Audit Committee Overview

The Remuneration Committee Philosophy and Remit • • BAE SYSTEMS Our remit has expanded over the last several years, partly in response to government policy and stakeholder input. But the Committee has deepened its approach because we believe that well- designed remuneration can be a tool of culture change and progressive improvement in company performance. We establish and administer detailed goals which form the basis for remuneration of the Executive Directors and the members of the Executive Committee. We also ensure that the incentives we set for short and long-term incentives cascade appropriately throughout the wider workforce. We seek to assure that the remuneration for the wider workforce is consistent with market trends, with regulation, and is non-discriminatory with respect to gender, ethnicity and other personal attributes not related to performance. We meet periodically, as do all board members, with the wider workforce and with high-potential employees to engage in candid dialogue. The Remco chair actively seeks input from shareholders in advance of policy changes and major decisions on remuneration. Copyright 2020 BAE Systems. All Rights Reserved. BAE SYSTEMS is a registered trademark. 222

View entire presentation