John Lewis Partnership plc annual report and accounts 2012

Directors’ report continued

Remuneration Committee (continued)

Chairman

The Committee makes a recommendation each year to the Partnership Board on the Chairman’s pay based on appropriate market data supplied by the independent external remuneration consultant, an assessment of performance co-ordinated by the Deputy Chairman and having regard to Rule 63 of the Partnership’s Constitution.

It is the responsibility of the Chairman, under Rule 44, to ensure the system for deciding the pay and benefits of individual Partners is fair.

The Board’s policy is to be open about pay and the Partnership puts a great deal of effort into ensuring effective communication with Partners on matters relating to pay.

Executive directors and senior management

 The Committee determines the pay of the Partnership Board’s executive directors on the basis of appropriate market data and the recommendations of the Chairman.

Executive directors do not retain earnings from any external appointments unless the appointment predates their joining the Partnership.

Non-executive directors

The remuneration of non-executive directors is determined by the Committee’s elected directors, following a recommendation from the Director of Personnel, having regard to the Chairman’s views and relevant market data provided by the independent external remuneration consultant.

Elected directors

The salaries of elected members of the Partnership Board are determined by their managers and do not include any element in recognition of their Partnership Board duties.

Directors’ emoluments

 With the exception of the non-executive directors, Partnership Board directors do not receive fees as they are all paid a salary for their respective roles within the business, in accordance with the Partnership’s pay policy. There are no annual incentive bonuses or long-term bonus schemes related to individual performance. Partnership Board directors, except for the non-executive directors, receive Partnership Bonus at the same percentage as all other Partners. Details of directors’ emoluments are set out in note 8.

No executive contract is for a period longer than one year or contains a provision regarding early termination compensation.

Chairman’s Nominations Committee

The Chairman’s Nominations Committee is chaired by the Partnership’s Chairman and also comprises David Barclay, a non-executive director and the Partnership’s Deputy Chairman, David Anderson, a non-executive director, and two of the five directors elected by the Partnership Council, chosen by that group, currently Kim Lowe and Johnny Aisher. Their attendance at meetings is shown in the table.

Table showing attendance at meetings

The Committee is responsible for regularly reviewing the structure, size and composition (including the skills, knowledge and experience required) of the Board and makes recommendations to the Board with regard to any changes. It is supported by the Director of Personnel and assisted by independent consultants, as required.

The Partnership values diversity (including gender) and the Board is committed to ensuring that it employs a balanced and diverse range of Partners, alongside seeking to employ and promote the best talent. The Board recognises that balanced and diverse boards are effective boards and its composition, including five Elected Directors from within the Partnership, helps to ensure that the Board is comprised of a diverse range of individuals. More information on the group’s diversity policy can be found on page 17.

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