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 individual Directors and senior executives; and to review wider workforce remuneration practices and policies.
During 2020, the Committee:
- Implemented the revised Policy following shareholder approval at the 2020 AGM
- Applied discretion to the application of the Policy during 2020 in light of the COVID-19 pandemic
- Reviewed the wider workforce remuneration in light of the COVID-19 pandemic
In 2021, the objectives of the Committee are as follows:
- Ensure that the Policy is applied appropriately, and if necessary flexibly, to ensure continued alignment between the remuneration outcomes for Executive Directors and the experience of other stakeholders
- Review the remuneration positioning for the Group Finance Director
- Continue to review the performance measures for the EIS and PSP to ensure there is a rounded assessment of financial and non-financial performance aligned to the business strategy and a strong continued alignment of interest with all stakeholders
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.