Carphone Warehouse 2015 Annual Report Download - page 68

Dixons Carphone plc Annual Report and Accounts 2014/15
Corporate Governance
Annual Remuneration report
66
Only members of the Committee are entitled to attend
Committee meetings but the Group Chief Executive and
Group Finance Director (or other senior management)
may attend meetings by invitation and in an advisory
capacity only. Meetings are also regularly attended by the
Company Secretary (who acts as Committee secretary),
Deputy Company Secretary and the Group Human
Resources Director.
No director participates in discussions about their own
remuneration.
Responsibilities
Responsibility for the establishment of an overall remuneration
policy for the Group lies with the Board. The Remuneration
Committee has the following principal duties:
• making recommendations to the Board on the Company’s
framework of executive remuneration;
• determining the fees of the Chairman and Deputy Chairman;
• considering and making recommendations to the Board on
the remuneration of the executive directors and senior
management relative to performance and market data;
• approving contracts of employment which exceed defined
thresholds of total remuneration or have unusual terms or
termination periods;
• considering and agreeing changes to remuneration policy
or major changes to employee benefit structures; and
• approving and operating employee share based incentive
schemes and associated performance conditions
and targets.
Advice
The Committee retained Towers Watson throughout 2014/15
as independent advisors. Towers Watson is engaged to
provide advice to the Committee and to work with the directors
on matters relating to the Group’s executive remuneration and
its long term incentives. Towers Watson is a member of the
Remuneration Consultants Group and operates under its code
of conduct in relation to the provision of executive
remuneration advice in the UK. Towers Watson has confirmed
that it adhered to the Code throughout 2014/15 for all
remuneration services provided to the Group. Towers Watson
received fees of £82,000 (2013/14: £84,000) in relation to the
provision of those services. Towers Watson also provided
actuarial services on behalf of the defined benefit pension
scheme; however, the Committee has satisfied itself that
Towers Watson’s advice was objective and independent.
The Committee may also take external legal advice, where
required, to assist it in carrying out its duties.
External directorships
The policy relating to external directorships is outlined in the
Remuneration Policy report. For 2014/15, the following external
directorships were undertaken and the fees retained by the
executive directors:
• Sebastian James was appointed a non-executive director of
Direct Line Insurance Group plc on 28 August 2014 and was
paid a fee of £53,000 from appointment to 2 May 2015.
• Katie Bickerstaffe has been a non-executive director of
Scottish and Southern Energy plc during 2014/15 and was
paid a fee of £57,000 for the period to 2 May 2015.
How the remuneration policy will be applied in 2015/16
Executive directors
i) Base Salary
The Committee reviewed the executive directors’ salaries in
2014 as part of the Merger. Where individuals were appointed
to new roles, in line with our recruitment policy, base salary
levels were set taking into account a range of factors including
market levels, experience and internal relativities.
Due to the changes in base pay at Merger, no changes are
proposed to the base salaries of the executive directors
during 2015/16.
Salary at
2 May
2015
£’000
Increase in
Salary at
7 August
2014
£’000
Salary at
30 March
2014(1)
£’000
Current directors
Sebastian James(2) 820 — 820
A
ndrew Harrison 550 15.8% 475
Humphrey Singer(2) 475 — 475
Katie Bickerstaffe(2) 500 — 500
Graham Stapleton(2) 460 — 460
(1) Date of appointment, if later.
(2) Appointed 6 August 2014.
ii) Pension Contributions
Company Contributions or allowance in lieu will continue in
2015/16 at their current levels of 10% for Sebastian James,
Humphrey Singer and Katie Bickerstaffe and 5% Andrew
Harrison and Graham Stapleton.
iii) STIP (Annual performance bonus)
The maximum annual bonus for 2015/16 will be 125% of base
salary and will operate on a similar basis as for the previous
year. That is, the measures have been selected to reflect our
key strategic objectives and are aligned to our Group balanced
scorecard, with a minimum profit gate that must be achieved
before any bonus is paid out. The proposed target levels for
the year have been set to be challenging relative to the
business plan. The Committee feels that specific targets
relating to the 2015/16 bonus scheme are currently
commercially sensitive and as such will not be disclosed.
However, retrospective disclosure of the targets and
performance against them will be provided in next year’s
Remuneration report to the extent that they do not remain
commercially sensitive at that time.