Strategic report Governance Financial statements Other information ANNUAL REPORT ON REMUNERATION CONTINUED Overall assessment and bonuses awarded for the financial year the deferred share element of bonuses up to the time of vesting and will be paid at exercise. Individuals (1 July 2020 to 30 June 2021) (Audited) have a right to exercise deferred awards after their respective vesting date provided they remained The Committee considered all of the above (including assurance against environmental, social and employed by the Group at exercise. governance risk factors) in making their bonus determination for Chris Hill and Philip Johnson for the Malus and clawback 2021 financial year. Annual bonus and SPP awards are subject to malus and clawback provisions in exceptional In addition, it also considered the extent to which performance (both Group and individual) has been circumstances. In addition, the Committee can defer a decision to award bonuses, or award and achieved within the agreed risk parameters, based on an assessment from the Group Chief Risk suspend payment of bonuses, and/or vesting of deferred bonus and/or SPP awards for any individual Officer, and the extent to which the bonus outcome reflects the overall performance of the business in scope of an investigation into their conduct or responsibility, accountability or knowledge and/or in the context of the client and shareholder experience. The Committee noted also that the Company influence over any material risk event identified during or after the performance year. The triggers did not take any Government support over the year and, instead, increased headcount in line with the that apply to malus and clawbackunder all incentive plans are set out at page 81 of last year’s report. growth seen over the period. Share awards made during the year ending 30 June 2021 (audited) The Committee concluded that the bonus outcomes for Chris Hill and Philip Johnson reflect the strong levels of Company performance during the year, as well as the high levels of leadership shown Market by both, including their performance against individual objectives and Company values. Finally, the value of maximum Share Number of Fair % of face Committee considered individual performance based bonus outcomes for the Executive Team and award at price on shares over Face value2 value that recognised that, although the outcomes appropriately reflect performance in the round, there were date of Exercise day of which the value1 at date would occasions when the overall client experience was not at the high standards we set ourselves. As a Name of Type of grant price grant award was of award of grant vest at Performance Director award £ £ £ granted5 £ £ threshold period result the Committee felt it was appropriate to exercise our discretion and reduce the overall 2021 Chris SPP3 315,000 Nil cost 15.71 20,050 315,000315,000 n/a 1July 2020 to bonus outcomes by 5%. Hill option 30 June 2023 The resulting bonuses determined by the Committee for the year ending 30 June 2021 are set out below: Deferred 828,794 1.00 16.46 50,352 828,793 828,793 n/a bonus4 Cash £’000 Deferred £’000 Total £’000 % of maximum Philip SPP3 223,000 Nil cost 15.71 14,194 223,000223,000n/a 1 July 2020 to Chris Hill 2021 1,175 783 1,958 86%1 Johnson option 30 June 2023 Chris Hill 2020 1,243 829 2,072 94% Deferred 579,985 1.00 16.46 35,236 579,984 579,984 n/a bonus4 Philip Johnson 2021 785 523 1,308 81%2 Philip Johnson 2020 870 580 1,450 93% Notes 1 Face value is calculated as the share price at grant date (being 9 October 2020) multiplied by the number of options granted. Notes 2 Fair value is calculated as the difference between market value and the exercise price at the original date of grant. 1 Having applied the performance outcome to the CEO’s on-target and maximum bonus opportunity (on a straight line basis),3 Awards under the SPP were granted on 9 October 2020 as nil cost options, at 50% of base salary subject to the achievement this results in a bonus of 302% of salary which is 86% of his maximum opportunity of underpinning performance conditions and will vest over five years. The underpinning performance conditions are: 2 Having applied the performance outcome to the CFO’s on-target and maximum bonus opportunity (on a straight line basis), A requirement for average AUA for the last complete financial year prior to vesting to be above the average AUA for the last • this results in a bonus of 285% of salary which is 81% of his maximum opportunity complete financial year prior to award; •Maintenance of a satisfactory risk, compliance and internal control environment across the plan period; and •Satisfactory personal performance throughout the plan period. Deferral of annual performance bonuses 4 Awards under the deferred bonus were granted at 40% of bonus. The aggregate exercise price for awards under the deferred 40% of the annual performance bonus is subject to compulsory deferral into nil-cost options over bonus scheme is £1 and were granted on 18 September 2020. shares which vest in equal tranches over a period of three years. Dividend alternatives will accrue on 5 The number of shares to be awarded is calculated by reference to the average of the mid-market value of HL shares on the three days preceding the date of award. 104 Hargreaves Lansdown Report and Financial Statements 2021