BT 2016 Annual Report Download - page 135

Overview The Strategic Report Governance Financial statements Additional information
141
Remuneration Principles
Our remuneration principles are to maintain a competitive
remuneration package that will attract, retain and motivate a high
quality top team, avoid excessive or inappropriate risk taking and
align their interests with those of shareholders.
We believe in pay for performance against challenging targets
and stretching goals for the annual bonus (including deferred
shares) and long-term incentive shares. Our approach is to set base
salaries below the median for our comparator group. A significant
proportion of the total remuneration package is therefore variable
and linked to corporate performance.
The committee determines the remuneration policy for the
executive directors and the Chairman. The Chairman is not a
member of the committee.
The committee reviews the performance targets regularly to
ensure that they are both challenging and closely linked to the
group’s strategic priorities. Furthermore, because a large part of the
remuneration package is delivered in shares and senior executives
are required to build up a significant shareholding themselves,
they are directly exposed to the same gains or losses as all other
shareholders.
In setting directors’ remuneration, the committee takes account
of the remuneration of other companies of similar size and
complexity, using a comparator group defined with the assistance
of our independent remuneration consultants Deloitte. The
committee also takes into account the pay and employment
conditions of all our employees.
The committee continues to keep under review the relationship
of risk to remuneration. The Chair of the
Audit & Risk Committee
is a member of the Remuneration Committee .
The committee is also satisfied that the incentive structure
for senior executives does not raise environmental, social or
governance risks by inadvertently motivating irresponsible
behaviour. Part of the annual bonus depends upon an assessment
of each senior executive’s personal contribution and includes the
results of the regular employee surveys and health and safety
outcomes. Adherence to these measures is a basic criterion
expected of all executives.
The committee retains absolute discretion to reduce variable
compensation in light of risk and the group’s overall performance.
We would only use this in exceptional circumstances.
Remuneration policy
The following pages set out our Directors’ remuneration policy (the
‘Policy’) which was approved by shareholders at the AGM on 16
July 2014 in accordance with section 439A of the Companies Act
2006.
The votes cast in respect of the Policy at the AGM in 2014 were:
Votes cast in
favour %Votes cast against %
Approve Directors’
Remuneration policy 4,579,788,136 96.85% 148,973,373 3.15%
208,032,899 votes were withheld against the approval of the
Policy. A vote withheld is not counted when calculating voting
outcomes.
The Policy on pages 142 to 148 is a repeat of the Policy set
out in the Annual Report & Form 20-F 2014 (on pages 104
to 110). The page cross references within the repeated Policy
are to the respective pages in the Annual Report & Form
20-F 2014. The Policy, as approved, is also available online
at bt.com/downloadcentre
We are repeating the Policy this year because we think that it is
helpful when reading the Annual Remuneration Report.
Legacy matters
The committee may make remuneration payments and payments
for loss of oce outside of the Policy below, where the terms of
the payment were agreed before the Policy came into eect, or at
a time when the relevant individual was not an executive director
of the company (provided that, in the opinion of the committee,
the payment was not in consideration for the individual becoming
an executive director of the company). This includes the exercise of
any discretion available to the committee in connection with such
payments. Any legacy payments would be disclosed in the Annual
Remuneration Report for the relevant year.
Minor amendments
The committee may make minor amendments to the
arrangements for the directors as described in the Policy, for
regulatory, exchange control, tax or administrative purposes,
or to take account of a change in legislation.