Marks and Spencer 2015 Annual Report Download - page 62

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60
MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT: GOVERNANCE
REMUNERATION POLICY
CONTINUED
NON-EXECUTIVE DIRECTORS’ REMUNERATION POLICY CONTINUED
FIGURE 6: RECRUITMENT POLICY
The table opposite sets out the recruitment
policy for non-executive directors.
AGREEMENTS FOR SERVICE
All non-executive directors, including the
Chairman, have an agreement for service
for an initial three-year term; these are
available for shareholder inspection at the
Company’s registered office. The Chairman
has an agreement for service which requires
six months’ notice by either party. Non-
executive directors’ service agreements
may be terminated by either party giving
three months’ notice. In line with the UK
Corporate Governance Code, all non-
executive directors are subject to annual
re-election by shareholders at our AGM.
Since the approval of the remuneration
policy at the AGM held on 8 July 2014,
a number of changes concerning the
implementation of the approved policy
have been made. These amendments do
not require prior shareholder approval
and do not change the current approved
remuneration policy.
PERFORMANCE SHARE PLAN/
EXECUTIVE SHARE OPTION SCHEME
The Company’s Performance Share Plan
(PSP) and Executive Share Option Scheme
(ESOS) were fi rst approved by shareholders
in 2005. As such, they are due to expire in
2015 and will be updated with replacement
plans if approved by shareholders at the
2015 AGM. The terms of the proposed new
plans are principally in line with those of
the 2005 Plans and are fully in line with the
policy approved by shareholders at the
2014 AGM . Further details of the proposed
replacement plans are set out in the
Notice of Meeting and on page67.
CLAWBACK PROVISIONS
M&S is committed to ensuring its
remuneration arrangements motivate
participants to strive for exceptional
performance whilst also protecting
shareholder value from the Company
taking unnecessary risks. In line with
updated guidance in the UK Corporate
Governance Code, clawback provisions will
be introduced as part of the replacement
share scheme rules at the 2015 AGM. Upon
introduction, these clawback provisions will
apply to payments made under the 2015/16
Annual Bonus Scheme and any future
bonus schemes operated by M&S. Awards
made under any of the Company’s other
executive share schemes (including the
Performance Share Plan) in 2015 and
onwards will similarly be subject to clawback
provisions. These provisions enable the
Committee, in its absolute discretion, to
reclaim awards paid to individuals for up to
three years after the respective vesting or
payment date (or up to two years in the case
of PSP awards) where specifi ed events occur.
The specifi ed events include gross
misconduct or where a material
misstatement of the Company’s fi nancial
statements has occurred. Clawback may be
e ected, among other means, by requiring
the transfer of shares, payment of cash, or
reduction of awards.
All outstanding share awards made since
2013 will continue to be subject to the
malus provisions which were introduced
at that time and as repor ted on page 58
of this report. These malus provisions will
be renewed as part of the replacement
share plan rules.
UNVESTED AWARDS UNDER
RESTRICTED SHARE PLAN AND
EXECUTIVE SHARE OPTION SCHEME
As shown on page 56, Laura Wade-Gery and
Steve Rowe had unexercised Restricted
Share Plan and Executive Share Option
Scheme awards respectively, when the
remuneration policy was fi rst implemented.
In both instances, these outstanding awards
have now been exercised during the year.
RECRUITMENT
POLICY
Fees
Benefi ts
The Committee takes into account a number of factors when determining
an appropriate fee level for the Chairman. The CEO and executive directors
determine appropriate fee levels for the non-executive directors. This
consideration includes the time commitment and responsibility of the
individual role and market practice in appropriate comparator groups.
The Company may o er benefi ts to the Chairman set in l ine with our policy
as detailed on page 59.
INFORMATION ON REMUNERATION POLICY SINCE APPROVAL
Element