CYBG PLC BOARD REMUNERATION COMMITTEE. Charter

Transcription

1 Charter Cmmittee Rle The Bards Remuneratin Cmmittee will act as the bard level Remuneratin Cmmittee fr Clydesdale and Yrkshire Banking Grup ( CYBG ) PLC and its subsidiaries, including fr the avidance f dubt, Virgin Mney Hldings (UK) PLC and any f its respective subsidiaries (tgether, the Grup). The rle f the Cmmittee is t: Recmmend t the Bard f CYBG ( Bard ) fr apprval a remuneratin plicy ("Remuneratin Plicy") f the Grup Within the terms f the remuneratin plicy cnsider and implement the remuneratin arrangements f the Chairman, executive directrs f the Cmpany (each an "Executive Directr"), members f the leadership team ("CYB Leadership Team"); including, fr the avidance f dubt, any members appinted fllwing cmpletin f the ffer t acquire the Virgin Mney Grup, and the Cmpany Secretary fr apprval by the Bard. Within the terms f the remuneratin plicy cnsider and apprve the remuneratin arrangements f any ther senir executives and emplyees cvered by the Prudential Regulatin Authrity ("PRA") and the Financial Cnduct Authrity ("FCA") Senir Management Arrangements, Systems and Cntrls Remuneratin Cde ("Remuneratin Cde") whilst having regard fr remuneratin scales and structure acrss the Grup. Exercise versight fr remuneratin issues. Reprt t the Grup Bard, identifying any matters within its remit in respect f which it cnsiders that actin r imprvement is needed and making recmmendatins as t steps t be taken. Ring-fencing bligatins Where waivers r mdificatins frm the PRA Ring-fenced Bdies Rulebk have been granted by the PRA t perate cmmn Bards acrss CYBG, Clydesdale Bank PLC (CB) and Virgin Mney Hldings (UK) PLC ( VM ), all ring-fencing bligatins relating t Bard Cmmittee cmpsitin, rles and independence criteria as defined in the CB 1

2 Chair Remuneratin Cmmittee and VM Remuneratin Cmmittee charters must be fllwed. The chair f the Cmmittee (the "Cmmittee Chair") shall be an independent Nn-Executive Directr. The Cmmittee Chair may nly perfrm the chair f remuneratin cmmittee rle fr ther Grup entities as permitted by the Prudential Regulatin Authrity's Ringfenced Bdies Rulebk, cnsidering any rule waiver r mdificatin granted by the PRA. The Chairman f the Bard (the "Chairman") shall nt be Cmmittee Chair, nr chair any meetings, but may be a Cmmittee member prviding they were cnsidered independent n appintment. In the absence f the Cmmittee Chair at any meeting, the remaining Cmmittee members present shall elect ne f their number t chair the meeting, unless the Cmmittee Chair has designated a member f the Cmmittee t deputise fr them in their absence. Members The Cmmittee Chair and Cmmittee members are appinted by the Bard n the recmmendatin f the Bard's gvernance and nminatin cmmittee ("G&N Cmmittee") and, in relatin t Cmmittee members, in cnsultatin with the Cmmittee Chair. The Cmmittee shall cmprise at least three members (which shall include the Cmmittee Chair), all f whm are t be independent nn-executive directrs f the Cmpany (each a "Nn-Executive Directr"). "Independence" fr these purpses will be assessed by reference t prvisin B.1.1 f the April UK Crprate Gvernance Cde. Cmmittee members shall cllectively have apprpriate remuneratin, regulatry and industry knwledge, expertise and prfessinal experience, t ensure that the remuneratin structure is aligned with the risk and capital prfile f the Grup. The appintments f the Cmmittee Chair and Cmmittee members shall be fr a perid f up t three years r shrter 1 July 2018 UK Crprate Gvernance Cde will nt apply t CYBG until financial year beginning 1 Octber

3 if circumstances dictate, which may be extended fr up t tw further three-year perids prvided the Cmmittee member still meets the criteria fr membership f the Cmmittee. Ntwithstanding this, where criteria fr membership cntinues t be met, the Bard may reslve t reappint the Cmmittee Chair r Cmmittee member fr additinal perids. Standing Attendees Additinal Invitees The Cmmittee Chair, with the supprt f the Cmmittee, will determine which ther directrs f the Cmpany, and members f the management team, are t be standing attendees f the Cmmittee. The secretary f the Cmmittee (the Secretary ) shall maintain a register f standing attendees appinted pursuant t this clause. N ne ther than the Cmmittee Chair and Cmmittee members is entitled t be present at a meeting f the Cmmittee, but thers may attend at the invitatin f the Cmmittee Chair with the supprt f the Cmmittee. Any ther attendees fr either all r part f Cmmittee meetings shall be agreed with the Cmmittee Chair. Qurum Meeting Frequency The qurum necessary fr the transactin f business f the Cmmittee shall be tw members, ne f whm shuld nrmally be the Cmmittee Chair. In the absence f the Cmmittee Chair, the remaining members present shall elect ne f themselves t chair the meeting. The Cmmittee Chair shall nt have a casting vte. The Cmmittee shuld meet ften enugh t discharge effectively its rle and respnsibilities but nt less than fur times per annum. The Cmmittee Chair may call a meeting at any time and will call a meeting f the Cmmittee if s requested by any member f the Cmmittee r by the Chairman f the Bard. 3

4 Secretary The Cmpany secretary ( Cmpany Secretary ) r their delegate shall act as Secretary f the Remuneratin Cmmittee. Surce f Authrity The Cmmittee will perate under delegated authrity frm the Bard and has full pwer t make decisins cncerning matters referred t in this Charter, while decisins relating t items included in the Matters Reserved fr the Bard (as defined in the Bard's charter), must be referred t the Bard. The Cmmittee shall have adequate access t infrmatin and shall determine the nature, amunt, frmat and frequency f the infrmatin which it is t receive. The Cmmittee shall have access t sufficient resurces and the authrity t seek any infrmatin it requires frm emplyees f the Grup, including the Cmpany Secretary, r therwise in rder t fulfil its rle and respnsibilities. The Cmmittee may, at the Cmpany's expense, btain any apprpriate independent external expert advice, including remuneratin cnsultants, n any matter it cnsiders necessary t fulfil its rle and respnsibilities. The Cmmittee may frm time t time establish subcmmittees as it cnsiders necessary r apprpriate t assist in carrying ut its respnsibilities. Any such sub-cmmittee must cmprise ne r mre members f the Cmmittee and shall adpt a charter, t be apprved by the Cmmittee, setting ut matters relevant t the authrity, rle, respnsibilities, cmpsitin and peratin f that subcmmittee. Respnsibilities In perfrming the rle utlined abve, and in cnsultatin with CYBG, the Cmmittee shall attend t the fllwing: Develpment f Remuneratin Strategy and Plicy Determine and recmmend t the Bard fr apprval the Remuneratin Plicy in a way that aims t prvide a structured and balanced remuneratin package fr all clleagues, including all Executive Directrs, aligned t the Grup strategy, risk appetite, culture, values and lng-term interests.. 4

5 N Directr r member f the CYB Leadership Team shall be invlved in any decisins relating t their wn remuneratin. Ensure the Remuneratin Plicy includes perfrmancebased variable rewards (cash and share-based annual bnus plans and lng-term incentive plans), cre fixed elements (base salary and benefits including pensin arrangements) and cmpensatin payments and ensure the Remuneratin Plicy has regard t the risk appetite f the Grup and the alignment with its lng-term success;. Receive reprts frm the risk functin and/r risk cmmittees f the Grup ( Risk Cmmittees ), n the implicatins f the Remuneratin Plicy fr risk and risk management and receive and cnsider advice frm the Risk Cmmittee n risk weightings and adjustments t be applied t perfrmance bjectives and remuneratin arrangements; Receive reprts frm the finance functin and/r audit cmmittee f the Grup ( Audit Cmmittee ) n the implicatins f applying the Remuneratin Plicy arising frm the Grup s strategy r perfrmance; Liaise, via the Cmmittee Chair, with the chairs f the Grup Risk Cmmittee and the Audit Cmmittee as t the mst apprpriate way fr the tw preceding prvisins t be dealt with between the respective cmmittees frm time t time; Undertake a peridic review, at least annually, f the Remuneratin Plicy t ensure its adequacy, effectiveness and cntinued cmpliance and alignment with the Cmpanies Act 2006, the Large and Medium-sized Cmpanies and Grups (Accunts and Reprts) Regulatins 2008 (as amended), the Remuneratin Cde, any ther relevant regulatry requirements (including the remuneratin requirements within the PRA s Ring-fenced Bdies Rulebk) and the best practice principles f the UK Crprate Gvernance Cde; Include measures in the Remuneratin Plicy t avid ptential cnflicts f interest in the design f incentive arrangements t ensure the interests f custmers, emplyees, sharehlders and ther stakehlders are aligned; 5

6 Cnsider and apprve the malus and clawback plicy t be applied t any incentive plans f the Cmpany and the CB Grup; Determine the plicy fr pensin arrangements fr the Executive Directrs and each member f the CYB Leadership Team (including, fr the avidance f dubt, any members appinted fllwing cmpletin f the ffer t acquire the Virgin Mney Grup), including the elements f remuneratin that shuld be pensinable; Submit the Remuneratin Plicy, at least every three years, t a binding vte f the Cmpany s sharehlders, cnsider and, where apprpriate, respnd t feedback received frm sharehlders thrugh that prcess; Ensure that, at least annually, the implementatin f Remuneratin Plicy is subject t central independent internal review fr cmpliance with the plicies and practices adpted by the Bard. Oversee any majr changes in emplyee benefit structures f the Grup; Establish the verall parameters fr bnus plans f the emplyees f the Grup; and CYB Leadership Team and Chair s Remuneratin Within the terms f the Remuneratin Plicy: Determine, n appintment t the Grup, the terms and cnditins f remuneratin in respect f the chairman f the Grup (the Chairman ), Executive Directrs and each member f the CYB Leadership Team (including, fr the avidance f dubt, any members appinted fllwing cmpletin f the ffer t acquire the Virgin Mney Grup), cmprising basic fee/salary, perfrmance-based variable rewards, benefits including pensin and any buy-ut f frfeited awards. Determine any changes t the remuneratin f the Chairman, Executive Directrs and CYB Leadership Team members (including, fr the avidance f dubt, any members appinted fllwing cmpletin f the ffer t acquire the Virgin Mney Grup), cnsidering any recmmendatins f the Chairman r the chief executive f the Grup (the Chief 6

7 Executive Officer ), giving due regard t the verarching remuneratin strategy, pay and emplyment cnditins acrss the Grup as a whle, the risk appetite and culture, the lng-term interests f sharehlders and alignment t the lng term strategic gals f the Grup; Determine, n terminatin, the cmpensatin payment, if any, due t the Chairman, Executive Directrs r CYB Leadership Team members (including, fr the avidance f dubt, any members appinted fllwing cmpletin f the ffer t acquire the Virgin Mney Grup), having regard t the circumstances f the terminatin and terms f the relevant emplyment cntract and perfrmance-based plans and, in relatin t any such arrangements cncerning the Chief Executive Officer, the Cmmittee shall determine and recmmend fr apprval t the Bard, with the cnsent f CYBG, the terms f any terminatin f such emplyment, ensuring at all times, that failure is nt rewarded. Determine a sharehlding plicy and prmte the alignment f the interests f the Grup s sharehlders and Directrs. This may require maintenance f a sharehlding in the Grup in line with the relevant Directr s ttal cmpensatin t be built up ver a perid at the Cmmittee s discretin r hlding shares awarded under share-based plans fr a further perid after vesting; The Bard will determine the remuneratin f the Nn- Executive Directrs within the limits set ut in the Articles and the terms f the Remuneratin Plicy. Material risk takers Within the terms f the Remuneratin Plicy: Cnsider and apprve the list f all emplyees falling within the scpe f Material Risk Taker ( MRT ) as per the regulatry technical standard issued by the Eurpean Banking Authrity and any ther regulatry requirements against the Grup s risk prfile fr each financial year and as amended frm time t time; Mnitr the remuneratin arrangements f all MRTs in line with the Remuneratin Cde and as agreed with the regulatrs; 7

8 Apprve annually the frmal remuneratin plicy statement (the Statement ) required under the Remuneratin Cde and seek and receive assurance that all payments have been made in accrdance with the Statement; and Apprve the treatment f any deferred awards and any cmpensatin payments n terminatin fr MRTs in excess f such emplyee s entitlement under their cntractual terms, ensuring always that failure is nt rewarded. Perfrmance-related Remuneratin and Share Schemes Within the terms f the Remuneratin Plicy: Review the design f, and determine targets fr, any shrtterm perfrmance-related remuneratin schemes perated by the Grup, and: recmmend the annual bnus arrangements t the Bard fr apprval; apprve the rules underpinning such schemes; determine actual perfrmance against such achievement levels (based upn the annual financial results f the Grup, apprved by the Bard), in relatin t financial targets and nn-financial targets as determined in the business plan; recmmend t the Bard fr apprval the ttal annual payments made under such schemes; and subject t Bard apprval f the ttal annual bnus payments apprve the allcatin f the annual bnus pls; Apprve the release, at the relevant times, f payments relating t any deferred bnuses and the release f deferred awards under the Grup's lng-term incentive plans, ensuring all cnditins attached t such payments r schemes are satisfied; Review the design, including any perfrmance cnditins, f all share incentive schemes t be perated by the Grup and: recmmend the rules f any new share schemes t the Bard fr apprval; fr any such schemes, each year recmmend t the Bard the verall value f such awards, the individual 8

9 awards t the Executive Directrs and Executive leadership team members and the perfrmance cnditins and assciated achievement levels (as set ut in the plan rules) t be used; and seek apprval frm the Bard t changes t the Grup s share capital, and issue f share, in relatin t emplyee share plans fr the Grup. seek and receive reprts and cnsider input frm the Risk Cmmittee t ensure there is apprpriate risk input int annual and lng-term perfrmance bjectives and individual/functinal perfrmance assessment. The Cmmittee will als receive input frm the Risk Cmmittee n any functinal bnus pls, the vesting f lng-term incentives and all adjustments t any variable pay including perfrmance adjustment, risk adjustment and applicatin f malus and clawback. Other Respnsibilities The ther respnsibilities f the Cmmittee are t: Be respnsible, fr establishing the selectin criteria, selecting appintees and setting the terms f reference fr any remuneratin cnsultants wh advise the Cmmittee, within the budgetary cnstraints impsed by the Bard; Determine the apprach t remuneratin gvernance and perfrmance management framewrk fr the Grup; Agree the plicy fr authrising claims fr expenses frm the Directrs; Obtain reliable, up-t-date infrmatin abut remuneratin in ther cmpanies f cmparable scale and cmplexity; and Cnsider ther matters relating t the purpse f the Cmmittee as are referred t it by the Bard. In discharging their duties, each Cmmittee member shall have due regard t the legislative and regulatry rules applicable t them as Directrs, the prvisins f sectins 171 t 177 f the Cmpanies Act 2006, the Remuneratin Cde, the Listing Rules and Disclsure and Transparency Rules, best practice principles f the UK Crprate 9

10 Gvernance Cde and any ther regulatry requirements, including the Ring-fenced Bdies Rulebk. Reprting The Cmmittee, thrugh the Cmmittee Chair r the Chair's nminee, shall reprt t the Bard at the earliest pssible meeting after each Cmmittee meeting any matters that shuld be brught t their attentin; any recmmendatins requiring apprval and / r actin; and any matters discussed at the Cmmittee meeting which may infrm the Bard's decisin-making. In additin, the Cmmittee shall prvide a reprt t all subsidiaries f any decisins taken, which require implementatin. The Cmmittee shall prepare and prvide reprts n the Grup's Remuneratin Plicy and practices t the Bard. The Cmmittee shall make a statement in Grup s annual reprt f the Cmmittee's membership and a descriptin f its duties and activities as apprpriate. The Cmmittee shall review and recmmend t the Bard the Directr s Remuneratin Reprt and Remuneratin Plicy (t be included at least every third year) fr inclusin in the Annual Reprt and Accunts and put t a sharehlder vte, and any ther remuneratin disclsures within the financial statements, half-yearly reprts and management statements. The Cmmittee shall ensure that any ther prvisins regarding disclsure f infrmatin in accrdance with relevant legal and statutry requirements are fulfilled, including, but nt limited t, disclsures made under the Cmpanies Act 2006, UK Crprate Gvernance Cde, Pillar 3 and ther disclsure requirements described in the Capital Requirements Directive IV and the Large and Medium-Sized Cmpanies and Grup (Accunts and Reprts) Regulatins 2008 and any ther regulatry requirements, including the Ring-fenced Bdies Rulebk. The Cmmittee shall, thrugh the Cmmittee Chair, ensure that the Grup maintains cntact as required with its principal sharehlders abut remuneratin. Escalatin The Cmmittee will reprt t the Bard identifying any matters within its remit in respect f which it cnsiders that actin r 10

11 imprvement is needed and making recmmendatins as t steps t be taken. The minutes f the Cmmittee will be made available t the Bard. Cmmittee Gvernance The perfrmance f the Cmmittee, the Cmmittee Chair and f each Cmmittee member shall be reviewed annually as part f the annual Bard's perfrmance evaluatin prcess which is verseen by the G&N Cmmittee. This Charter will be reviewed by the Cmmittee at least annually and any amendments will subsequently be apprved by the Bard. The Cmmittee Chair shall attend the annual general meeting f the Grup t answer any sharehlder questins f the Cmmittee s activities. Minutes are t be kept f all Cmmittee meetings and circulated t the Cmmittee and t the Bard. The Secretary shall maintain cpies f all Cmmittee agendas, meeting papers and minutes. 11