Strategic report Governance Financial statements Other information DIRECTORS’ REMUNERATION POLICY (SUMMARY) CONTINUED In accordance with the Company’s Articles of Association, account when setting the policy for plc executive director • Risk – The remuneration framework has been designed to the maximum aggregate remuneration for the Non-Executive remuneration. The policy is determined with due regard to the mitigate risk where approriate. The Committee reviewsp Directors is £1,500,000 per annum. This limit will be reviewed by interests of the Company, the shareholders and the Group, with adherence to the Group’s risk parameters as part of its the Board from time to time to ensure that it remains appropriate. the objective of being able to attract, retain and motivate executive determination of variable pay outcomes and malus and clawback External Board appointments management of the quality required to run the Group successfully provisions apply to both the annual bonus and SPP award. In the The Company recognises that external Non-Executive without paying more than is necessary. current policy, these provisions have been enhanced to include Directorships are beneficial to both the Director and the Company The performance measurement of the Executive Directors and corporate failure. and that its Executive Directors may be invited to become Non- key members of senior management and the determination of • Predictability – In the Report and Financial Statements, Executive Directors of other companies. Such non-executive duties their annual remuneration packages is also undertaken by the the potential value of the Executive Directors’ remuneration can broaden experience and knowledge which can benefit the Committee. For individuals below the Executive Committee, there packages at threshold, target and maximum scenarios (plus with Company. Subject to approval by the Board, Executive Directors are is a sub-committee (the Reward Governance Committee) for the 50% share price appreciation) have been provided. In addition, allowed to accept two non-executive appointments (limited to one review of remuneration structures and outcomes consisting of the Policy also states the maximum annual bonus and SPP in the FTSE100) and retain the fees received, provided that the the Chief Executive Officer, Chief Financial Officer, Chief People opportunity as a percentage of salary. appointment is not likely to lead to conflicts of interest. Officer and Group Chief Risk Officer, which reports and refers Proportionality – The Committee strongly believes that decisions to the Committee for final approval where relevant. • Annual Report on Remuneration poor performance should not be rewarded. The annual bonus This report has been prepared in accordance with the provisions The Committee also ensures that the remuneration relationship requires performance against stretching measures and the SPP of the Companies Act 2006 and the Large and Medium-Sized between the Executive Directors and senior employees of the award has a robust underpin. The underpin measures both Companies and Groups Regulations 2013, as amended. It also Group is appropriate and that the Remuneration Policy complies financial and non-financial performance, reflecting the Group’s meets the requirements of the UK Listing Authority’s Listing Rules with the relevant FCA Remuneration Codes. Any exceptional strategic priorities. and the Disclosure and Transparency Rules. The Remuneration remuneration arrangements for senior employees are approved Alignment to culture – The remunerationframework has been Committee confirms throughout the financial year that the by or advised to the Committee. • Company has complied with these governance rules and best designed to support both the Group’s culture, purpose and practice provisions. UK Corporate Governance Code values. The performance measures and underpins of the When considering the policy, the Committee was mindful of the variable pay awards have been chosen to drive desired Role of the Remuneration Committee UK Corporate Governance Code and believes that the executive behaviours the HL Way and are aligned to the strategy of The Board remains ultimately accountable for executive remuneration framework addresses the following principles: the business. remuneration but has delegated this responsibility to the Clarity – The Committee believes that the remuneration Remuneration Committee. • framework should be clear and transparent. The annual report The Remuneration Committee is therefore responsible for has enhanced disclosure on variable pay and the performance determining the Remuneration Policy for the remuneration of measures for the annual bonus have been simplified, with the Executive Directors of the Company and of the subsidiary attached weightings for each measure being disclosed companies, the Chair, other members of executive management going forward. and all other employees who are deemed to be Material Risk Simplicity – The remuneration arrangements for Executive Takers. The Committee shall also review workforce remuneration • and related policies, and the alignment of incentives and rewards Directors are well understood by both participants and with the Group’s culture and defined behaviours, taking these into shareholders. The structure consists of fixed pay, annual bonus award (including deferral) and the SPP (restricted share award). 97 Hargreaves Lansdown Report and Financial Statements 2021