Report & Accounts - JLT

Remuneration ReportRemuneration Report32Jardine Lloyd Thompson Group plc Annual Report & Accounts 2005Remuneration CommitteeThe Remuneration Committee comprises six nonexecutivedirectors: Geoffrey Howe (Chairman), RodneyLeach, Chris Keljik, Simon Keswick, Nick MacAndrew andBob Scott.The terms of reference of the Committee are available onthe Group’s website. In summary, the overall purpose ofthe Committee is:a) To determine the Company's policy on the executivedirectors' remuneration and to approve specificremuneration packages for each of the executivedirectors, other members of the Group ExecutiveCommittee and any other direct reports of theChief Executive;b) To determine the overall remuneration policy in relationto the senior management of the Group inconsultation with the Chief Executive;c) To authorise awards under the Group's Sharesave,share option and share based incentive schemes,subject to any shareholder approval that may berequired.The Committee is directly accountable to shareholdersand the Chairman of the Committee will attend theAnnual General Meeting and will be available to answershareholders’ questions regarding remuneration.The Committee met six times in 2005 and the attendanceof the committee members is shown in the table onpage 27.New Bridge Street Consultants LLP acted as independentadvisers to the Committee during the year, providinginformation and assistance. In addition Mr K A Carter(Chairman) and Mr D J Burke (Chief Executive) bothprovided advice that materially assisted the RemunerationCommittee, neither in relation to his own remuneration.Remuneration policyThe Group operates in a highly competitive sector andits policy on the remuneration of executive directors is toprovide terms and conditions which enable it to recruit,retain and motivate individuals of sufficient expertise andcommitment to further the success of the Group.The Committee reviewed the remuneration structure forthese individuals in detail during the year to ensure that itwas adequate to satisfy the policy.A substantial proportion of directors’ remuneration islinked to the Company’s performance with Group ProfitBefore Tax (“PBT”) determining a significant proportion ofthe annual bonus and the Group’s Earnings Per Share(“EPS”) performance determining the vesting of long-termincentive awards.The Company’s policy in relation to share incentiveschemes is to provide the necessary mechanisms forits employees and executive directors to participate inthe long-term success of the Group by schemes whichcan be operated both in the UK and in overseasjurisdictions where local legislation permits. The operationof these schemes is seen by the Board as an essentialtool in aligning the interests of key staff with those ofthe shareholders. These are summarised on pages 33and 36.Directors’ remunerationThe various elements of the remuneration package ofexecutive directors are set out below and in the table onpage 36.Basic salaryBasic salaries and benefits are reviewed annually.In considering appropriate levels of remuneration theCommittee considers available remuneration data relevantto UK public companies and also companies in the samebusiness sector (in the UK and elsewhere) and has givenfull consideration to the Combined Code provisions ondirectors’ remuneration.Performance related remunerationAnnual bonusDuring the year, the Committee reviewed its policy onbonus payments to ensure that bonus payments areappropriately linked to Group, business group andindividual performance, and to enable the Company todeliver remuneration packages which are competitive inthe market, particularly in the insurance industry, andretain and incentivise key executives.