IMI plc annual report 2012

ENGINEERINGADVANTAGERemuneration Report1. The Remuneration Committee (continued)1.6 Terms of appointment of the Chairman and the non-executive directorsLetters of appointment set out the key duties and expectations for the non-executive Chairman and the independentnon-executive directors. They include appropriate time commitments, provisions for induction and familiarisation with thebusinesses and wider senior management team and require approval for other directorships and potential conflicts of interest.The dates and unexpired terms of the letters of appointment for the non-executive directors in office at 31 December 2012,which are available for inspection at the annual general meeting and at the Company’s registered office, are as follows:Unexpired term at 01.01.13Date of letter or date of letter of Date of appointmentof appointment appointment if later as a directorP Bentley 01.02.13 2 years 9 months 01.10.12C P Forster 01.02.13 2 years 9 months 01.10.12A M Frew 05.03.13 12 months 02.03.06T M Gateley 01.02.13 4 months 01.11.03B Nørgaard 01.02.13 2 years 10 months 06.11.12R Quarta 01.09.11 1 year 10 months 01.06.11R J Stack 01.02.13 1 year 5 months 13.06.08The normal period from initial appointment to first renewal is three years. After six years, renewal is usually considered onan annual basis. This applied to T M Gateley whose final term expires after the 2013 annual general meeting, to ensure hecontinues to be available as senior independent director to support the Chairman and A M Frew, whose term was put on anannual basis in March 2013. Appointments are made under a letter of agreement subject to removal under the Company’sarticles of association, and all directors will be submitting themselves for annual re-election at the annual general meetingin accordance with the new UK Corporate Governance Code. There are no provisions for the Company to give notice orpay compensation in relation to the early termination of the appointment of the Chairman or any non-executive director.There is a provision in the appointment letters to the effect that a non-executive director is normally expected to give at leastone month’s prior notice of termination to the Company and, in the case of the Chairman, three months’ notice.2. Executive Directors’ remuneration and terms of appointmentThis section of the Remuneration Report is not required to be audited.2.1 Statement of policyThe Company aims to ensure that remuneration generally, and incentives in particular, provide strong alignment betweenindividual performance, business performance and shareholder interests. The remuneration policy also recognises that theCompany operates in global and highly competitive markets with the vast majority of its activities outside the UK.The policy is to provide competitive remuneration packages to attract, motivate, reward and retain executives of the calibrerequired, and to align their interests with those of shareholders by relating a significant element of the remuneration packageto performance. During 2012 the committee reviewed the structure and metrics of the incentive arrangements for theexecutive directors from a risk perspective and concluded that they were aligned with an appropriate level of risk-taking andwith shareholders’ interests.The Remuneration Committee considers it to be important to maintain the flexibility to respond to individual circumstances.However, its normal approach has been to pay salaries within appropriate market competitive ranges, combined with realisticpotential for above-market total compensation if performance is outstanding.50 Board reports