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Message
From: Henry Staunton r
on behalf of I Henry Staunton
Sent: 21/12/2023 1
To: Nick Read
Subject: Fwd: Nick’s Remuneration
Nick ,
I want to be completely open with you . You will see Lorna's comments which are a complete rejection of my
note - i will send you a copy . You will also see that I intend to step off the RemCo when we reorganise the
composition of the committees in a few months . I meet a blank wall with Lorna and she has the only vote . The
recently retired NEDs said there was no point to being on the RemCo - it was a waste of time . 1 am too busy
working with you on this business to waste my time .
You will also see that I have asked for much much more support for our CEO , and not just on remuneration
matters and I reject her views as " unfair " .
Tam fully expecting Lorna to " investigate " me as well for disagreeing - at least we will be in the same boat !
We have investigated three Main Board directors and all the GE in the last year so I will find out how you all
feel soon enough .
I think you are doing a TERRIFIC job as do all our independent and PM NEDS . Please keep going . There
MUST be a way through all this . I will ponder a solution over the Christmas holidays .
UKGl are completely disinterested in " the business". 1, with your help , MUST change that in 2024 . I fear
that a Whitehall NED will make the position worse . One or two NEDs who voted for a Whitehaller are
changing their minds ! I sense Lorna is working behind the scenes to appoint the SID single handedly. That
needs sorting too but she is all powerful .
We must nonetheless try and focus on the business and not this silly politics .
Best ,
Henry
Sent from Outlook for iOS
From: Henry Staunton
Sent: Thursday, December 21, 2023 12:07 pm
Lorna ,
Your points noted but they are in my opinion MOST unfair to our CEO . He needs much much more support I
fear and not just wrt pay - will do the best I can motivation wise .
Henry
PS I assume Amanda agrees with your sentiments. You and I Lorna look so differently at this business ( inc rem
and motivation ) that I have decided I will step off the RemCo . I do not formally sit on any of the Board
committees and the RemCo will be no exception . I will attend all Board committees as previously . Rachel and
Ihave been mapping out committee composition and this will be reflected in the next iteration .
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Sent from Outlook for iOS
From: Gratton, Lorna - UKGI <_
Sent: Thursday, Dece!
To: amanda burto!
'ben.tidswell!
1
Subject: RE: Nick’s Remunera ion
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Henry,
Thanks for your message.
I think it’s tricky one, and I’ve spoken to Amanda about it this morning.
I can see that Nick might be tempted to compare his position that to that of others in the business.
However, to my mind, whilst Nick might feel hard done to, as CEO, many of the issues that cause the reduction in his
rem ultimately fall at his door. The £54k bonus repayment was voluntary, and caused not only by a Remco issue, but also
by a POL people function that had become a bit of a mess. The likely low pay out on the LTIP 21/24 is a function of cost
over runs in the business and significant delays to the IT programme. Whilst other people in the business manage the
day to day of these, as CEO, the buck ultimately stops with him on them. (I’d also note that people who do manage
these programmes, who report into Nick haven't been effectively held to account on them). The terms of this LTIP
aren’t a surprise to Nick, and he would have known the position on it for a long time. So in short, I’m afraid I’m not
sympathetic on this occasion.
Aside from this, when Nick was awarded a 5% backdated pay rise from April 2022, a condition of it being granted was
that he wouldn’t receive a pay rise in 2023/24. All remuneration increases for Nick require Shareholder consent, and I
can not image that any request would be considered favourably by the department or HMT (approval from both is
required).
All this said, I’ve spoken to lan Rudkin this week, who has told me that Nick has enquired about joining the POL pension
scheme. At the time of his appointment, pay in lieu of pension was explicitly factored into his base salary. I understand
however that we due to the auto-enrolment pension legislation, if Nick wishes to join the company scheme, then he
may be legally entitled to. Whilst this, like any increase to his remuneration, would require Shareholder consent, I don’t
think the shareholder would be able to stop it, if it is a legal entitlement (though they are likely to be unhappy about it,
and think it’s not in the spirit of his contract). My team are picking up with lan.
Whilst I’m sorry this will lead to further difficult conversations with Nick, I think we should suggest he focus on the 23/24
STIP, which is likely to have a good pay out on it.
Sorry not to go into Christmas with a more positive message.
Lorna
Lorna Gratton I Director
UK Government Investments
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London, SW1H OET
Begin forwarded message:
From: Henry Staunton
Date: 20 December 2023 at 16:49:49 GMT__
To: Amanda Burton < GRO
Lorna Gratton
ben.tidswel
Subject: Nick’s Remuneration
Dear All,
Earlier this week I asked Nick to leave RemCo and discussed what we ought to do about his package. He
did not prompt me but I sensed an issue might arise .
We chatted this afternoon . He noted the management team were pleased with a pay rise ; a 50 %
deferred retention bonus for those who receive a 4 or a 5 personal rating to be paid this Friday ; and
now a replacement for the LTIP 21-24 scheme to pay out at 70 % in the summer .
I sense he feels that similar interest and attention has not been shown in his rem . The above does not
apply to him but he also took the financial and reputational hit ( as he sees it ) for RemCo’s bonus
governance failure to the tune of £54 K . On a basic comparison with an SLG colleague he reckons it has
cost him £ 180 K .
He feels this is unfair treatment ..... and all this is before mentioning Rose and being the only Director in
a business as he says is in “ complete crisis “.
My assessment before the RemCo was that he may feel this is discriminative and unfair and , after our
chat today , I would say we have a very very serious risk of losing our CEO . I think he feels tremendously
under valued by the shareholder not only wrt pay and rations . I raised the matter at the beginning of
the week and raise it again now even more seriously . We really are at risk I think of losing him .
I know we might say we should try and find a successor but we should start by making some effort to
treat him in line with how we treat the rest of the team .
Best ,
Henry
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