Annual Report for the year ended 31 December 2008

The Board has delegated to the Remuneration Committee the
determination of Executive Directors’ remuneration. The constitution and
operation of the Committee comply with the Best practice provisions on
Directors’ remuneration in the Combined Code.
This report has been prepared in accordance with the Companies Act
1985 as amended by the Directors’ Remuneration Report Regulations
2002, the listing Rules of the uK listing Authority and the Combined
Code. it describes how the Board has applied the principles of good
governance relating to Directors’ remuneration and where it does not
comply and why this is the case. The Directors’ Remuneration Report
will be submitted at the forthcoming Annual General Meeting for
approval.
members of the remuneration committee
The Remuneration Committee consists only of independent Nonexecutive
Directors. peter Gibbs took over the role as Chairman of
the Committee from lord Maclaurin of Knebworth Dl immediately
following the Annual General Meeting of the Company on 29 May
2008, and served as Chairman throughout the remainder of the year.
lord Maclaurin of Knebworth Dl remains on the Committee, whose
other members are Martin Gray, Nicholas irens and Mark Nicholls.
The Board considers that all members of the Committee are
independent within the meaning of the Combined Code as explained
in the Corporate Governance Report on pages 24 to 30. Details of the
number of meetings and each member’s attendance are set out in the
table on page 24.
The Terms of Reference for the Committee comply with the Combined
Code and are available for inspection at the Company’s registered office
and at the Annual General Meeting. A summary of these Terms is also
available on the Group’s website: www.evgplc.com.
advice
During the year, the Committee has received advice on executive
remuneration from its external remuneration advisors Deloitte llp
who were appointed by the Committee in september 2008. in addition,
it received advice from its lawyers, Jones Day, and internally from its
Human Resources Department. The remuneration consultants do not
have any other connection with the Group. No individual is involved in
the determination of his or her own remuneration.
remuneration policy
The Committee is responsible for ensuring that the Company’s Executive
Directors and senior executives are fairly, but responsibly rewarded for their
individual contributions to the Company’s overall performance. it exercises
this responsibility through consideration, of all bonus, salary and incentive
awards including reviews of the structure of remuneration within operating
subsidiaries. The Committee considers Executive Director recommendations
for senior executives whose bonus and incentive awards are wholly
discretionary. This typically will include non revenue earning areas of the
business including risk and compliance. The Committee also considers
ad hoc remuneration requests in line with its Terms of Reference
throughout the year. The Executive Directors are responsible for bringing
remuneration matters to the attention of the Remuneration Committee.
For all employees throughout the Group the overriding aim is to develop
and implement a remuneration policy which attracts, retains and
motivates individuals of the highest calibre to grow the value of the
Group and maximise returns to shareholders. The Committee takes the
view that the same philosophy that is applied to employees of the Group
generally should also apply to Executive Directors who are essential to
the effective and successful leadership and management of the Group.
The Group operates in the highly competitive market place of investment
banking and asset management, which places a heavy emphasis on
exceptional rewards for exceptional performance. An overriding objective
is to ensure that the approach to remuneration is simple and clear.
The Board does not support reward for executives when this is not
justified by performance.
All reward structures in place across the Group reflect our culture and
values of encouraging high individual effort to achieve individual and
corporate performance targets. We endeavour to ensure that our
businesses are conducted in a manner that achieves the highest
standards of compliance and we adopt a zero tolerance policy for
non compliance. This policy is reflected in our reward structure.
Consistent with this philosophy, the Group’s reward structure aims to
achieve the following:
• motivate executives in the short to medium-term while also linking
remuneration to the long-term performance of the Group;
• deliver fully market competitive levels of total compensation to
recognise personal performance as well as the individual’s
contribution to Group performance, judged on the basis of profit levels
and profit growth;
• support sustained growth in shareholder value over the medium and
long-term by aligning the interests of Executive Directors with those
of shareholders through performance related awards reflecting the
performance of the Group;
• provide long-term incentive opportunity that acts as a retention
mechanism;
• to ensure that remuneration does not encourage excessive risk taking
by aligning rewards to the delivery of sound risk management systems
and controls; and
• deliver proportionate rewards to Executive Directors having regard to
remuneration arrangements of senior Group employees.
We have made very good progress
WiTh The inTegraTion and developmenT
of each of our businesses.
direcTors' remuneraTion reporT
for The year ended 31 december
31