Peachtree 2013 Annual Report Download - page 77

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Reward principles and objectives
Our remuneration policy is guided by a common reward framework
and set of principles and objectives.
Reward policies
Attract and retain. Remuneration packages are designed to attract
high-calibre executives in a competitive international market which
includes private-equity backed organisations as well as listed
companies, and remunerate executives fairly and responsibly.
Motivate and reward. Remuneration is designed to motivate delivery
of our key business strategies, create a strong performance-orientated
environment and reward achievement of meaningful targets over the
short and long term.
Reward principles
Alignment with the wider Group. The remuneration policy for
executives reflects the overriding remuneration philosophy and principles
of the wider Group. When determining the remuneration policy and
arrangements for executive directors, the Remuneration Committee
considers pay and employment conditions elsewhere in the Group
to ensure that pay structures are appropriately aligned and that levels
of remuneration remain appropriate in this context. The Remuneration
Committee receives information on bonus levels and base salary reviews
for other managers around the Group for this purpose.
Stretching performance targets. The Remuneration Committee
considers that a successful remuneration policy must ensure that a
significant part of the remuneration package is linked to the achievement
of stretching corporate performance targets and a strong alignment
of interest with shareholders. Reflecting our pay for performance policy,
bonus and share awards are linked to performance conditions with
pre-determined targets. No payment is made below threshold levels
of performance and, at stretch levels of performance, c. 70% of total
compensation is delivered through performance-related incentives
paid in a combination of cash and shares.
Link between remuneration and our Group strategy
Our remuneration policy is linked to our Group strategy in the
following ways:
Performance measures
In 2012 management reviewed and realigned the strategy
of the business to accelerate organic revenue growth, drive margins
and improve EPS performance. Remuneration structure design
was modified to support that strategy. Short-term and long-term
performance measures have been selected based on our annual
focus on profitability and organic revenue growth, as well as strategic
measures reflecting customer experience and key products. Short-term
incentivisation is reinforced by our long-term measures which balance,
amongst other matters, profitability, organic growth and the creation
of sustainable shareholder value.
Alignment with our shareholders
We consulted many of our significant investors and shareholder
representative bodies last year and some modifications were made
to the proposed design in response to the feedback received. More
broadly, a significant proportion of remuneration is performance-based
and delivered through shares. Our bonus deferral policy and
shareholding guidelines also foster an ongoing commitment to the
business from our executives.
75The Sage Group plc | Annual Report & Accounts 2013
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