tim O'Gorman, Company Secretary (who acts as secretary to the Committee). The Chief Executive Officer and Chief Financial Officer also attend Committee meetings on occasion, at the request of the Committee; they are never present when their own remuneration is discussed. In carrying out its responsibilities, the Committee is authorised to obtain the advice of external independent remuneration consultants and is solely responsible for their appointment, retention and termination. During the year, the Committee has taken advice from Deloitte LLP ("Deloitte"), which advised on remuneration reporting, share option evaluations and other remuneration matters. Deloitte also provided unrelated advice on debt advisory work, tax services and legal support during the year. Total fees paid to Deloitte in respect of remuneration advice were £39,025 charged on a time and materials basis.

Deloitte is a founding member of the Remuneration Consultants Group and adheres to the Remuneration Consultants Group Code of Conduct when providing services. The Committee considers Deloitte's advice independent and impartial and, is also satisfied that the Deloitte engagement team does not have connections with the Company or its Directors that might impair their independence. The Committee considered the potential for conflicts of interest and judged that there were appropriate safeguards against such conflicts.

Willis Towers Watson also provided the Committee with Executive salary market data. Willis Towers Watson is also a signatory of the Remuneration Consultants Group Code of Conduct. Fees paid to Willis Towers Watson for this advice were £4,200 charged on a time and materials basis. Willis Towers Watson also provide insurance broking services and employee benefits services to the Group.

Shareholder Dialogue

The voting outcome from the 2020 AGM reflected very strong individual and institutional shareholders' support for the revised Directors' Remuneration Policy ("Policy"). We consulted extensively with shareholders prior to introducing the revised Policy. Furthermore, the voting outcome from the 2020 AGM showed strong support for our FY20 Directors' Remuneration Report.

The following table sets out the votes cast at the 2020 AGM in respect of the Directors' Remuneration Policy, and the FY20 Directors' Remuneration Report.

* 28,958 votes (0.02% of votes) were withheld in relation to this resolution.

†40,378 votes (0.03% of votes) were withheld in relation to this resolution.

We continue to be mindful of the views of our shareholders and other stakeholders and encourage discussion with shareholders on any issue related to Executive remuneration.

In the event of a substantial vote against a resolution in relation to Directors' remuneration, we would seek to understand the reasons for any such vote to determine appropriate actions and detail any such actions in response to it in the Directors' Remuneration Report.

How the Remuneration Policy was Implemented in FY21 – Executive Directors

Single remuneration figure (Audited)

1. In December 2020, Graham Stapleton and Loraine Woodhouse each received a working from home payment, in line with all Support Centre Colleagues.
2. The share price used to value the awards for the purpose of the single figure was £3.049 compared to a share price of £3.197 on the date of the award. Therefore, no portion of the value disclosed is attributable to share price appreciation. No discretion was exercised.
3. The share price used to value the awards for the purpose of the single figure was £3.049 compared to a share price of £3.079 on the date of the award. Therefore, no portion of the value disclosed is attributable to share price appreciation. No discretion was exercised.

FY21 Annual Bonus

The annual bonuses for FY21 for the Executive Directors were based as follows:

The targets and performance against these are set out below:

1. Excludes the Universal acquisition price.2. Cost reduction is expressed as cost as a percentage of revenue.3. Operating cash flow here is defined as EBITDA plus the movement in average working capital in FY21 compared to the prior year.4. In order for the NPS target to be met, both the Retail and Autocentres scores must be achieved. NPS achievement is based on P12 exit numbers.

In the year, although the Company continued to experience a disrupted trading environment, overall performance was exceptional far exceeding our expectations at the start of the year. Underlying profit before tax was considerably higher than previous years at £99.5m (post-IFRS 16 but pre non-underlying) and the Company's share price increased by around 260% during the year (based on a one month average to the start and the end of the financial year). Furthermore, we were pleased to increase our market share in key areas of the business whilst maintaining a high level in NPS scores and colleague engagement.

We originally received support from government furlough schemes but on 1 March 2021 we announced our decision to repay in full £10.5m of furlough income received. We were also pleased to deliver nearly £490m of shareholder value, delivering a shareholder return on investment of c.250% in the twelve months to 31 March 2021 whilst outperforming our peer group (which delivered 49% return) and the FTSE SmallCap Index (51% return).

Our strong performance through FY21 has also allowed us to share our successes across our colleagues, through our annual bonus schemes and Frontline Colleague Support Scheme.

Throughout the year, the safety of our colleagues and customers has remained our number one priority and whilst we were subject to greater costs and challenges in keeping our stores safe, we were pleased to maintain high NPS and colleague engagement scores. We were privileged to have been able to offer free checks and discounts to 480,000 NHS workers, teachers and Armed Forces staff to help keep their vehicles safe and roadworthy.

The Committee carefully considered bonus outcomes in the context of the business, the performance of the Directors in the year and the remuneration arrangements for the wider workforce population and the experience of shareholders and other stakeholders to assess whether the outcome was aligned.

Given the key role that the CEO and CFO played in implementing the strategy and managing the operation of the business amid such challenging circumstances to produce these results the Committee felt that the bonus paying out at 92.5% of maximum was appropriate.

Performance outcomes for 2018 PSP awards

* Straight-line vesting between threshold and maximum

As with the annual bonus, the Committee retains the discretion to adjust the PSP vesting outcome if it is not considered to be reflective of underlying financial or non-financial performance of the business or the performance of the individual or where the outcome is not considered appropriate in the context of the experience of shareholders or other stakeholders.

The Committee considered the outcome in the context of the business and determined that no changes to the formulaic outcomes were required.

Benefits

Benefits include payments made in relation to a car plus fuel or a cash allowance, private health insurance, life assurance and a driver.

Pension

Pension payments represent contributions made either to defined contribution pension schemes or as a cash allowance. The CEO and CFO both received a contribution of 15% of base salary. Pension contributions / allowances for the Executive Directors in role will be aligned with the maximum employer pension contribution available to the majority of the workforce from 1 April 2023.

Share Awards Granted During the Year (Audited)
Performance Share Plan

During the period, the following awards were granted to the Executive Directors under the Performance Share Plan ("PSP") as follows:

1. These awards were based on 200% of salary. For 2019 awards, given the share price at the time the Remuneration Committee determined that it was appropriate to reduce the PSP awards granted to 175% of salary. After assessing share price performance prior to award, it was deemed appropriate to make 2020 awards at the normal level of 200% of salary.
2. Based on the average mid-market price on three preceding days of the awards of £2.425 on 16 October 2020.

Performance Conditions

The performance conditions and targets for PSP awards granted during FY21 are as follows:

In addition to achieving these targets, the vesting of awards will be subject to meeting a zero net debt underpin at FY23 year end. The award shares that vest will become exercisable in 2023. The shares that vest will be subject to a two-year holding period.

Outstanding Share Awards (Audited)
Performance Share Plan ("PSP")

The following summarises outstanding awards under the PSP:

1. FY18 awards were subject 25% to Group revenue growth targets (25% vesting for 3.5% p.a. growth, 100% vesting for 7% p.a. growth) and 75% to underlying EPS growth (25% vesting for 1.5% p.a. growth, 100% vesting for 6% p.a. growth). In addition, any vesting of the PSP was subject to an underpin whereby the net debt to EBITDA ratio remained below 1.5 times on average for the three years of the plan. The performance targets for this award were not met based on performance for FY20 and the award lapsed in April 2020.
2. FY19 awards are subject 50% to underlying EPS growth (25% vesting for 1.5% p.a. growth, 100% vesting for 6.0% p.a. growth), 25% to Group revenue growth targets (25% vesting for 3.5% p.a. growth, 100% vesting for 8% p.a. growth), and 25% subject to Free Cash Flow (25% vesting for £125m, 100% vesting for £165m). In addition, any vesting of the PSP will be subject to an underpin whereby the net debt to EBITDA ratio remains below 1.5 times on average for the three years of the plan. The performance targets for this award were met in part based on performance for FY21 and therefore 84.9% of this award will vest.
3. FY20 awards are subject 50% to underlying EPS growth (25% vesting for 5% p.a. growth, 100% vesting for 10.0% p.a. growth), 25% to Group revenue growth targets (25% vesting for 3.5% p.a. growth, 100% vesting for 6% p.a. growth), and 25% subject to Free Cash Flow (25% vesting for £125m, 100% vesting for £165m). In addition, any vesting of the PSP will be subject to an underpin whereby the net debt to EBITDA ratio remains below 1.5 times on average for the three years of the plan.
4. FY21 awards are subject 40% to Relative TSR vs the FTSE All Share General Retailers Index (25% vesting achieving below market median, 100% vesting achieving upper quartile), 30% to Free Cash Flow (25% vesting for £117m, 100% vesting for £128m), 20% to underlying EPS growth (25% vesting for 2.5% p.a. growth, 100% vesting for 8% p.a. growth), and 10% to Group services related sales (25% vesting for 30% p.a. growth, 100% vesting for 35% p.a. growth). In addition, any vesting of the PSP will be subject to meeting a zero net debt underpin at FY23 close.
5. The grant price is calculated by taking the mid-market average across the three preceding days prior to the grant date.
6. No interim and final dividends were paid during the period.

Deferred Bonus Plan ("DPB")

1. The grant price is calculated by using the mid-market quotation on the date of grant.
2. No interim and final dividends were paid during the period.

Initial Share Award

To compensate Graham Stapleton for remuneration forfeited when leaving his previous employer, he received an award of 185,872 shares. These shares were released to Graham on 15 January 2021 following the end of the three-year retention period. Details of Graham's buy-out awards were included in the 2018 Remuneration Report and the value of this award was included in the 2018 single figure in-line with the regulations.

CEO Pay Compared to Performance

The following graph shows the TSR performance of the Company since April 2010, against the FTSE All Share General Retailers Index (which was chosen because it represents a broad equity market index of which the Company is a constituent).

The following table summarises the CEO single figure for the past ten years and outlines the proportion of annual bonus paid as a percentage of the maximum opportunity and the proportion of PSP awards vesting as a percentage of the maximum opportunity. The annual bonus is shown based on the year to which performance related and the PSP is shown for the last year of the performance period.

1. Graham Stapleton was appointed in January 2018. An incorrect benefits figure was reported for FY19 in error, this has been corrected and reflected in the total for FY19.
2. Jonny Mason was appointed as interim Chief Executive Officer for the period from September 2017 to the date of Graham Stapleton joining in January 2018, and the figures represent pro-rated amounts of his bonus and overall remuneration for FY18.
3. Jill McDonald was appointed in May 2015 and resigned as CEO in September 2017.
4. Matt Davies was appointed in October 2012 and resigned as CEO in April 2015.
5. David Wild resigned as CEO in July 2012.

Shareholding Guidelines

The Committee believes that it is important that Executive Directors' interests are aligned with those of the shareholders. Executive Directors are encouraged to acquire and retain shares with a value equal to 200% of their annual base salary. Executive Directors are expected to retain 75% of any post-tax shares that vest under any share incentive plans until this shareholding guideline is met.

These figures include those of their spouse or civil partner and infant children, or stepchildren, as required by Section 822 of the Companies Act 2006. There was no change in these beneficial interests between 2 April 2021 and 16 June 2021.

In light of the Code and evolving market practice, in FY20, the Committee introduced a post-employment shareholding guideline to support the alignment of interests between Executive Directors and shareholders following an Executive's departure from the Board. Under this guideline, Executive Directors are expected to retain their shareholding guideline (200% of salary) for a period of two years post stepping down as an Executive Director. This post-employment shareholding guideline applies to any performance incentive shares that vest from 1 April 2020.

Executive Directors' Appointments

Outside Appointments

Halfords recognises that its Executive Directors may be invited to become Non-Executive Directors of other companies. Such Non-Executive duties can broaden experience and knowledge which can benefit Halfords. Subject to approval by the Board, Executive Directors are allowed to accept Non-Executive appointments and retain the fees received, provided that these appointments are not likely to lead to conflicts of interest. During the year, Graham Stapleton was appointed as a Non-Executive Director of The Magic Bean Co. Limited on 21 January 2021 and, Loraine Woodhouse was appointed as a Non-Executive Director of The British Land Company plc with effect from 1 March 2021. Both Graham and Loraine retained their earnings for these roles.

Loss of Office Payments (Audited)

No loss of office payment was made to a Director during the year.

Payments to Former Directors (Audited)

No payments were made to former Directors during the year.

How the Remuneration Policy was Implemented in FY21 – Non-Executive Directors
Non-Executive Director single figure comparison (Audited)

1. Includes hotel and travel costs incurred when attending Halfords' meetings and Board visits.
2. The Chair and Non-Executive Directors are not entitled to participate in any of the Group's incentive plans or pension plans so all pay is fixed.
3. Keith Williams did not claim any taxable benefits during the year.
4. Helen Jones was appointed Senior Independent Director with effect from 15 September 2020.
5. Due to a payroll error, a portion of fees which related to FY19 were actually paid in FY20. These amounts were: £2,000 for Helen Jones; £164 for Jill Caseberry; and £2,000 for David Adams.
6. Jill Caseberry did not claim any taxable benefits during the year.
7. Tom Singer was appointed as a Non-Executive Director on 16 September 2020, and as Audit Committee Chair on 1 January 2021. Tom did not claim any taxable benefits during the year.
8. David Adams stepped down as Senior Independent Director on 15 September 2020, and as Audit Committee Chair and Non-Executive Director on 31 December 2020.

Non-Executive Director Shareholding

These figures include those of their spouses, civil partners and infant children, or stepchildren, as required by Section 822 of the Companies Act 2006. There was no change in these beneficial interests between 2 April 2021 and 16 June 2021.

Non-Executive Directors do not have a shareholding guideline but they are encouraged to buy shares in the Company.

David Adams stepped down from the Board on 31 December 2020 and his shareholdings are shown at this date.

Non-Executive Directors' Appointments

None of the Non-Executive Directors has an employment contract with the Company. However, each had entered into a letter of appointment with the Company confirming their appointment for a period of three years, unless terminated by either party giving the other not less than three months' notice or by the Company on payment of fees in lieu of notice.

Their appointments are subject to the provisions of the Companies Act 2006 and the Company's Articles of Association, and in particular, the need for re-election. Continuation of an individual Non-Executive Director's appointment is also contingent on that Non-Executive Director's satisfactory performance, which is evaluated annually. The Non-Executive Directors' letters of appointment are available for inspection by shareholders at the Company's registered office.

How the Remuneration Policy will be Implemented for FY22 – Executive Directors Salary

Salaries for Executive Directors were increased by 1.8 % with effect from 1 October 2020 in line with the increase received across the wider workforce. Current salaries for the Executive Directors are as follows:

Salaries will next be reviewed with effect from 1 October 2021.

Pension

Executive Directors will continue to receive a pension allowance of 15% of base salary. The Committee carefully considered the level of pension allowance for Executive Directors and no changes were made to this allowance for 2020/21 and 2021/22. While the Committee acknowledges that this level of pension is above the rate that is available to the wider workforce in the UK, the Committee did not consider that it was appropriate to lower the pension allowance for Executive Directors at this stage, given their existing contractual entitlements and limited tenure in role. However, mindful of shareholder guidance that pensions for Executives should be aligned with the pension provision available for the wider workforce, the Executive Directors have, however, agreed to reduce their pension to be in line with the rate available for the wider workforce from 1 April 2023.

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 Bonus

The normal maximum annual bonus for the CEO and CFO is 150% of base salary with 2/3 paid in cash and 1/3 paid in Halfords' shares deferred for three years.

For FY21, given the uncertainty caused by the pandemic we changed measures to ensure that it focused management on the key financial and strategic KPIs that were critical for the business over the following 12 months. Therefore, the Committee broadened the range of financial measures to include the critical priorities of cost reduction as well as debt and cash management.

As we progress from the initial impact of the pandemic, we feel we are now able to revert to more normalised measures. We will increase the weighting of PBT from 15% to 50%, increase the cash flow metric from 7.5% to 15% and include a new Group revenue metric. Both net debt and cost reduction have now been removed.

Finally, in order to incorporate a new ESG metric, we have reduced each strategic measure to 5% and also replaced Digital Sales with Group Services Related Sales to assist in implementing the new strategic priorities of the business.

Targets have not been disclosed at the current time as they are considered to be commercially sensitive. The Committee intends to disclose targets in next year's Directors' Remuneration Report.

Performance Share Plan ("PSP")

The normal PSP award for Executive Directors is 200% of base salary. The Committee is mindful of shareholder guidance that award levels should be adjusted where the share price has fallen significantly compared to prior years. The Committee will take this into account when determining award levels in September.

FY22 PSP awards will be based on the following performance measures:

• 30% based on Relative TSR versus the FTSE All Share General Retailers Index;
• 50% based on EPS growth; and
• 20% based on Group services-related sales. Vesting will also be subject to the Company maintaining an appropriate margin on services revenue.

Our normal practice is to grant awards in September.

In the event that there is a material acquisition or disposal during the performance period then the Committee would look to review the targets to ensure they remained suitably stretching.

In light of the impact of the COVID-19 pandemic on the business, and the wider economy the Committee re-assessed the performance measures for 2020/21 and sought to ensure that pay reflected the current circumstances of the business and the experience of our shareholders.

As a result, for FY21 PSP awards an increase was applied to the weighting on relative TSR in light of the uncertainty around financial target setting and to ensure that outcomes were aligned with the shareholders' experience. We also increased the weighting on Free Cash Flow to ensure focus on the management of our cash position during this critical period.

Although uncertainties in the market outlook remain, we have reviewed the measures and weightings and now feel we can revert to measures and weightings that are best positioned to support our ongoing strategy as we move away from the initial impact of the pandemic. We have therefore reduced TSR to 30% (from 40%) and increased EPS growth to 50%. Group services-related sales will increase to a 20% weighting, whilst Free Cash Flow has been removed.

The PSP will be weighted towards EPS growth which the Committee considers incentivises management to both grow revenue and manage cost in a balanced way.

Additionally, given our continued focus on increasing services-related revenue the Committee considered that it was appropriate to increase the weighting of this metric whilst relative total shareholder return is included to ensure that PSP outcomes are aligned with the value we have returned to our shareholders relative to our key retail peers.

Free Cash Flow has been removed as a performance measure as the Committee considered that this was no longer an appropriate measure in the context of our enhanced investment plans.

These measures are in line with the current priorities of the business. The Committee feels they will serve to incentivise and reward management for delivering against our intention to accelerate the growth of the motoring services business, to generate higher and more sustainable financial returns for shareholders and to best reflect the wider stakeholder experience.

In determining whether any annual bonuses are payable or performance share plan awards vest, the Committee retains the discretionary authority to adjust incentive pay-outs (both upwards and downwards) if the original outcome is not considered to reflect the underlying performance of the Company or the participant over the period, the outcome is not considered appropriate in the context of circumstances that were unexpected or unforeseen at the time the targets were set, or where the outcome is not considered appropriate in the context of the experience of shareholders or other stakeholders over the performance period.

These measures are in line with the current priorities of the business. The Committee feels they will serve to incentivise and reward management for delivering against our intention to accelerate the growth of the motoring services business, to generate higher and more sustainable financial returns for shareholders and to best reflect the wider stakeholder experience.

In determining whether any annual bonuses are payable or performance share plan awards vest, the Committee retains the discretionary authority to adjust incentive pay-outs (both upwards and downwards) if the original outcome is not considered to reflect the underlying performance of the Company or the participant over the period, the outcome is not considered appropriate in the context of circumstances that were unexpected or unforeseen at the time the targets were set, or where the outcome is not considered appropriate in the context of the experience of shareholders or other stakeholders over the performance period.

How the Remuneration Policy will be Implemented for FY22 – Non-Executive Directors Fees

The fees of Non-Executive Directors are normally reviewed every two years. Any changes to these fees will be approved by the Board as a whole following a recommendation from the Chief Executive Officer.

The fees of the Non-Executive Directors were reviewed in March 2020 and at the time it was agreed that a fee increase would not be appropriate due to the COVID-19 pandemic, instead the next fee review was set for March 2021. In March 2021, the Remuneration Committee decided that the NED fee review would be considered later in the year, and if any changes are agreed, these will be effective from October 2021, in line with the rest of the business.

Current fees for Non-Executive Directors are as follows:

Change in Remuneration of Directors Compared to Group Employees

The table below sets out the increase in total remuneration of the Directors and that of all colleagues.

1. No bonus payable for FY20.
2. Based on all colleagues who were paid a bonus during FY20 and FY21. Includes the Frontline Fund bonus paid to all eligible colleagues in August 2020.
3. No change to the benefits available for both Directors and colleagues.
4. Helen Jones was appointed as Senior Independent Director on 15 September 2020.
5. Tom Singer was appointed as a Non-Executive Director on 16 September 2020, and as Audit Committee Chair on 1 January 2021.
6. David Adams stepped down as Senior Independent Director on 15 September 2020, and as Audit Committee Chair and Non-Executive Director on 31 December 2020.
7. Not eligible for a bonus.

CEO Pay Ratio

Halfords being a UK listed Company with more than 250 employees means that the Company is required to disclose annually the ratio of its CEO's pay to the median, lower quartile and upper quartile pay of their UK employees. Details of this can be found in the table below.

In addition to the ratio of the CEO's pay to the 25th, median and 75th percentile of UK employees, companies are also required to disclose:

• an explanation of the methodology used, including an explanation of the reason where any components of total remuneration have been omitted and a brief explanation of any assumptions used to determine full-time equivalent remuneration;
• the total remuneration and salary value (the £ value) for the 25th, median and 75th percentile employees used in the pay ratio calculation;
• an explanation for changes to the ratio year on year (not applicable for first year disclosures); and
• whether the Company considers the median pay ratio consistent with the Company's wider policies on employee pay, reward and progression.

Of the three options set out in the new legislation for calculating the CEO pay ratio, we have used Option B using Gender Pay Gap data. This option was chosen as it represents the most efficient method to determine the respective pay ratios. The colleagues at the three quartiles were identified and their respective single figure values calculated as of 5 April 2020. To ensure the identified colleagues were representative, the total remuneration for a group of individuals above and below the identified colleague at each quartile was also reviewed.

The Board has confirmed that the ratio is consistent with the Company's wider policies on employee pay, reward and progression.

In order to determine the full-time equivalent salary component for the representative colleagues, the hourly rate was multiplied by full-time hours to calculate the full-time equivalent salary. No component of total remuneration was omitted. The base salary and total remuneration for each representative colleague are outlined below.

There is an increase in the CEO pay ratio in 2021 compared to 2020. As is appropriate the remuneration arrangements for the Executive Directors are more closely linked to performance. Given the very strong performance for FY21, remuneration for the CEO has risen more than for the wider workforce.

Workforce Engagement in Remuneration

As referenced on ESG Progress in FY21, Halfords has long established practices of engaging with colleagues across all areas of the business, including holding regular listening groups, appointing and meeting with local colleague engagement ("people") champions, and conducting regular colleague surveys.

During the course of the year People Champions were invited to input to a number of broader business initiatives including ESG and reward practice, so gaining an understanding of corporate governance and Executive remuneration. The content of the remuneration session specifically talked to how Executive pay aligns with wider company pay policy, including benefits provision, and invited feedback from People Champions in respect of the reward framework. Detailed remuneration briefing sessions were also held with senior leaders on launch of the FY21 bonus and PSP plans.

Gender Pay Gap Report

Details of the Group's Gender Pay Gap Report for 5 April 2020 are available at www.halfordscompany.com/corporate-responsibility/colleagues/gender-pay-gap/.

Relative Importance of Pay

The Committee is also aware of shareholders' views on remuneration and its relationship to other cash disbursements. The following table shows the relationship between the Company's financial performance, payments made to shareholders, payments made to tax authorities and expenditure on payroll.

1. Based on the single figure calculation, not all of which is included within wages and salary costs.