annual report 2007 - the Admiral Group plc

30 REMUNERATION REPORTRemuneration reportScope of reportThe remuneration report summarises the Group’s remuneration policy and particularly itsapplication with respect to the Directors. The report also describes how the Group applies theprinciples of good corporate governance in relation to Directors’ remuneration in accordancewith the Combined Code and Directors Remuneration Report Regulations 2002.Remuneration CommitteeThe Committee is appointed by the Board and comprises only Non-executive Directors. TheCommittee is chaired by John Sussens, the Senior Independent Non-executive Director, with theother members being Martin Jackson and Margaret Johnson. The Chairman and Chief Executiveare invited to meetings where the Committee considers it appropriate to obtain their advice onthe matters under review. During the year ended 31 December 2007, the Committee met onfive separate occasions. Its remit includes recommending the remuneration of the Chairman,the Executive Directors, and the Company Secretary; review of the remuneration of seniormanagement; review of the awards made under the performance related incentive schemes.The Committee’s terms of reference, which are reviewed at least annually and approved by theBoard, are available on the Group’s corporate website and are summarised in the CorporateGovernance Report.The members of the Committee do not have any personal financial interests or any conflictsfrom cross-directorships that relate to the business of the Committee. The members do nothave any day-to-day involvement in the running of the Group.During the year the Committee did not purchase any consultancy services but the CompanySecretary circulates market survey results as appropriate.Remuneration policyThe Group is committed to the primary objective of maximising shareholder value over time.The Committee reviews the framework and remuneration packages of the Executive Directorsand the most senior managers. The main principles underlying the remuneration policy are:· Competitive – The Group pays below-median salaries but with attractive incentives whichprovide opportunity for highly competitive total reward packages for superior performance.· Performance linked – A significant part of Executive Directors’ and senior managers’ reward isdetermined by the Group’s earnings growth. Failure to achieve threshold levels of growth inthe Group’s earnings results in reduced or no payout under the Group’s Long-term incentiveplan.· Shareholder aligned – A considerable part of the reward is related to the growth in earningsversus LIBOR. Executive Directors have agreed to retain a minimum shareholding equal toat least 100% of base salary which can be built up over a period of five years from the date ofappointment.· Transparent – All aspects of the remuneration structure are clear to employees and openlycommunicated.· Death in Service scheme, paying three times salary available to all employees followingcompletion of their probationary period.· Group Personal Pension Plan, matching employee contributions up to a maximum 6% of basesalary with a total annual cap of £4,800. Available to all employees with one year’s service.· Private Medical Cover, available to approximately 100 management level staff.· Permanent Health Insurance policy covering the same staff who are eligible for PrivateMedical Cover.