The Remuneration Committee (the Committee) is a committee of the Board of Directors of Renold Plc (the Board), from which it derives its authority and to which it regularly reports.
1. Membership
1.1 Members of the Remuneration Committee will be appointed by the Board on the recommendation of the Nomination Committee and in consultation with the Chair of the Remuneration Committee. The Remuneration Committee will be made up of the Chair and at least two other members, each of which will be independent Non-Executive Directors. The Chair of the Board may also serve on the Committee as an additional member if considered to be independent. The Committee Chair and members shall be listed each year in the Company's annual report.
1.2 Only members of the Remuneration Committee have the right to attend Remuneration Committee meetings. However, other individuals such as the Chief Executive, Group Human Resources Director and external advisers may be invited to attend for all or part of any meeting as and when appropriate and necessary, provided that no individual shall be present for any decision relating to their own remuneration and / or reward arrangements.
1.3 The Board will appoint the Remuneration Committee Chair who will be an independent Non-Executive Director. In the absence of the Remuneration Committee Chair and/or an appointed deputy, the remaining members present will elect one of themselves to chair the meeting, such person being a member who would qualify under these Terms of Reference to be appointed to that position by the Board. The Chair of the Board will not be Chair of the Remuneration Committee.
1.4 Appointments to the Remuneration Committee will be for a 12 month rolling period subject to the re-election of the member at the Annual General meeting and provided that the member still meets the criteria for membership of the Remuneration Committee and that the majority of the Remuneration Committee members remain independent.
2. Secretary
2.1 The Company Secretary or an appropriate nominee will act as the Secretary of the Remuneration Committee and will ensure that the Committee receives information and papers in a timely manner to enable full and proper consideration be given to the issues.
3. Quorum
4. Frequency of Meetings
5. Notice of Meetings
5.1 Meetings of the Remuneration Committee will be called by the Secretary of the Remuneration Committee at the request of the Committee Chair or any of its members.
5.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, will be forwarded to each member of the Remuneration Committee, any other person required to attend and all other Non-Executive Directors, in good time ,in advance of the date of the meeting. Supporting papers will be sent to Remuneration Committee members and to other attendees as appropriate, at the same time.
6. Minutes of Meetings
6.1 The Secretary of the Remuneration Committee will minute the proceedings and resolutions of all Remuneration Committee meetings, including the names of those present and in attendance.
6.2 Draft minutes of Remuneration Committee meetings will be circulated promptly to the Chair and once agreed, to all members of the Board and the Company Secretary unless, exceptionally, it would be inappropriate to do so.
7. Annual General Meeting
7.1 The Chair of the Remuneration Committee will attend the Annual General Meeting and be prepared to respond to any shareholder questions on the Remuneration Committee's activities. In addition, the Committee Chair should seek engagement with shareholders on significant matters related to the Committee’s areas of responsibility.
8. Duties
a) Have responsibility for setting the remuneration policy and setting remuneration for the Chair of the Board and Executive Directors;
b) The remuneration of the Non-Executive Directors will be a matter for the Chair of the Board and the Executive Directors. No Director will be involved in any decisions as to their own remuneration;
c) Ensure that remuneration policies and practices for executive remuneration are aligned to Company purpose and values, clearly linked to the successful delivery of the company’s long-term strategy, and that enable the use of discretion to override formulaic outcomes and to recover and/or withhold sums or share awards under appropriate specified circumstances;
d) Review and approve the grant of Performance Share Awards and their testing and vesting for the Executive Directors and Executive Management. At their discretion, the Committee may monitor and advise on the structure of remuneration for Executive Management, including pay, pension, annual bonus incentive and other benefits;
e) Determine remuneration policy, take into account all factors which it deems necessary including relevant legal and regulatory requirements, the provisions and recommendations of the Quoted Companies Alliance (QCA) Corporate Governance Code (QCA Code) and associated guidance. The objective of such policy will be to;
f) Attract, retain and motivate executive management of the quality required to run the Company successfully without paying more than is necessary and having regard to the views of shareholders and stakeholders;
g) Ensure a close alignment of executive pay to the Company’s Strategic Objectives and performance;
h) The remuneration policy should have regard to the risk appetite of the Company and ensure reward remains closely aligned with the Company’s Strategic Objectives and our shareholders’ interests, while continuing to motivate and engage the team leading the Company to achieve stretching targets. A significant proportion of remuneration should be structured so as to link rewards to corporate and individual performance and designed to promote the long term success of the Company;
i) when setting remuneration policy for Executive Directors, review and have regard to changes in broader workforce remuneration and remuneration payable in similar companies;
j) Review the ongoing appropriateness and relevance of the remuneration policy;
k) Approve the design of and determine targets for any performance related bonus schemes offered to Executive Directors operated by the Company and approve the total annual payments made under such schemes;
l) Review the design of all share incentive plans for approval by the Board and shareholders. For any such plans, determine each year what performance conditions will be set whether any awards will be made, and if so, the overall amount of such awards, including the individual awards to Executive Directors and other designated senior management;
m) Determine the policy for, and scope of, pension arrangements for each Executive Director;
n) Ensure that Executive Directors' contractual terms on termination, and any payments made to Executive Directors are fair to the individual and the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;
o) Within the terms of the agreed policy and in consultation with the Chair of the Board and/or Chief Executive as appropriate, determine the total individual remuneration package of each Executive Director and the Chair of the Board including bonuses, incentive payments and share options or other share awards. The choice of financial, non-financial and strategic measures is important, as is the exercise of independent judgement and discretion when determining remuneration awards, taking account of company and individual performance, and wider circumstances;
p) Oversee any major changes in employee benefit structures throughout the Company or the Group;
q) Agree the policy for authorising claims for expenses from the Directors;
r) Be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the scope of work for remuneration consultants who advise the Remuneration Committee in respect of the advice provided solely to the Remuneration Committee;
s) Obtain reliable, up to date information about remuneration in other companies of comparable scale and complexity. To help it fulfil its obligations the Committee shall have full authority to appoint remuneration consultants and to commission or purchase any reports, surveys or information which it deems necessary at the expense of the Company; the Committee should avoid designing pay structures based solely on benchmarking to the market or on the advice of remuneration consultants;
t) work and liaise as necessary with all other Board Committees ensuring the interaction between Committees and with the Board is reviewed regularly;
9. Reporting Responsibilities
9.1 The Remuneration Committee Chair will report to the Board after each meeting on the nature and content of its discussion, recommendations and action to be taken.
9.2 The Remuneration Committee will make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed and adequate time should be available for Board discussion when necessary
9.3 The Remuneration Committee will ensure that provisions regarding disclosure of information on remuneration, including pensions, as required by relevant legislation, listing rules and the QCA Code are fulfilled and produce a report of the Company's remuneration policy and practices to be included in the Company's annual report. If the Committee has appointed remuneration consultants, the remuneration report of the Company should identify such consultants and state whether they have any other connection with the Company.
9.4 The Remuneration Committee will ensure that the Company maintains contact as required with its principal shareholders about remuneration.
10. Other Matters
a) have access to sufficient resources in order to carry out its duties, including access to the Company Secretary as required;
b) be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members;
c) give due consideration to laws, regulations and published guidelines or recommendations regarding the remuneration of company directors and the formation and operation of share incentive plans, the requirements of the FCA’s Disclosure Guidance and Transparency Rules ,the QCA Code , and any other applicable rules, as appropriate;
d) at least once a year, review its own performance, constitution and Terms of Reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval; and
e) the Committee will make available these Terms of Reference to shareholders and include the information on the company’s website.
11. Authority
11.1 The Remuneration Committee is authorised by the Board to obtain, at the Company's expense, outside legal or other professional advice on any matters within its terms of reference.
In these Terms of Reference:
Executive Management will mean those employees in the first layer of management below Board level;
Group will mean the Company and its subsidiaries and subsidiary undertakings from time to time.
Approved and adopted by the Board on 10 March 2022
