Investor Presentaiton
BOOHOO GROUP PLC
DIRECTORS' REMUNERATION REPORT
CONTINUED
ANNUAL REPORT AND ACCOUNTS 2021
Purpose and
Element
link to strategy
Pension
To aid
Other
benefits
recruitment and
retention
⚫ To provide an
appropriate level
of fixed income
To provide a
competitive
benefits package
Shareholding
requirement
To
support
long-term
commitment to
the company
and
the alignment
of executive
director interests
with those of
shareholders
Operation
.
Executive directors may receive an
employer's pension contribution or cash
allowance
Executive directors
may
receive benefits
including health care, income protection
and life assurance, as well as other
standard group-wide benefits offered by
the company from time to time
Executive directors are also eligible to
participate in any all-employee share
plans operated by the company on the
same basis as for other eligible employees
(and in line with relevant HMRC rules)
The Remuneration Committee has
adopted formal shareholding guidelines
that will encourage executive directors
to build I up over a five-year period and
then subsequently hold a shareholding
equivalent to a percentage of base
salary. Adherence to these guidelines is
a condition of continued participation in
the equity incentive arrangements
These guidelines will continue to apply
for a minimum of two years following a
director's cessation of employment
Maximum
.
opportunity
.
.
Employer's defined
contribution or cash
allowance up to 6.2%
of salary
From 1 January 2023
this will be aligned
with the average
contribution rate for
the wider workforce
(currently 5%)
Framework used to assess
performance
N/A
.
The value of benefits
N/A
may vary from year
to year depending
on the cost to the
company
200% of salary for
executive directors,
rising to 400% of
salary on maturity of
the Growth Share
Plan/MIP
None
CHOICE OF PERFORMANCE MEASURES AND APPROACH TO TARGET SETTING
Growth Share Plan and MIP
The primary performance measure selected for John Lyttle's Growth Share Plan and for the MIP is market capitalisation growth over a five-year
and three-year period respectively. The targets reflect the ambitious growth plans for the group and the performance measure ensures that
executive directors' and senior managers' interests are fully aligned with shareholders. As explained in the Annual Statement by the Chairman of
the Remuneration Committee, an additional measure has been added to both plans which means that vesting of any awards requires successful
implementation of the Agenda for Change programme, thus tying management reward more closely to this critical priority for the business.
The performance metrics and targets that are set for the executive directors via the annual bonus plan and LTIP awards are carefully selected to
align closely with the group's strategic plan and key performance indicators.
Annual bonus
In terms of annual performance targets, the bonus is determined on the basis, primarily, of performance against financial measures, which are
identified as the key indicators of success against the strategy set annually. For the financial year ending 28 February 2022, additional non-financial
metrics have been introduced to the bonus scheme. The precise metrics chosen, along with the weightings of each, may vary from year to year. The
Committee will review the performance measures and targets each
year vary
them as appropriate to reflect the priorities for the business in the
year ahead.
LTIP
and
In terms of the LTIP, metrics will be set at the time of each grant but will normally include at least half based on financial performance in line with
our key objectives of delivering returns to shareholders through achievement of our growth strategy. The Committee will disclose the targets for
each award to the executive directors in advance in the annual report on remuneration unless the targets are commercially sensitive, in which case
they will be disclosed retrospectively. The Committee will review the choice of performance measures and the appropriateness of the performance
targets prior to each LTIP grant.
Challenging targets are set whereby modest rewards are payable for the delivery of threshold
levels of performance, rising to maximum rewards for the delivery of substantial outperformance
of our financial and operating plans.
DIFFERENCES IN REMUNERATION POLICY FOR
EXECUTIVE DIRECTORS COMPARED TO OTHER
EMPLOYEES
The Committee has regard to pay structures across the wider group when setting the
remuneration policy for executive directors. The Committee, in particular, considers the general
basic salary increase for the broader workforce when determining the annual salary review for
the executive directors.
Overall, the remuneration policy for the executive directors is more heavily weighted towards
performance-related pay
than for other employees. Performance-related long-term incentives
are provided for those employees considered to have the greatest potential to influence overall
levels of performance and those whose retention within the group is regarded as important.
That said, whilst the use of the LTIP, Growth Share Plan and MIP is confined to the more senior
management in the group, there is a commitment to encouraging widespread equity ownership
through, for example, our use of an HMRC-approved Share Incentive Plan and SAYE share
option scheme.
The level of performance-related pay varies within the group by grade of employee and is
informed by the specific responsibilities of each role, as appropriate.
The Committee has not consulted directly with employees in designing the remuneration policy
for the directors.
SERVICE CONTRACTS AND LOSS OF
OFFICE PAYMENTS
Executive directors are not employed on fixed term contracts.
Service contracts normally continue until the executive
director's agreed retirement date or such other date as the
parties agree. The company's policy is that executive directors
will be employed on a contract that can be terminated by the
company on giving no more than one year's notice, with the
executive director required to give up to one year's notice of
termination.
A director's service contract may be terminated without notice
and without any further payment or compensation, except for
sums earned up to the date of termination, on the occurrence
of certain events such as gross misconduct. The circumstances
of the termination (taking into account the individual's
performance) and an individual's duty and opportunity to
mitigate losses are taken into account by the Committee
when determining amounts payable on/following termination.
Our policy is to reduce compensatory payments to former
executive directors where they receive remuneration from
other employment during the compensation period. The
Committee will consider the particular circumstances of each
leaver on a case-by-case basis and retains flexibility as to
at what point, and the extent to which, payments would be
reduced. Details will be provided in the relevant annual report
on remuneration should such circumstances arise.
72
73
// GOVERNANCEView entire presentation