Tesco 2011 Annual Report Download - page 79

REMUNERATION COMMITTEE
Membership of the
Remuneration Committee
Stuart Chambers (Committee Chairman) (joined the Committee on 3 July 2010)
Patrick Cescau
Karen Cook
Ken Hanna
Jacqueline Tammenoms Bakker (joined the Committee on 3 July 2010)
• The Directors’ biographies can be found on pages 60 and 61 of this Annual Report.
• Members’ attendance at Committee meetings is listed in the Corporate Governance section on page 68 of this
Annual Report.
• No member of the Committee has any personal financial interest in the matters being decided, other than
as a shareholder, nor any day-to-day involvement in running the business of Tesco.
• Charles Allen, Rodney Chase and Harald Einsmann were also members of the Committee until their retirement
from the Board at the 2010 AGM on 2 July. Mr Allen chaired the Committee until this date.
Role of the Remuneration
Committee and activities
during the year
The Committee’s responsibilities are to:
• determine and recommend to the Board the remuneration policy for the Chairman and Executive Directors;
• ensure the level and structure of remuneration is designed to attract, retain and motivate the Executive
Directors needed to run the Company;
• review and approve awards made under our share schemes;
• agree performance frameworks and targets for annual and long-term awards, and review performance against
these;
• monitor the level and structure of remuneration for senior management ensuring that it is aligned with
shareholders’ interests;
• ensure the remuneration relationship between the Executive Directors and the wider workforce is appropriate;
• review compliance with director shareholding guidelines;
• approve the annual Directors’ Remuneration Report for presentation to shareholders;
• consider developments in best practice and updated guidelines on executive compensation from shareholder
advisory bodies; and
• review the Chairman’s pay and benefits.
In addition to carrying out these responsibilities, during the year the Committee undertook a detailed review
of remuneration arrangements and proposed changes to both policy and structures. The Committee also set
a reward framework for our new CEO.
As it does every year, the Committee undertook a review of its own performance and agreed steps to enhance
its effectiveness.
As required by the FSA, Tesco Bank has a separate independent remuneration committee. The Group
Remuneration Committee is consulted on, and makes recommendations in relation to the remuneration
arrangements for Tesco Bank employees, with the aim of encouraging consistency with Group remuneration
policy, but it does not make decisions in relation to, or direct, how remuneration is managed within Tesco Bank.
Number of meetings • Normally four meetings per year
• In the year ending 26 February 2011 the Committee met formally five times
External advisors Deloitte LLP
Deloitte also provided advisory services in respect of corporate tax planning, share schemes, international
taxation, corporate finance and treasury to the Group during the year.
Internal advisors • Jonathan Lloyd, the Company Secretary, is Secretary to the Committee.
• David Reid, Non-executive Chairman, Philip Clarke, Chief Executive of the Group and Laurie McIlwee, Group
CFO, all attend meetings at the invitation of the Committee. They are not present when their own remuneration
is being discussed.
• The Committee is supported by the Group Personnel and Finance functions.
Terms of reference Available from the Company Secretary upon request or can be viewed at www.tescoplc.com/boardprocess/
Governance Oversight Committee (GOC)
Membership of the
Committee
Senior Independent Director – Patrick Cescau (Committee Chairman)
Chairman of the Audit Committee – Ken Hydon
Chairman of the Remuneration Committee – Stuart Chambers
The Chairman attends meetings and the Company Secretary serves as its secretary.
Role of the Governance
Oversight Committee
The Committee’s purpose is to review and report to the Remuneration Committee at the end of each financial
year on the allocation of Group capital.
The Remuneration Committee takes account of the GOC’s report together with the view of the Audit Committee
to ensure that financial performance against targets is indicative of strong and robust business performance.
If appropriate, vesting under long-term incentive plans may be adjusted by the Remuneration Committee.
Any such adjustments to vesting for Executive Directors will be reported to shareholders in the Remuneration
Report at the relevant time.
TESCO PLC Annual Report and Financial Statements 2011 — 75
Overview Business review Governance Financial statements