Strategic report Governance Financial statements Other information DIRECTORS’ REMUNERATION POLICY (SUMMARY) CONTINUED Component / purpose and link to strategy Operation and performance measures Maximum opportunity Annual Performance Bonus The level of annual performance bonus payable is linked to key financial and non-financial metrics as well as The maximum bonus opportunity for Directors under Rewards achievement of the Group’s business plan, key corporate and individual performance against objectives. the current policy is as follows: performance indicators and the personal contribution of Directors. The on-target bonus for each Director as a percentage of base salary will be disclosed in advance in the annual • CEO: four times base salary. report on remuneration for each year. The on-target award level for the CEO will be reduced to 50% of the Aligns the interests of Directors with those maximum opportunity over the life of this policy. • CFO: three and a half times base salary. of shareholders. For each performance element of the bonus, 25% of the maximum opportunity will be paid for the attainment of threshold performance. Performance will be assessed against a combination of financial/growth, non-financial and individual performance measures with at least a 50% weighting allocated to financial/growth measures, and no more than 20% allocated to individual performance. In assessing the overall performance outcome, the Remuneration Committee will use its judgement to consider: • The extent to which market movements, investor sentiment, interest rates and regulation, all of which are beyond the control of the Directors, have impacted the performance. This may result in either reductions or increases in the awards that would otherwise have been granted; • The extent to which management has operated within the agreed risk parameters; and • The extent to which the bonus outcome reflects the overall performance of the business, including in the context of the shareholder experience. A minimum of 40% of the Annual Performance Bonus is subject to compulsory deferral over three years. Where required by regulation, deferral will be increased to ensure compliance with regulatory deferral levels for all variable pay. Awards will be delivered in an appropriate combination of cash and shares, in line with prevailing regulatory requirements, with a minimum of 50% delivered through HL plc shares. The combination of cash and shares will be determined each year by the Committee. Vesting will occur over a period of three years. Vested shares will be subject to a further retention period as required under regulation. Subject to regulatory requirements, dividend alternatives will accrue on deferred awards up to the vesting date and will be paid as soon as practical after exercise of the award. Awards are subject to a formal malus mechanism until vesting. Awards are subject to clawback until the later of three years from the date of award or the end of any post vesting retention period. Further details of malus and clawback provisions are set out on page 81 of the 2020 Report and Financial Statements. 93 Hargreaves Lansdown Report and Financial Statements 2021