John Lewis Partnership plc annual report and accounts 2012
The Audit and Risk Committee concluded that compliance with the Order and with GSCOP is well embedded within Waitrose and approved the Code Compliance Officer's report to the Office of Fair Trading.
The Remuneration Committee is chaired by David Barclay, a non-executive director and the Partnership’s Deputy Chairman. In addition to its chairman, the members of the Committee are Baroness Hogg, a non-executive director, and two of the five directors elected by the Partnership Council, chosen by that group, currently Anne Buckley and Tony Probert. Their attendance at meetings throughout the year is shown in the table.
Graph showing Remuneration Committee Meetings
The Committee recommends the remuneration of the Chairman to the Board and has delegated authority from the Board to determine the remuneration of the executive directors. The Committee keeps under review senior remuneration policy and makes recommendations to the Board as appropriate.
In considering remuneration for the Chairman and the executive directors, the Remuneration Committee seeks to apply the same principles which apply to all Partners in the business taking into account:
– Individual performance, including the achievement of specified personal objectives and the behaviours demonstrated in achieving those objectives;
– The performance of the function or division for which the individual is responsible, and/or Group performance where appropriate;
– The market context, based on the advice of Towers Watson, who are the Committee’s independent remuneration consultants; Towers Watson also provide the Partnership’s job evaluation system;
– The Partnership’s Pay Policy and the overall positioning of Partnership pay against the market.
The Partnership’s principles of fairness are embodied in its Constitution, particularly Rule 61 (which states the Partnership’s intention to set pay rates to attract and retain high calibre people and pay each Partner the local market rate for satisfactory performance and as much above that as can be justified by better performance), and Rule 63 (which states that the pay of the highest paid Partner shall be no more than 75 times the average basic pay of non-management Partners, calculated on an hourly basis). Since the year end the Partnership Council has approved an amendment to Rule 61 which now states that “The Partnership sets pay ranges which are informed by the market and which are sufficient to attract and retain high calibre people. Each Partner is paid a competitive rate for good performance and as much above that as can be justified by better performance. Partnership Bonus is not taken into account when fixing pay rates.”
As at 28 January 2012, the salary of the highest paid Partner was £825,000, which was 60 times the average basic salary of non-management Partners.
In making pay comparisons with the market, the Remuneration Committee takes into account the value of base salary and pension benefits. No attempt is made to match the value of the long term incentive schemes, share and share option schemes which are widely available in the market at these levels.
The Committee is supported by the Director of Personnel and Head of Reward. No member of the Committee takes part in any deliberations with regard to their own remuneration.