POL00362331
POL00362331
POST OFFICE LIMITED
(“the Company”)
Terms of Reference of the Remuneration Committee
(Style Definition: Footnote Text )
The Remuneration Committee (the "Committee”) is a Committee of the Company
Board ("the Board”) from which it derives its authority and to which it reports
after each meeting. Its authority is always subject to the powers and duties of
the Board, as set out in the Articles of Association.
A PURPOSE
1. The purpose of the Committee is to:
Cases
Determine and ensure, that appropriate Group Remuneration (Formatted: Font: Not Bold i}
‘Strategiesremuneration policies are in place for the Company and its
subsidiaries*-designed_taking into account all factors the Committee
deems necessary including relevant legal and _requlatory
ire n hi rovision: of _thi
requirements, the provisions and recommendations _of the UK
Corporate Governance Code 2018 and associated guidance. The
objective of such policy shall be to attract, retain and motivate the
executive management and-werkforceof the quality required to run
the Company and Group subsidiaries successfully? without paying
more than is necessary—andtinking—incentives, having regard to
views of the shareholder and other stakeholders;
cin Design remuneration policies and practices to support strategy and
promote long-term ___sustainable success, __with _ executive
remuneration aligned to Company purpose and values, clearly linked
to the successful delivery of the Company's
valuesiong term strategy, and that enable the use of discretion to
override formulaic outcomes and to recover and/ or withhold sums
under appropriate specified circumstances;
Approve for recommendation to the Shareholder the remuneration
for Executive Directors and the fees for Non-Executive Directors for
the Company, inehidingthe-—Chairaside from the Chair where the
Shareholder will_advise_the remuneration for the Chair _as
determin: ‘he Sharehol
iv. Approve the remuneration packages of individuals who report
re -members of _ Group paleLExeciitve prea atte
pany;
and fees for Non-Executive Directors the Company" S subsidiaries;
Approve of the introduction of any long and/or short term incentive
scheme (LTIP/STIP), the associated performance criteria and any
awards made under such schemes by any Group Company:
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4
Fequirements;-the-risk appetite of the-Company-and alignment to its-long-term-strategic-goals, structuring of a
tometer te Coe : OD rerrtien Fo }
for
‘Services Limited (Post Office Insurance) and Payzone Bill Payments Limited, —[ Formatted: Font: 10 pt, English (United States) }
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Post Office Limited
Terms of Reference of the Remuneration Committee
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numbering
B. DUTIES AND RESPONSIBILITIES
Remuneration Policy for the Company: Executive
2. Approve for recommendation to the Board the remuneration policy for
the Group Chief Executive Officer,executive directorsDirectors and those
executivesindividuals who report directly toare members of the Group Chief
Executive Officer, taldng th policy ch
d-linking_incentives_to_the_C ie ie d
ploy g pany 7
values.
Remuneration Package: Executive Directors, Members of the Group
Executive, Group boards
4:3._Approve fer-recommendation-te-the-Sharehelder-the remuneration
package and terms and conditions of employment ferincluding any
variations thereof for proposed Executive Director, Group Executive
includin any interim — appointments;
Nominations-Committee*, to the Group Executive), and Subsidiary board
appointments (excluding Group board appointments which are in addition
to_an_executive’s primary role and where no additional remuneration
applies). This may include, but shall not be restricted
Base salary
Short term incentive (annual bonus)
Long Term Incentive Plan
Pension Provision
Benefi by Hh i Heniie-Relia
PI 7
Contractual terms such as notice periods.
The recommendations shall align with the Group Remuneration Policy
approved by the Board.
+ I Formatted: indent: Left: 1.25 cm, No bullets or
numbering
he Remuneration-Package:Direet-repertsCommittee must make a
recommendation, to the Greup-Chief Executive-Officer
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Terms of Reference of the Remuneration Committee
6. AppreveShareholder and Shareholder approval is required in + Formatted: Left, indent: Left: 1.25 em, Right. O.cm,
respect of, the remuneration packagepackages for direct reports to the Line spacir lultiple 1.15 li, No bullets or numbering
Group Chief Executive, This may include, but shall not_be restricted ~~[Formatted: Font: Not Bold i]
is
to:Executive Directors.
The Committee must make a recommendation to the Shareholder and
Shareholder approval is required in respect of the proposed remuneration
of any person who is a director of a Subsidiary Company who is not an
employee of a member of the Group (unless that company is regulated by
the FCA).
Review the contractual terms applicable to Executive Directors such that
payments adhere to the Group Remuneration Policy approved by the
Board-; public sector pay and terms guidance (subject to any modifications
agreed in the Shareholder Framework document); and HMT Senior Pay
Guidance (a requirement for all public corporations).
Review each element of the remuneration package and total «J Formatted: Normal, indent: Left: 0 cm, Hanging: 1.25
remuneration for new hires and any internal promotions and appointments «em, Space After: 6 pt,_No bullets or numbering
which are proposed to carry a salary in excess of the lowest salary of any
executive whe—reperts-_directly_teindividual member of the Group Chief
Executive-Officer.
Review annually the overall total remuneration of the Senior Group
(defined as the- Group-Chief Executive Officer executive directorsDirectors,
members of the Group Executive, and these-executives-whe-repert directly
roup Chief Executive Officerboard appointments) compared both
with external market comparators and with the remuneration of other
employees in the Group.
Long Term Incentive Plan (LTIP)
7._Approve the implementationproposed design of, or changes to long-term
performance related incentive schemes for the Executive Directors*;
executives-who-report-direetly-te, members of the Group Chief-Executive
‘Officer-and senior managers eligible to be invited to participate in the
Company’s LTIP. Executive Director LTIP arrangements must be approved
by the Shareholder.
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Terms of Reference of the Remuneration Committee
9.8.__Review annually the performance related incentive schemes for the
Executive Directors, executives-who—report—directlytomembers of the
Group Chief Executive Officer and senior managers eligible to be invited to
participate in the Company's LTIP.
E} Approve for recommendation to BEIS, UKGI and HMT Officials the final
outturn amounts for performance related LTIP for the Executive Directors,
for confirmation that final outturns are aligned with Shareholder approvals
on award quantum, structure and metrics (other than where previously
advised that amendment had been made), and that there is no breach of
Managing Public Money requirements.
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Short Term Incentive Plan (STIP) : Normal, Justified, Right: 0.17 cm, Space I
10. Approve the criteria for, and the outturn against agreed Plan targets of, [ee O pt Tab stops: 1.75 cm, Left
short-term performance related pay arrangements for Executive Directors®
and the-executives-who-report-directly_tomembers of the Group Chief
Executive Officer. Executive Director STIP arrangements must be approved
by the Shareholder although outturn approval is not required unless
metrics have changed during the Plan year.
14. Review annually the criteria for, and outturn against agreed Plan of, short-
term performance related pay arrangements for Executive Directors? and
. ho—report—directly—tomembers of the Group Chief
ExecutiveExecutive. Executive Director STIP arrangements outturn unless
metrics have changed during the Plan year must be approved by the
Shareholder.
12. Receive information on the total outturn of performance related pay
arrangements across the business for information.
13. Approve the outturn for the STIP/LTIP for Executive Directors and onl:
where award quantum, structure and metrics have changed will a
recommendation be prepared for the Shareholder to approve.
Exit Packages
43,_Appreve-forre endati he-Sharehelder-of any-exit package
hi id ae 1 aiiinabane et hief
Executive and Chief Financial Officer,
44-—Approve the exit package for any individual with a salary above the lowest
salary of those-executives-who-report-directly-tothe members of the Group
Chief Executive®, where the exit package would be in excess of contractual
obligations.
Pensions
6
Bs SH by the
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Terms of Reference of the Remuneration Committee
15._Appreve—for_recemmendation—te Where any exit package for an
Executive Director is in excess of the contractual obligations of the
Executive Director, the Beard—exit_package must_be approved by the —{ Formatted: Font: Not Bold )
AabllsHnGRer Pee ie=selablien
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Pp any ip
46-144 Formatted: Space After: 10 pt, Don't add space
ee ee = soe siehcces between paragraphs of the same style, Line spacing:
particular affecting the rate of contributh quired to- be madeCommittee single
for recommendation to the Shareholder.
Remuneration Policy for the Company: Non-Executive Directors
47:15.Approve for recommendation to the Shareholder the fees for Non-
Executive Directors of the Company to the Board, includingthe-Chairaside
from the Chair where the Shareholder will advise the remuneration for the
Chair as determined by the Shareholder.
a I Formatted: indent: Left: 1.25 em, No bullets or }
numbering
a igi iP Ye a
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additional remuneration-applies-
Ft ie ae ed.
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Post Office Limited
Terms of Reference of the Remuneration Committee
21.—Review annually the overall total remuneration of the Senior Group
cetvied y bers-of-the-Subsidiary_Beard pared_both with
serial ket e vd with —th tion of oth
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employees-in-the Group;
r Jai: atten Noe Bisteatatrs i Z .
Directors?
22.—_Appreveth f Jewithin-which-the ‘ AN
E i Pe colegio ;
phiegts fer Byte A i ee
PP ¥ =
23,_-Review Hy-th tion-f 4c for- Non-Executive fees-f
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Engagement
24-16,.Review workforce engagement measures, such as engagement surveys,
and outputs from these., and take these outputs into account when
determining Group remuneration policies and remuneration packages.
25-17.Review feedback from the Senior Independent Director on employee
views and take this feedback into account when determining Group
remuneration policies and remuneration packages.
ca REPORTING RESPONSIBILITIES
26-18.The Committee Chair shall report to the Board after each meeting on the
nature and content of its discussion, recommendations and action to be
taken.
27.19.Report to the Board whatever recommendations it deems appropriate on
any area within its remit where action or improvement is needed, and
adequate time should be available for Board discussion when necessary.
28.20.Report on its activities in the Company’s annual report and should
describe the work of the Committee. in line with the requirements of the
UK Corporate Governance Code.
29.21.Identify in the annual report any consultants appointed as remuneration
consultants, alongside a statement about any other connection it has with
the Company or individual directors.
D. AUTHORITY
'8-Section 7.3 of the Framework document. Non-Executive Directors may be appointed for Post Office:
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Terms of Reference of the Remuneration Committee
30.22.The Committee is authorised by the Board to obtain, at the Company's
expense, outside legal or other professional advice on any matters within
its terms of reference.
34.23. The Committee shall be authorised to seek any information it requires from
any employee of the Company in order to perform its duties.
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24. The Committee shall have full authority to appoint remuneration Space After: 10 pt, Line spacing: Multiple 1.15 li, Tab
consultants and to commission or purchase any reports, surveys or stops: Not at_1.25 cm
information which it deems necessary at the expense of the Company.
However, the Committee should avoid designing pay structures based
solely on benchmarking to the market or on the advice of remuneration
consultant:
E. I COMPOSITION AND GOVERNANCE
Membership
32.25.The Committee Chair** and members of the Committee will be appointed
by the Board, acting on the recommendation of the Nominations
Committee and in consultation with the Chair of the Remuneration
Committee_and shall inted for i inciding with their
of appointment as directors of the Company, which may be extended for
an_additional three-year period, provided the director still meets the
criteria for membership of the Committee and is otherwise approved for
re-appointment as a director of the Company.
26. The Committee Chair shall be an independent Non-Executive Director who
should have served on a remuneration committee for at least 12 month:
27. The Committee Chair should seek engagement with the Shareholder on
significant matters related to the Committee's areas of responsibility.
33-28.In the absence of the Committee Chair at any meeting, the Committee
members present shall determine who shall chair the Committee.
34,29.tThe Committee shall consist of at least two independent Non-Executive
rectors. If considered independent at the time of appointment, the
ChairmanChair of the Company may be a member of the Committee, but
shall not chair it.
35,30.Only Non-Executive Directors shall be eligible to be members of the
Committee, such that no individual shall be involved in determining their
own remuneration.
#4 The UK Cor Code 2018, stipulates that Chairs should h
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Terms of Reference of the Remuneration Committee
Quorum
36.31.Quorum shall be two members. In-the-absence-of the-Chair—at-any
tage bi halt-d i
eee sell cba
G7 pi
the meeting.
Committee Secretary
37,32.The Group Company Secretary, or his or her nominee, shall act as
Secretary to the Committee and shall attend all meetings to keep minutes
and record actions.
Frequency
38-33. The Committee shall meet as often as required but at least three times per
year.
Governance
39.34.Meetings may be held in person or by telephone or other electronic means,
so long as all participants can contribute to the meeting simultaneously.
40.35.Notice of each meeting shall be given to all those entitled to participate at
least three working days before the meeting.
44:36.Meetings for the Committee may be convened by the Secretary in
consultation with the Chair, or by any member of the Committee, at any
time. The Secretary will be responsible for setting the venue date and time
of meetings in conjunction with the Chair. All papers supporting the
meeting will be issued in good time, one week in advance of the meeting
date.
42.37.The Chair will report regularly to the Board. Minutes of each Committee
meeting will be circulated to all members of the Committee and, once
agreed, to those members of the Board who have no personal interest in
the matters discussed. Where a conflict of interest exists, the Company
Secretary will provide sufficient information to the full Board to provide an
understanding of the matter(s) considered.
43.38. The Secretary shall provide current and new Committee members with any
training, briefings or induction required under the supervision of the Chair.
44,39.0nly members of the Committee have the right to attend Committee
meetings. The Group Chief Executive-and, the Group Chief People Officer
(or the holder of any equivalent position}), Group Reward Director, and
external advisers shall be informed of the date of each meeting and may
be invited by the Chair to attend all or part of any meeting, as and when
appropriate.
45.40. The Committee shall have access to sufficient executive time and resources
in order to carry on its duties, including access to the Company Secretary
and members of the People/ Human Resources team.
46.41.The Committee shall be exclusively responsible for establishing the
selection criteria, selecting, appointing and setting terms of reference of
remuneration consultants and have authority to appoint remuneration
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Post Office Limited
Terms of Reference of the Remuneration Committee
consultants and to obtain, at the Company's expense, legal or other
professional advice on matters within its terms of reference as required,
up to a financial limit determined by the Board.
47-42.1f there should be disagreement between the Remuneration Committee
and the full Board, the ChairmanChair of the Board shall make time
available for discussion of the issue so that the matter may be resolved.
Where any such disagreement cannot be resolved, the Remuneration
Committee shall report the issue as part of any annual report on its
activities required by the Shareholder.
F. ANNUAL REVIEW AND APPROVAL
48.43. The Committee will undertake an annual review of its performance and the
Terms of Reference. The outcome of these review will be recommended to
the Board for approval (notwithstanding amendments approved by the
Committee whenever so required).
‘Approved by: Date: Version: I Effective from:
Post Office Limited Board 25/03/2015 11 25/03/2015
Post Office Limited Board 25/11/2015 12 25/11/2015,
Post Office Limited Board 30/10/2018 13 30/10/2018
Post Office Limited Board 20/07/2019 14 30/07/2019
Post Office Limited Board (08/04/2020 2.0 (09/04/2020
Post Office Limited Board (03/06/2021 2.0 04/06/2021
(ro charges)
Post Office Limited Board (06/12/2022 3.0 7/12/2022
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