Carphone Warehouse 2014 Annual Report Download - page 45

Remuneration report
CHAIRMAN’S STATEMENT
Over the past 12 months Carphone Warehouse has continued
todeliver solid performance in its core business whilst outlining
acompelling growth strategy for the future. It has also seen the
business re-enter the FTSE 250 as a company with a premium
listing on the London Stock Exchange and managed the smooth
transition of senior level Board changes with Roger Taylor moving
from Chief Executive Officer to Deputy Chairman and Andrew Harrison
joining the Board as Chief Executive Officer.
We have used this opportunity to review our approach to remuneration
to ensure it is aligned to our strategic direction, appropriate for a
FTSE company and focused on driving superior shareholder returns.
As a result we have made a number of changes this year including
the introduction of new long-term incentive plans that align the
interests of our senior managers with our shareholders, providing
the opportunity for them to earn significant value but only if superior
returns are delivered to our shareholders. We were pleased to see
this new plan receive 96% support from our shareholders at the
general meeting on 24 June 2013.
We have also taken the opportunity to bring our executive directors’
salary and notice periods in line with the market and normal
practice for a FTSE 250 business.
No changes are proposed to the basic salaries of the executive
directors as part of the annual pay review process. Bonus payments
will be at slightly above target levels. No long-term incentives
vested during the year.
In relation to our other remuneration policies we have maintained
our approach of providing a strong link between our overall reward
packages and performance and the delivery of our strategic priorities,
which we have stated as continuing to grow our core business,
creating partnerships across Mainland Europe and developing
Connected World Services.
We are also acutely aware that our success is largely down to the
dedication and hard work of all our employees and that it is vital that
they continue to feel fairly and appropriately rewarded and that they
are able to share in the success of the business. We aretherefore
very pleased this year to have been able to reintroduce a sharesave
plan for allUK employees, which has enjoyed a good take-up rate.
If the Merger is completed, the Group’s remuneration policy
willbechanged accordingly. In particular this will reflect changes
inremuneration forexecutive directors and changes to their
participation in our long-term incentive plans with the intention to
have consistent alignment between existing executives and those
who join the Group as part of the Merger. The Prospectus and
Circular also set out details in respect of the existing incentive
schemes of Dixons Retail plc and how these will be affected by the
Merger. The new policy will be set out in next year’s annual report
and put to shareholders for approval at next year’s annual general
meeting. The current remuneration report and policy should
therefore be considered by shareholders in this context.
John Gildersleeve Chairman, Remuneration Committee
REMUNERATION POLICY REPORT
The Remuneration Policy set out in this report will be put to
shareholders for approval in a binding vote at the annual general
meeting on 23 July 2014 and the policy will be effective from that
date. Shareholders will be asked to approve the policy for a period
of three years starting from the effective date of the policy.
REMUNERATION STRATEGY
Put simply, our aim is to generate superior returns for our
shareholders and the key to achieving this is our people.
Our remuneration strategy is underpinned by remuneration
packages that are designed to motivate high-performing people
todeliver our strategy. The remuneration packages:
+are transparent and demonstrably aligned with the interests
ofshareholders;
+are weighted to variable pay that incentivises outperformance
over the short and long term;
+are structured to ensure that superior rewards are only paid
forexceptional performance against challenging targets;
+are consistently applied across the Group to promote alignment
and teamwork;
+recognise the importance of delivering across a balanced set
ofmetrics to ensure the right behaviours are adopted and the
long-term health of the business is protected; and
+encourage management to have a significant personal stake
inthe long-term success of the business.
Carphone Warehouse Group plc
Annual Report 2014 43
CORPORATE GOVERNANCE