Strategic report Governance Financial statements Other information ANNUAL REPORT ON REMUNERATION CONTINUED CEO pay ratio The pay ratio has remained unchanged from the prior year due to CEO total remuneration reducing The table below sets out the ratio at median, 25th and 75th percentile of the total remuneration by the same proportion as UK employee median total remuneration. There have been no material received by the CEO for the last two years compared to the total remuneration received by our changes in pay or benefits of UK employees nor changes in the proportion of employees working UK colleagues. For the past three years, we have published our CEO pay ratio using the same outside the UK or employed under contracts for service. methodology as set out below. The remuneration policies and practices at HL are consistent across both our Executive Directors and Year Method Lower Quartile Median Upper quartile Change in median the wider workforce and are designed to promote the long-term success of the Company, promoting 2021 Option A 101:1 73:1 47:1 0% both high individual and team performance. The same considerations and criteria apply across a consistent framework during the assessment of performance and pay outcomes, noting that the 2020 Option A 103:1 73:1 47:1 N/A quantum of (risk based) variable pay is higher for the CEO than across the wider workforce. Notes to the calculations: Having overseen the application of performance and pay policies, and reviewed reports from the 1. The median, 25th and 75th percentile colleagues were determined based on calculating total annual remuneration up to andReward Governance Committee and Colleague Forum throughout the period, the Committee is including 30 June 2021. 2. Basic salary for part-time colleagues and new joiners within the calculation year have been converted into full-time annualisedsatisfied that our 2021 median pay ratio is consistent with the Company’s wider pay, reward and equivalent values for the purposes of the calculations. progression policies for our UK employees. 3. ‘Option A’ was chosen from the options available in the reporting regulations since it is the most robust and statistically accurate method. Relative importance of the spend on remuneration 4. Benefits are provided on the same terms to Executive Directors and all employees alike and as such are not included withinThe table below shows the actual expenditure of the Group in terms of total employee remuneration, the table above. The methodology used in these calculations is consistent with those in the single figure table, with the same approach being taken for 2020 and 2021 profit before tax, and total dividends for this and the previous year together with the percentage 5. Set out separately in the table below is the basic salary and total remuneration figures (including bonus) for each of thechange between the years. Profit before tax has been chosen as a metric in this instance to percentiles in each year: demonstrate the profits generated for shareholders and the relationship between this and the overall 6. 2020 calculations have been included to allow for a relative comparison of the 2021 outcomes to be evaluated. cost of employee remuneration. UK employee lower UK employee Year Pay element quartile UK employee Median upper quartile Total dividend paid Underlying profit Employee costs Total dividend declared £m before tax £m £m (pence per share) 2021 Basic salary 21,600 28,619 45,000 2021 263.5 366.0 119.8 50.5p Total remuneration 26,422 36,796 57,055 2020 203.3 339.51 101.2 54.9p 2020 Basic salary 22,433 28,888 44,940 % change +30% +7.8% +18.4% -8% Total remuneration 26,573 37,625 58,249 Note 7. 2020 calculations have been included to allow for a relative comparison of the 2021 outcomes to be evaluated. 1 Excludes the sale of Funds Library 108 Hargreaves Lansdown Report and Financial Statements 2021