Carphone Warehouse 2016 Annual Report Download - page 67

Dixons Carphone plc Annual Report and Accounts 2015/16
Corporate Governance
65
Remuneration Committee discretions
The Committee operates the annual bonus plan, long term
incentive and all employee plans in accordance with their
respective rules, the Listing Rules and HMRC rules (or
overseas equivalent) where relevant. The Committee retains
discretion, consistent with market practice, over a number of
areas relating to the operation and administration of these
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
and the approved policy);
•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 recovery and withholding 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 a new long term incentive policy
a consultation took place with major shareholders to explain
the Committee’s proposed approach. Following constructive
feedback, the Committee determined to put a cap on the level
of award under the Company’s Long Term Incentive Plan in
exceptional circumstances, such as recruitment.
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. The Committee is kept
informed of general employment conditions across the Group,
including the annual pay review outcomes.
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 over the longer-term in order for the
Company to continue to grow.
The Company encourages wide employee share ownership,
and as such the Group’s UK & Irish employees who meet the
eligibility criteria are also invited to join the Company’s UK &
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 a higher 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 Remuneration Policy table. As such, 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 (including
any tax thereon);
•for an overseas appointment, the Committee will have
discretion to offer cost-effective benefits and pension
provisions which reflect local market practice and
relevant legislation;
•the Committee may set alternative performance conditions
for the remainder of the initial annual bonus performance
period, taking into account the circumstances and timing
of the appointment; and
•the Committee retains the discretion to provide an
immediate interest in Company performance by making
a long term incentive award on recruitment (or shortly
thereafter if in a prohibited period) 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.