RC(11)5™
RC11/23-
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Royal Mail — Strictly Confidential
ROYAL MAIL HOLDINGS plc
(Company no. 4074919)
REMUNERATION COMMITTEE
Minutes of the meeting of the Committee
held at 100 Victoria Embankment, London, EC4Y 0HQ on
Present:
Orna Ni-Chionna
Donald Brydon
Nick Horler
Cath Keers
Paul Murray
Les Owen
David Currie
Also present:
Moya Greene
Jon Millidge
Andrew Dalkin
John Duncan
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Friday 3 June_2011 at 9.00 am
Non-Executive Director, Chairman of the Committee
Chairman
Non Executive Director (by phone)
Non Executive Director (by phone)
Non-Executive Director (by phone)
Non-Executive Director (by phone)
Non Executive Director
Group Chief Executive
Company Secretary, Secretary of the Committee
Director of Reward
Group HR Director
MINUTES OF PREVIOUS MEETING —
The Committee agreed the minutes of the meeting of 27 April 2011
MATTERS ARISING
Jon Millidge advised the Committee on developments regarding the
Royal Mail Senior Executive Pension Plan (RMSEPP). The Trustees
of the scheme had now taken advice from Counsel on the issue of
indexation and that advice had led them to conclude that the
appropriate indexation would be RPI. Jon Millidge further advised the
Committee that he had indicated to RMSEPP that the Company would
consider a challenge should the Trustees take action to implement
RPI indexation.
Executive Director Bonuses (11)13(a)
The Committee was reminded that this year was the first year in which
individual Board members had been set personal objectives and that
the performance of individuals against those personal objectives had
been conducted by the Chairman, the Chief Executive and the Chair
of the Committee. Donald Brydon and Orna Ni-Chionna had discussed
the performance of the Chief Executive.
The Committee noted that the Executive team had discussed the
payment of bonuses in the context of the performance of the
Company and projected valuation of ColleagueShares. The
Executivewere inclined not to pay bonuses but recognised that
expectations had not been managed amongst managers on whom the
RC11/26
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Company would be relying in the event of industrial action. It had
concluded that the Company should honour its commitments to its
managers.
The Committee was concerned that the low level of bonuses may be
prove to be disappointing to the senior executives, but were assured
that senior executive expectations were relatively low. In reviewing
the proposed payments, the Committee noted that:
i) The difference between the CEO’s bonus and the
Managing Director Transformation’s bonus were
comparable to the previous year
ii) There were some anomalies between the scale of the
challenge for different executives producing surprising
differences in the level of bonuses
iii) Overall, the bonus figures fairly reflected the performance
of the Company in an exceptionally challenging period
The Committee approved the proposed bonus for Moya Greene
having considered the comments from the Secretary of State on the
Company's performance
The Chief Executive joined the meeting and elaborated further on
the performance of individuals
The Committee noted that the Secretary of State had provided input
on the performance of the Company and its executives and conidred
that input. The Committee agreed the proposed bonuses for the
remainder of the executive team subject to final sign off from the
Chairman of the Committee.
Directors’ Remuneration report RC(11) 14
The Committee reviewed the Directors’ Remuneration Report and
noted that:
i) There were still a few gaps where information was awaited
ii) Directors would be asked to complete a remuneration
certificate in respect of their own fees
iii) The report was still subject to review from the external
auditors
The Committee noted that a further version of the report would be
circulated prior to publication and agreed that the Chairman of the
Committee would have devolved authority to sign off the final version
for inclusion in the report and accounts.
Group Executive Team Bonus Arrangements
The Committee considered John Duncan’s paper on bonus
arrangements for the members of the Group Executive Team. The
Committee noted that:
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i) the Chief Executive had reviewed the individual
performance against objectives of the GET members
and had concluded on a personal objective rating
ii) the bonus awards include an award for quality of
service at the actual level (not allowing the force
majeure agreed for the regulator)
iii) the total of the bonus awards was substantially lower
than in the previous year.
(b) IThe Committee agreed the awards recommended by the Chief
Executive.
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(a) There being no further business, the Chairman of the Committee
closed the meeting.
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