REG-Lon.&Assoc.Props PLC: Annual Financial Report <Origin Href="QuoteRef">LAS.L</Origin> - Part 3
28/04/2017 12:05
- Part 3: For the preceding part double click ID:nPRrS2637b
external advice
was taken in reaching this decision.
Shareholder voting
At the Annual General Meeting on 9 June 2016, there was an advisory vote on
the resolution to approve the Remuneration Report, other than the part
containing the remuneration policy.
In addition, on 10 June 2014, there was a binding vote on the resolution to
approve the Remuneration Policy. The results are detailed below:
% of votes for % of votes against Number of votes withheld
Resolution to approve the Remuneration Report (9 June 2016) 83.78 1.27 8,541,374
Resolution to approve the Remuneration Policy (10 June 2014) 99.12 0.67 66,918
Remuneration policy summary
The remuneration policy summary below is an extract of the group’s current
remuneration policy on directors’ remuneration, which was approved by a
binding vote at the 2014 AGM. The approved policy took effect from 10 June
2014.
A copy of the full policy can be found at www.lap.co.uk.
Element Purpose Policy Operation Opportunity and performance conditions
EXECUTIVE DIRECTORS
Base salary To recognise: Skills Responsibility Accountability Experience Value Considered by remuneration committee on appointment Set at a level considered appropriate to attract, retain, motivate and reward the right individuals Reviewed annually whenever there is a change of role or operational responsibility Paid monthly in cash There is no prescribed maximum salary or maximum rate of increase No specific
performance conditions are attached to base salaries
Pension To provide competitive retirement benefits Company contribution offered at up to 10% of base salary as part of overall remuneration package The contribution payable by the Company is included in the Director’s contract of employment Paid into money purchase schemes Company contribution offered at up to 10% of base salary as part of overall
remuneration package No specific performance conditions are attached to pension
contributions
Benefits To provide a competitive benefits package Contractual benefits include: Car or car allowance Group health cover Death in service cover Permanent health insurance The committee retains the discretion to approve changes in contractual benefits in exceptional circumstances or where factors outside the control of the Group lead to increased costs (e.g. medical inflation) The costs associated with benefits offered are closely controlled and reviewed on an
annual basis No specific performance conditions are attached to contractual benefits
The value of benefits for each Director for the year ended 31 December 2016 is shown
in the table on page 42
Annual Bonus To reward and incentivise In assessing the performance of the executive team, and in particular to determine whether bonuses are merited the remuneration committee takes into account the overall performance of the business, as well as individual contribution to the business in the period Bonuses are generally offered in cash or shares The remuneration committee determines the level of bonus on an annual basis applying such performance conditions and performance measures as it considers appropriate The current maximum bonus will not exceed 200% of base salary in any one year but the
remuneration committee reserves the power to award up to 300% in an exceptional year
Performance conditions will be assessed on an annual basis The performance measures
applied may be financial, non-financial, corporate, divisional or individual and in
such proportion as the remuneration committee considers appropriate
Share Options To provide executive Directors with a long-term interest in the Company Granted under existing schemes (see page 44) Offered at appropriate times by the remuneration committee Entitlement to share options granted under the Approved Option scheme are not subject
to performance criteria. Share Options granted under the Unapproved Scheme are
subject to the performance criteria specified in the Scheme rules Share options will
be offered by the remuneration committee as appropriate There are no maximum levels
for share options offered
Share Incentive Plan (SIP) To offer a shorter term incentive in the Company and to give Directors a stake in the Group Offered to executive Directors and head office staff Maximum participation levels are set by HMRC Of any bonus awarded, Directors may opt to have maximum of £3,000 of per year paid in
‘Free Shares’ under the SIP scheme rules Full detail of the SIP can be found on page
43
NON-EXECUTIVE DIRECTORS
Base salary To recognise: Skills Experience Value Considered by the board on appointment Set at a level considered appropriate to attract, retain and motivate the individual Experience and time required for the role are considered on appointment Reviewed annually There is no prescribed maximum salary or maximum rate of increase No performance
conditions are attached to base salaries
Pension No pension offered
Benefits No benefits offered except to one non-executive Director who is eligible for health cover (see annual remuneration report page 42) The committee retains the discretion to approve changes in contractual benefits in exceptional circumstances or where factors outside the control of the Group lead to increased costs (e.g. medical inflation) The costs associated with benefits offered are closely controlled and reviewed on an
annual basis No specific performance conditions are attached to contractual benefits
Share Options Non-executive Directors do not participate in the share option schemes
The remuneration committee consider the performance measures outlined in the
table above to be appropriate measures of performance
and that the KPI’s chosen align the interests of the directors and
shareholders.
Remuneration policy
Introduction
Set out below is the LAP Group policy on directors’ remuneration (excluding
Bisichi). This will be proposed for a binding vote at the 2017 AGM. If
approved the policy will take effect from 6 June 2017.
In setting the policy, the Remuneration Committee has taken the following
into account:
• The need to attract, retain and motivate individuals of a calibre who will
ensure successful leadership and management of the company
• The LAP Group’s general aim of seeking to reward all employees fairly
according to the nature of their role and their performance
Future policy table
Element Purpose Policy Operation Opportunity and performance conditions
Executive directors
Base salary To recognise: Skills Responsibility Accountability Experience Value Considered by remuneration committee on appointment Set at a level considered appropriate to attract, retain, motivate and reward the right individuals Reviewed annually whenever there is a change of role or operational responsibility Paid monthly in cash There is no prescribed maximum salary or maximum rate of increase No individual
director will be awarded a base salary in excess of £700,000 a year No specific
performance conditions are attached to base salaries
Pension To provide competitive retirement benefits Company contribution offered at up to 10% of base salary as part of overall remuneration package The contribution payable by the Company is included in the director’s contract of employment Paid into money purchase schemes Company contribution offered at up to 10% of base salary as part of overall
remuneration package No specific performance conditions are attached to pension
contributions
Benefits To provide a competitive benefits package Contractual benefits include: Car or car allowance Group health cover Death in service cover Permanent health insurance The committee retains the discretion to approve changes in contractual benefits in exceptional circumstances or where factors outside the control of the Group lead to increased costs (e.g. medical inflation) The costs associated with benefits offered are closely controlled and reviewed on an
annual basis No director will receive benefits of a value in excess of 30% of their
base salary No specific performance conditions are attached to contractual benefits
Annual To reward and incentivise In assessing the performance of the executive team, and in particular to determine whether bonuses are merited the remuneration committee takes into account the overall performance of the business, as well as individual contribution to the business in the period The remuneration committee determines the level of bonus on an annual basis. In assessing performance consideration is given to the level of net rental income, cash flow, voids, realised development gains and income from managing joint ventures. Achieved results are then compared with expectation taking account of market conditions Bonuses are generally offered in cash or shares The current maximum bonus will not exceed 200% of base salary in any one year but the
bonus remuneration committee reserves the power to award up to 300% in an exceptional year
Performance conditions will be assessed on an annual basis The performance measures
applied may be financial, non-financial, corporate, divisional or individual and in
such proportion as the remuneration committee considers appropriate
Share To provide executive directors with a long-term interest in the company Share options may be granted under existing schemes (see page 44) Where it is necessary to attract, retain, motivate and reward the right individuals, the directors may establish new schemes to replace any expired schemes Offered at appropriate times by the remuneration committee Entitlements to share options granted under the Approved Option scheme are not
options subject to performance criteria. Share Options granted under the Unapproved Scheme
are subject to the performance criteria specified in the Scheme rules. The aggregate
number of shares over which options may be granted under all of the company’s option
schemes (including any options and awards granted under the company’s employee share
plans) in any period of ten years, will not exceed, at the time of grant, 10 % of the
ordinary share capital of the company from time to time Share options will be offered
by the remuneration committee as appropriate
Share incentive plan (SIP) To offer a shorter term incentive in the company and to give directors a stake in the group Offered to executive directors and head office staff Maximum participation levels are set by HMRC Of any bonus awarded, Directors may opt to have maximum of £3,000 per year paid in
‘Free Shares’ under the SIP scheme rules
Non-executive directors
Base salary To recognise: Skills Responsibility Experience Risk Value Considered by the board on appointment Set at a level considered appropriate to attract, retain and motivate the individual Experience and time required for the role are considered on appointment Reviewed annually No individual non-executive director will be awarded a base salary in excess of
£40,000 a year No performance conditions are attached to base salaries
Pension No pension offered
Benefits No benefits offered except to one non-executive director who is eligible for health cover (see annual remuneration report page 42) The committee retains the discretion to approve changes in contractual benefits in exceptional circumstances or where factors outside the control of the Group lead to increased costs (e.g. medical inflation) The costs associated with benefits offered are closely controlled and reviewed on an
annual basis. No non-executive director will receive benefits in excess of £10,000 a
year No specific performance conditions are attached to contractual benefits
Share Non-executive directors do not participate in the share option schemes
options
Notes to the Remuneration Policy
In order to ensure that shareholders have sufficient clarity over director
remuneration levels, the company has, where possible, specified a maximum that
may be paid to a director in respect of each component of remuneration. There
have been no other significant changes made to the future remuneration policy
from the previous remuneration policy.
• Remuneration packages offered to similar companies within the same sector
• The need to align the interests of shareholders as a whole with
the long-term growth of the Group; and
• The need to be flexible and adjust with operational changes throughout the
term of this policy
The remuneration of non-executive directors is determined by the board, and
takes into account additional remuneration for services outside the scope of
the ordinary duties of non-executive directors.
The remuneration committee considers the performance measures outlined in the
table above to be appropriate measures of performance and that the KPI’s
chosen align the interests of the directors and shareholders.
For details of remuneration of other company employees please see page 45.
Remuneration scenarios
An indication of the possible level of remuneration that would be received by
each Executive director in the 12 months commencing 6 June 2017 in accordance
with the director’s remuneration policy is shown below.
The base salary level for Sir Michael Heller for the purpose of these graphs
(and bonus calculations) is £300k as per note on page 42.
Assumptions
Minimum
Consists of base salary, benefits and pension. Base salary, benefits and
pension for 2017 are assumed at the levels included in the single total figure
remuneration table for the year ended 31 December 2016.
On target
Based on the minimum, enhanced by a bonus calculated as the average percentage
bonus awarded to the individual in the three years ending on 31 December 2016.
As outlined in the policy summary above, the remuneration committee has
discretion to award bonuses of up to 200% of base salary in any one year (up
to 300% in an exceptional year). Base salary, benefits and pension for 2017
are assumed at the levels included in the single total figure remuneration
table for the year ended 31 December 2016.
Maximum
Based on the minimum, enhanced by the maximum bonus available in an
exceptional year (300% of base salary). Base salary, benefits and pension for
2017 are assumed at the levels included in the single total figure
remuneration table for the year ended 31 December 2016.
Approach to recruitment remuneration
All appointments to the board are made on merit. The components of the
remuneration package (for a new director who is recruited within the life of
the approved remuneration policy) would comprise base salary, pension,
benefits and an opportunity to earn an annual bonus and be granted share
options as outlined above. The approach to such appointments is detailed
within the policy summary above. The company will pay remuneration to new
directors at a level that will enable it to attract appropriately skilled and
experienced individuals but which is not, in the opinion of the remuneration
committee excessive.
Service contracts
All executive directors have full-time contracts of employment with the
Company. Non-executive directors have contracts of service. No director has a
contract of employment or contract of service with the company, its joint
venture or associated companies with a fixed term which exceeds twelve months.
Directors notice periods (see the annual remuneration report) are set in line
with market practice and are of a length considered sufficient to ensure an
effective handover of duties should a director leave the Company.
All directors’ contracts as amended from time to time, have run from the
date of appointment. Service contracts are kept at the registered office.
Policy on payment for loss of office
There are no contractual provisions that could impact on a termination
payment. Termination payments will be calculated in accordance with the
existing contract of employment or service contract. It is the policy of the
remuneration committee to issue employment contracts to executive directors
with normal commercial terms and without extended terms of notice which could
give rise to extraordinary termination payments.
Consideration of employment conditions elsewhere in the company
In setting this policy for directors’ remuneration the remuneration
committee has been mindful of the Company’s objective to reward all
employees fairly according to their role, performance and market forces. In
setting the policy for Directors’ remuneration the committee has considered
the pay and employment conditions of the other employees within the Group, but
no formal consultation has been undertaken with employees in drawing up the
policy. The committee has not used formal comparison measures.
Consideration of shareholder views
No shareholder views have been taken into account when formulating this
policy. In accordance with the new regulations, an ordinary resolution for
approval of this policy will be put to shareholders at the AGM in June 2017.
Audit committee
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