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42
Directors’ remuneration report
The Remuneration Committee
Membership
The Committee consists entirely of independent non-executive directors.
During the year the Committee comprised the following non-executive
directors:
Chairman John Nelson
Committee members Daniel Bernard (appointed 3 June 2009)
Michael Hepher
Peter Jackson (retired 3 June 2009)
Janis Kong
Secretary Nick Folland
No member of the Committee has any personal fi nancial interest
(other than as a shareholder), confl icts of interests arising from crossdirectorships,
or day-to-day involvement in running the business. No
director plays a part in any discussion about his or her own remuneration.
Committee meetings are attended by the Group Chief Executive (other
than when his own remuneration is being discussed) who provides
advice that is of material assistance to the Committee. The Group
HR Director (until his retirement on 30 April 2009) and the Head of
Group Reward also attend Committee meetings and provide material
assistance and advice on remuneration policy, and the Group Finance
Director attended by invitation on matters relating to the performance
measures and targets for the Group’s incentive plans. The Legal and
Corporate Responsibility Director acted as Secretary to the Committee.
The Committee also has authority to obtain the advice of external
independent remuneration consultants and is solely responsible for their
appointment, retention and termination, and for approval of the basis of
their fees and other terms. In the year to 30 January 2010, the following
external advisers provided services to the Committee:
Hewitt New Bridge Street (HNBS)
Advice on the ongoing operation of employee and executive share plans
and executive remuneration generally.
Allen & Overy LLP
Legal advice on service and employment contracts and for other
employment and remuneration issues in relation to executive directors.
(They also provide advice to the Company on other legal matters).
Towers Watson
Advice on the wider review of remuneration policy and benchmarking
on the market competitiveness of remuneration for executives in the UK
and overseas. (They also provide advice to the Company on pensions
and related matters).
Kingfi sher plc
Annual Report
and Accounts
2009/10
Responsibilities
The Committee is committed to the principles of accountability
and transparency, and to ensuring that remuneration arrangements
demonstrate a clear link between reward and performance. Operating
under delegated authority from the Board, its activities are governed
by terms of reference which are available from the Group Company
Secretary and can be found on the Company’s website
www.kingfi sher.com.
The Committee’s primary purpose is to make recommendations to
the Board on the Company’s framework and broad policy for executive
remuneration and its costs. The Committee also has delegated
responsibility for determining the remuneration and benefi ts of executive
directors, the Chairman and certain senior executives. The remuneration
of non-executive directors is determined by the Chairman and executive
members of the Board.
Activities
The Committee is required by its terms of reference to meet at least
twice a year, and has a standing calendar of items within its remit. In
addition to these standing items, the Committee discusses matters
relating to the operation of the remuneration policy and emerging market
practices. In 2009/10 the Committee met seven times and agreed:
– the performance targets for the year and progress against those
targets;
– the operation of the long-term incentive plans and policy for executive
share scheme grants, including the level of individual grants and
performance conditions;
– the policy for the operation of the employee share schemes;
– the award of annual incentives based on the prior year’s performance;
and in particular the Committee:
– recommended the 2008/09 directors’ remuneration report for
approval by the directors;
– amended the scheme rules of the Store Management Incentive
Share Scheme 2008 for French employees to accommodate a more
favourable tax treatment for the plan under French legislation
(benefi tting both employer and employees);
– revised the contracts for members of the UK Kingfi sher Leadership
Group (KLG) to take account of regulatory changes, tightening the
wording relating to restrictive covenants and liability under directors’
and offi cers’ liability insurance;
– amended the KIS Share scheme rules to incorporate clawback
provisions relating to the vesting of deferred shares in situations
where, with hindsight, the grant of shares three years previously was
not justifi ed;
– agreed to amend the way in which awards under the KIS Share
scheme may be granted, by including the grant of an option under a
Company Share Option Plan which is subject to HMRC approval; and
– recommended to the directors the establishment of a Share Incentive
Plan, subject to shareholder and HMRC approval.