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John Lewis Partnership plc annual report and accounts 2013


Remuneration Report continued


It values defined benefit pension benefits on the “buy-out” basis, that is the cost of obtaining similar benefits in the market. On this basis, the total reward excluding Partnership Bonus of the highest paid Partner in the year ended 26 January 2013 was £1,338,000, which was 67 times the average total reward, excluding Partnership Bonus, of non-management Partners with three or more years’ service.


The Remuneration Committee


 Composition


 The Remuneration Committee consists of at least four members including two non-executive directors and two elected directors. The elected members of the Committee are chosen by the elected directors of the Partnership Board in consultation with the Chairman. The non- executive member and the Chairman of the Committee are appointed by the Partnership Board. A non-executive director and an elected director constitute a quorum, apart from when considering non-executive directors’ remuneration, when the quorum is two elected directors.


The Committee is chaired by David Barclay and comprises Steve Gardiner, Baroness Hogg and Kim Lowe. Anne Buckley and Tony Probert served as members until May 2012. David Barclay and Baroness Hogg served as members throughout the year and Steve Gardiner and Kim Lowe joined the Committee in May 2012.


The Board considers that all members of the Committee are independent for the purpose of reviewing remuneration matters. There have been seven meetings during the year, and directors’ attendance at meetings is shown in the table on page 42.






Work of the Committee


During the year the Committee has:


• submitted a recommendation on the Chairman’s pay to the Partnership Board;


• determined the remuneration of the executive directors based on appropriate market data supplied by the independent remuneration consultant and the recommendations of the Chairman;


• considered, as and when required in the course of the year, remuneration proposals for new appointments which fall within its terms of reference;


• reviewed senior management reward policy;


• reviewed the operation of Rule 63 and the application of its underlying principle to total reward; and


• reviewed its own terms of reference.






No member of the Committee takes part in any deliberations affecting their own remuneration.


The agenda for each meeting is approved by the Committee Chairman and each Committee member has the right to require reports on matters of interest.


Advice to the Remuneration Committee The Committee is supported by Tracey Killen, Director of Personnel, and Andrew Clark, Head of Reward.


The Committee has retained Towers Watson as remuneration consultants to advise generally on remuneration and related matters. Towers Watson also provide advice to the Partnership on the Partnership’s job evaluation system.


Directors’ emoluments (audited)


The remuneration table below shows the number of directors and their remuneration, including both Partnership Bonus and the pension supplements described below, for all directors except the elected directors:


2013 2012


£1 - £50,000 1 2


£50,001 - £100,000 3* 1


£300,001 - £350,000 1* -


£600,001 - £650,000 - 1


£650,001 - £700,000 - 1


£700,001 - £750,000 3* -


£1,000,001 - £1,050,000 - 1


£1,100,001 - £1,150,000 1 2


£1,200,001 - £1,250,000 1 -


£1,400,001 - £1,450,000 - 1


£1,450,001 - £1,500,000 1 -


 


* includes a director who did not serve for the full year. Emoluments are only included for their time on the Partnership Board.


Elected directors are not remunerated for their service on the Partnership Board as their remuneration is determined by their respective roles and responsibilities in the Partnership. Accordingly, their remuneration is not considered by the Committee or the Partnership Board.


 


48

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