Carphone Warehouse 2015 Annual Report Download - page 64

Dixons Carphone plc Annual Report and Accounts 2014/15
Corporate Governance
Remuneration Policy report
62
Remuneration Committee discretions
The Committee retains discretion consistent with market
practice over a number of areas relating to the operation and
administration of the bonus plans and long term incentive
share plans. These include but are not limited to:
• entitlement to participate in the plan;
• when awards or payments are to be made;
• size of award and / or payment (within the rules of the plans);
• determination of a good leaver for incentive plan purposes
and the appropriate treatment based on the rules of each
plan;
• discretion as to the measurement of performance conditions
and pro-rating in the event of a change of control;
• any adjustment to awards or performance conditions for
significant events or exceptional circumstances; and
• the application of clawback and malus provisions.
Shareholder and employee consultation
The Committee has a policy to consult with its major
shareholders when making any significant changes to the
remuneration policy of the Company. Any feedback received is
taken into consideration when determining future policy. For
example, in contemplation of the Merger in 2014 a consultation
took place with major shareholders on various amendments to
the remuneration policy. As a direct result of that consultation,
the executive directors were removed from the mid term
incentive plan. Prior to this, in 2013 an extensive consultation
exercise took place with the shareholders to seek their views
on the Carphone Warehouse Share Plan and as a result a
number of changes were made to the scheme design,
including the introduction of a cap.
The Committee also takes into consideration remuneration
guidance issued by large investor bodies in addition to the
principles of good governance relating to directors’
remuneration as set out in the Code.
Whilst employees are not formally consulted on executive
remuneration a number of them are shareholders and as such
are able to exercise their influence. We also monitor our
employee discussion boards and employee forums to ensure
employee feedback in general is considered in all our strategy
execution. The Company also conducts regular employee
surveys throughout the business.
Remuneration policy for the wider workforce
Dixons Carphone employs a large number of people across
different countries. Our reward framework is structured around
a set of common principles with adjustments made to suit the
needs of the different businesses and employee groups.
Reward packages differ for a variety of reasons including the
impact on the business, local practice, custom and legislation.
In determining salary increases to apply across the wider
workforce, the Company takes into consideration company
performance and other market metrics as necessary. When
setting the policy for executive directors the Committee takes
into consideration salary increases throughout the Company
as a whole.
Discretionary share plans are extended to both senior
management and other key members of the workforce,
as the Company feels that it is important to incentivise and
retain these employees in order for the Company to continue
to grow.
The Group’s UK and Irish employees who meet the eligibility
criteria are also invited to join the Company’s UK and Ireland
approved SAYE.
Recruitment or promotion policy
On appointment or promotion, base salary levels will be set
taking into account a range of factors including market levels,
experience, internal relativities and cost. If an individual is
appointed on a base salary below the desired market
positioning, the Committee retains the discretion to re-align
base salary over one to three years, contingent on individual
performance, which may result in an exceptional rate of
annualised increase above ordinary levels. If the Committee
intends to rely on this discretion, it will be noted in the first
remuneration report following an individual’s appointment.
Other elements of annual remuneration will be in line with the
policy set out in the Policy Table. As such, short term variable
remuneration will be capped as set out in the Policy Table.
The following exceptions will apply:
• in the event that an internal appointment is made or an
executive director joins as a result of a transfer of an
undertaking, merger, reconstruction or similar
reorganisation, the Committee retains the discretion to
continue with existing remuneration provisions, including
pension contributions and the provision of benefits;
• as deemed necessary and appropriate to secure an
appointment, the Committee retains the discretion to make
additional payments linked to relocation; and
• the Committee retains the discretion to provide an
immediate interest in Company performance by making a
long term incentive award on recruitment in accordance with
the Policy Table under its existing long term incentive
schemes or such future schemes as may be introduced by
the Company with the approval of its shareholders. The
Committee will determine the level of the award, the
performance conditions and time horizon that would apply
to such awards at the time of award, taking into account the
strategy and business circumstances of the Company.
Service contracts will be entered into on terms similar to those
for the existing executive directors, summarised in the
Recruitment table. However, the Committee may authorise the
payment of a relocation and / or repatriation allowance, as well
as other associated international mobility terms and benefits,
such as tax equalisation and tax advice.