Remuneration Committee Report
Responsibilities Te Remuneration Committee provides advice and recommendations to the Board on the policy for remuneration of the Executive Directors of the Company and other senior managers, to agree within that policy the salary and benefits packages for Executive Directors and executive management and, to agree business unit cash bonus schemes and equity related remuneration and incentive schemes. Te Remuneration Committee is also responsible for agreeing any termination benefits.
Te full terms of reference of the Remuneration Committee are reviewed periodically by the Board and updated as necessary. A copy can be found on the Company’s website at
www.finsburyfoods.co.uk.
Membership Te Remuneration Committee is chaired by me, Raymond Duignan, the other member being Edward Beale, a Non-Executive Director. Both of us are considered to be independent Directors.
Procedures Te Remuneration Committee met three times during the year. Te Chief Executive is normally invited to attend Committee meetings.
Executive Directors Te remuneration packages for full time Executive Directors are structured to attract, motivate and retain Directors with the experience, capabilities and ambition required to achieve the Group’s strategic aims.
Te main elements of their remuneration packages are:
• Basic annual salary • Annual cash bonus payments • Share related incentives.
Te salaries of Executive Directors are set by the Committee in accordance with the policy agreed by the Board and reviewed annually, taking into account the performance of the Group, the individual and salary increases given to other Group employees.
Annual bonuses are paid to Executive Directors dependent upon Group profitability targets being achieved and individual objectives, as agreed with the Committee, being met. Bonus payments for the year to 28 June 2014 are disclosed in Note 7 to the Accounts.
Pension contributions for full time Executive Directors are set at up to 10% of basic annual salary excluding additional amounts arising from bonuses or salary sacrifice.
No Director has a service contract incorporating a notice period of more than 12 months.
Chairman and other Non-Executive Directors Non-Executive Directors are not rewarded with share options and so the Group’s share related incentive plans are restricted to Executive Directors and senior managers of the Group. Non-Executive Directors receive a fee. Te remuneration of the Chairman is determined by the Board and the remuneration of Non-Executive Directors is determined by the Chairman and the Group Chief Executive.
Annual Cash Bonus Schemes Te Remuneration Committee reviews and approves proposed annual cash bonus schemes within the Group. Te main characteristics of these schemes are that payments to individuals depend on the profitability of the business unit relative to its budget and the achievement of relevant personal or departmental performance conditions. Maximum payments under these schemes are set at levels that are meaningful, but not excessive, relative to individuals’ salaries.
Long-Term Incentive Scheme A new incentive scheme was agreed for the CEO and CFO of the Group in order to align their remuneration more closely with the performance of the Group and shareholder returns. Te scheme provides for a bonus to be paid, 50% in cash and 50% in equity, in the event that the EBITDA achieved by the Group is in excess of the Group's business plan as communicated to shareholders. All cash elements, including costs and tax, must be self funding ie must not impact negatively the Group plan as communicated. Any shares issued may not be sold without prior consultation and it is noteworthy that neither the CEO or CFO have sold shares or options, other than to pay tax thereon, since they joined the Group.
In respect of the 2014 financial year the bonuses payable to the CEO and CFO and the equity issued are set out in the table on Board remuneration in Note 7.
Raymond Duignan Chairman of the Remuneration Committee
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