Peachtree 2015 Annual Report Download - page 83

Recruitment remuneration arrangements
In the event of hiring a new executive director, the Remuneration
Commiee will seek to align the remuneration package with our
remuneration policy, which may include the elements outlined in the
policy table above. However, the RemunerationCommiee retains
the discretion to make appropriate remuneration decisions outside
the standard policy to meet the individual circumstances of the
recruitment. This may, for example, include the following circumstances:
– An interim appointment is made to fill an executive director role on
a short-term basis
– Exceptional circumstances require that the Chairman or a non-
executive director takes on an executive function on a short-term basis
– An executive director is recruited at a time in the year when it
would be inappropriate to provide a bonus or PSPaward for that
year as there would not be sufficient time to assess performance.
The quantum in respect of the months employed during the year
may be transferred to the subsequent year so that reward is provided
on a fair and appropriate basis
– An executive is recruited from a business or location that offered
some benefits that the Commiee might consider appropriate to buy
out but that do not fall into the definition of “variable remuneration
forfeited” that can be included in the buyout element under the
wording of the regulations
– The executive received benefits at his previous employer which the
Commiee considers it appropriate to offer
The Commiee may alter the performance measures, performance
period and vesting period of the annual bonus or long-term incentive,
subject to the rules of the plan, if the Commiee determines that the
circumstances of the recruitment merit such alteration. The rationale
will be clearly explained.
In determining appropriate remuneration arrangements on hiring a new
executive director, the Commiee will take into account relevant factors;
this may include the calibre of the individual, local market practice,
the existing remuneration arrangements for other executives and the
business circumstances. The Commiee seeks to ensure that
arrangements are in the best interests of both Sage and its shareholders
and seek not to pay more than is appropriate.
The maximum level of variable pay which may be awarded to
new executive directors in respect of their recruitment, excluding
buy-out arrangements, is 500% of base salary in the first year of
employment. Variable pay in subsequent years will be in line with
the policy table above.
The Remuneration Commiee may make awards on hiring an external
candidate to buy out remuneration arrangements forfeited on leaving
a previous employer. In doing so the Commiee will take account of
relevant factors including any performance conditions aached to
these awards, the form in which they were granted (e.g. cash or shares)
and the timeframe of awards. The Commiee will generally seek to
structure buyout awards on a comparable basis to awards forfeited.
In order to facilitate the variable pay opportunity and buyout awards
mentioned above, the Commiee may rely on the exemption in LR 9.4.2.
of the Listing Rules which allows for the grant of awards to facilitate, in
exceptional circumstances, the recruitment of a director. The Commiee
may also rely on the rules of the PSP,which permit the grant of two PSP
awards in the first year of employment, with the individual limit from the
plan rules applying separately to each PSP award.
Where an executive director is an internal promotion, the normal policy
is that any legacy arrangements would be honoured in line with the
original terms and conditions. Similarly, if an executive director is
appointed following Sage’s acquisition of or merger with another
company, legacy terms and conditions would be honoured.
In the event of the appointment of a new non-executive director,
remuneration arrangements will normally be in line with the structure
set out in the policy table for non-executive directors.
Change of control
The rules of the PSP provide that, in the event of a change of control,
unvested awards would vest to the extent determined by the
Remuneration Commiee taking into account the extent to which it
determines the performance conditions have been satisfied (based on
all factors it considers relevant) at the date of such event. The extent to
which the Remuneration Commiee allows awards to vest would also,
unless it determines otherwise, take into account the period of time
that has elapsed between the grant of the award and the date of the
change of control as a proportion of three years (or such other period
the Remuneration Commiee considers to be appropriate). However,
the Commiee may vary the level of vesting of awards if it believes
that exceptional circumstances warrant this. Awards that are subject
to a holding period at the time of the change of control will be released
at that time.
Awards granted under the deferred bonus plan will vest in full upon
a change of control. Awards held under all-employee plans would
be expected to vest on a change of control and those which have to
meet specific requirements to benefit from permied tax benefits
would vest in accordance with those requirements.
Alternatively, the directors may exchange their awards over Company
shares for equivalent awards in shares of the acquiring company if the
terms of the offer allow this.
If the Company is wound up or in the event of a demerger, delisting,
special dividend or other event which in the Remuneration Commiee’s
opinion, would materially affect the current or future value of the
Company’s shares, the Remuneration Commiee may allow deferred
share and PSP awards to vest and be released early on the same basis
as for a change of control.
The Sage Group plc | Annual Report & Accounts 2015 81
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