Remuneration Committee summary
The main objectives of the Committee are to establish and maintain formal and transparent procedures for developing policy on executive remuneration to deliver the Company's strategy and value for shareholders; to agree, monitor and report on the remuneration of Executive Directors and senior executives; and to review wider workforce remuneration and other policies in line with the 2018 Corporate Governance Code.
In 2022, the objectives of the Committee are as follows:
- Determine the remuneration arrangements for the incoming Chief Executive
- Review the existing Remuneration Policy and submit the revised Policy for shareholder consideration at the 2023 Annual General Meeting
- Review wider workforce remuneration arrangements and take into account as part of the Remuneration Policy review
- Ensure there is an effective induction process for the new Remuneration Committee Chair
A key part of the Remuneration Committee's role is to ensure that the remuneration of Executive Directors and senior management is aligned to the Company's strategic objectives. It is, of course, key that the Company is able to attract and retain leaders who are focused and also appropriately incentivised to deliver the Company's strategic objectives within a framework which is aligned with the long term interests of the Company's shareholders.
This alignment is achieved through a combination of: deferral into shares of a percentage of the EIS; a two-year retention period for vested PSP awards; share ownership guidelines which require executives to build up holdings of Taylor Wimpey shares, either directly or by retaining vested PSP share awards and deferred EIS amounts; and also requiring shares to be retained by the Executive Directors after they have ceased employment.
The above requirements ensure that a significant percentage of the overall remuneration package of Executive Directors and senior management is subject to performance. With all packages for Executive Directors substantially geared towards meeting challenging targets set under the EIS and PSP, the Committee believes that the pay and benefits of its Executive Directors and senior management adequately balance reward and risk.
In line with best practice, the Committee ensures that the incentive structure for Executive Directors and senior management will not raise environmental, social or governance (ESG) risks by inadvertently motivating irresponsible behaviour. More generally, the Committee under its Terms of Reference may, where it considers appropriate, take ESG matters into account when considering the overall remuneration structure and as part of its overall discretion.