POL00363152
POL00363152
POST OFFICE LIMITED
(“the Company”)
Terms of Reference of the Remuneration Committee
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:
i. Determine and ensure that appropriate Group remuneration policies
are in place for the Company and its subsidiaries taking into account
all factors the Committee deems necessary including relevant legal
and regulatory 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 executive management of the quality required to run the
Company and Group subsidiaries successfully without paying more
than is necessary, having regard to views of the shareholder and
other stakeholders;
ii. I 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 long-term strategy, and
that enable the use of discretion to override formulaic outcomes and
to recover and/or withhold sums under appropriate specified
circumstances;
iii. Approve for recommendation to the Shareholder the remuneration
for Executive Directors and the fees for Non-Executive Directors for
the Company, aside from the Chair where the Shareholder will
advise the remuneration for the Chair as determined by the
Shareholder;
iv. Approve the remuneration packages of individuals who are members
of the Group Executive and fees for Non-Executive Directors of the
Company's subsidiaries;
Vv. 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?.
B. DUTIES AND RESPONSIBILITIES
Remuneration Policy for the Company: Executive
2. Approve for recommendation to the Board the remuneration policy for
the Executive Directors and those individuals who are members of the
Group Executive.
1 post Office Management Services Limited (Post Office Insurance) and Payzone Bill Payments Limited.
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Terms of Reference of the Remuneration Committee
Remuneration Package: Executive Directors, Members of the Group
Executive, Group boards
8. Approve the remuneration package and terms and conditions of
employment including any variations thereof for proposed Executive
Director, Group Executive (including any interim appointments 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 to:
i. Base salary
ii. STIP
iii. LTIP
iv. Pension Provision
v. Contractual terms such as notice periods.
The recommendations shall align with the Group Remuneration Policy
approved by the Board, the Public Sector Pay and Terms Guidance (PSPTG)
(subject to any modifications agreed in the Shareholder Framework
Document) and the HMT Senior Pay Guidance (a requirement for all public
corporations).
The Committee must make a recommendation to the Shareholder and
Shareholder approval is required in respect of the remuneration packages
for 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).
5. Approve each element of the remuneration package and_ total
remuneration for new hires and any internal promotions and appointments
which are proposed to carry a salary in excess of the lowest salary of any
individual member of the Group Executive.
6. Review annually the overall total remuneration of the Senior Group
(defined as Executive Directors, members of the Group Executive, and
Group board appointments including interim 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 proposed design of, changes to, and outturn against long-
term performance-related incentive schemes for the Executive Directors,
members of the Group Executive 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
8. Review annually the long-term performance related incentive schemes for
the Executive Directors, members of the Group Executive and senior
managers eligible to be invited to participate in the Company’s LTIP.
9. Where final LTIP outturns are in line with Shareholder approval obtained
under paragraph 7 above, Inform DBT and UKGI officials in respect of the
final outturn amounts for performance related LTIP for Executive Directors.
Where final LTIP outturns proposed for Executive Directors are not in line
with Shareholder approval, additional Shareholder approval must be
obtained prior to award.
Short Term Incentive Plan (STIP)
10. Approve the criteria for, changes to, and outturn against agreed Plan
targets of short-term performance-related pay arrangements for Executive
Directors and members of the Group Executive. Executive Director STIP
arrangements must be approved by the Shareholder.
11. Review annually the criteria for and outturn against agreed Plan of short-
term performance related pay arrangements for Executive Directors and
members of the Group Executive.
12. Where final STIP outturns are in line with Shareholder approval obtained
under paragraph 10 above, Inform DBT and UKGI officials in respect of
the final outturn amounts for performance related STIP for Executive
Directors. Where final STIP outturns proposed for Executive Directors are
not in line with Shareholder approval, additional Shareholder approval
must be obtained prior to award.
13. Receive information on the total outturn of performance related pay
arrangements across the business for information.
Exit Packages
14. Approve the exit package for any individual with a salary above the lowest
salary of the members of the Group Executive, where the exit package
would be in excess of contractual obligations. Where any exit package for
an Executive Director is in excess of the contractual obligations of the
Executive Director, the exit package must be approved by the Committee
for recommendation to the Shareholder.
Remuneration Policy for the Company: Non-Executive Directors
15. Approve for recommendation to the Shareholder the fees for Non-
Executive Directors of the Company to the Board, aside from the Chair
where the Shareholder will advise the remuneration for the Chair as
determined by the Shareholder.
Engagement
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.
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Terms of Reference of the Remuneration Committee
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.
c. REPORTING RESPONSIBILITIES
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.
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.
20. Report on its activities in the Company’s annual report which should
describe the work of the Committee in line with the requirements of the UK
Corporate Governance Code.
21. Identify in the annual report any consultants appointed as remuneration
consultants, alongside a statement about any other connection they have
with the Company or individual directors.
D. AUTHORITY
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.
23. The Committee shall be authorised to seek any information it requires from
any employee of the Company in order to perform its duties.
24. The Committee shall have full authority to appoint remuneration
consultants and to commission or purchase any reports, surveys or
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
consultants.
E. COMPOSITION AND GOVERNANCE
Membership
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 be appointed for a period coinciding with their term 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
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Terms of Reference of the Remuneration Committee
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 months.
27. The Committee Chair should seek engagement with the Shareholder on
significant matters related to the Committee’s areas of responsibility.
28. In the absence of the Committee Chair at any meeting, the Committee
members present shall determine who shall chair the Committee.
29. The Committee shall consist of at least two independent Non-Executive
Directors. If considered independent at the time of appointment, the Chair
of the Company may be a member of the Committee, but shall not chair
it.
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.
Quorum
31. Quorum shall be two members.
Committee Secretary
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
33. The Committee shall meet as often as required but at least three times per
year.
Governance
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.
35. Notice of each meeting shall be given to all those entitled to participate at
least three working days before the meeting.
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.
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
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POL00363152
POL00363152
Post Office Limited
Terms of Reference of the Remuneration Committee
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.
38. The Secretary shall provide current and new Committee members with any
training, briefings or induction required under the supervision of the Chair.
39. Only members of the Committee have the right to attend Committee
meetings. The Group Chief Executive, 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.
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.
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
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.
42. If there should be disagreement between the Remuneration Committee
and the full Board, the Chair 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
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: Effective from:
Post Office Limited Board 25/03/2015 14 25/03/2015
Post Office Limited Board 25/11/2015 1.2 25/11/2015
Post Office Limited Board 30/10/2018 1.3 30/10/2018
Post Office Limited Board 20/07/2019 1.4 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
(no changes)
Post Office Limited Board 28/03/2023 3.0 29/03/2023
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