Background and Authority
The Board of Aberdeen Asset Management PLC (“the Company”) has delegated to the Committee responsibility for reviewing and approving the remuneration policy and practices for the Company and its subsidiaries (together “the Group”) and for setting the remuneration of the Executive Directors of the Company and senior management in line with the remuneration strategy, together with other the other matters detailed below.
The Committee is appointed by the Board of the Company (“the Board”), from which it receives its authority, and is authorised to seek any information it reasonably requires from any employee of the Group in order to perform its duties and to obtain, at the Company’s expense external legal or other professional advice on any matters within these terms of reference.
Membership and attendance
The Committee shall consist of at least three members, all of whom should be independent non-executive directors. The Board shall appoint the Chairman of the Committee from among the members of the Committee.
The Company Secretary shall act as Secretary to the Committee.
Only members of the Committee have the right to attend Committee meetings, however, the Chairman of the meeting, at his discretion, may call upon other persons to attend as and when appropriate and it would be usual to invite the following to be in attendance at all or part of the meetings:
The Chief Executive
The Deputy Chief Executive
The Finance Director
The Head of Human Resources
Meetings shall be held as required to enable the Committee to fulfil its obligations to the Company and shall not meet less than four times annually.
The quorum shall be two members. In the absence of the Chairman of the Committee, the remaining members present shall elect one of the other members present to chair the meeting.
The Secretary shall keep appropriate records and shall minute the meetings and resolutions, including the names of those present and in attendance at each meeting. Copies of all minutes and resolutions shall be circulated to all members of the Committee and made available to all members of the Board.
The Committee shall:
- Review and approve the remuneration policy and practices of the Group;
- oversee any major changes in employee benefit structures throughout the Group;
- determine the specific remuneration packages for the Chief Executive, the Chairman and the other executive directors. The remuneration of non-executive directors shall be a matter for the Chairman and the executive directors;
- determine the individual awards to the executive directors and all other executives earning in excess of £400,000 per annum, any Material Risk Takers and any AIFMD identified staff;
- determine the size of the annual bonus pool taking into consideration such factors as the Company’s performance and capital position and any other relevant factors;
- approve the design of and determine targets for, any performance related pay schemes operated by the company and approve the total annual payments made under such schemes;
- approve the design of all share incentive plans for approval by the PLC Board and shareholders and for such plans agree annually, the performance targets to be used, whether or not awards will be made and if so, the overall amounts of such awards;
- consider the recruitment of any employee with a basic salary of £175,000 per annum or more or with a basic salary plus guaranteed bonus of £175,000 per annum or more or any Material Risk Takers earning £175,000 per annum or more;
- consider redundancy/severance payments in excess of the general or enhanced redundancy payment policies, except where it falls under the de minimis mentioned hereafter;
- consider termination payments in excess of £75,000; and,
- be responsible for setting terms of reference and for appointing any remuneration consultants who advise the Committee. In carrying out its duties, the Committee should consider:-
- the provisions of the UK Corporate Governance Code and any relevant legislation or guidance, including the rules of the Financial Conduct Authority and any other regulators;
- salaries and packages provided in competitor companies; and,
- the views and opinions of shareholders and other interested parties.
To the Board
The Chairman of the Committee shall report formally to the Board on the Committee’s proceedings after each meeting.
To the shareholders
The Committee is responsible for reviewing, on behalf of the Board, the contents of the Remuneration Report to be included in the Company’s Annual Report, ensuring that it is in compliance with all appropriate legislation and regulation, including the UK Corporate Governance Code and the UK Companies Act 2006.
The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities.
The Committee shall, at least once a year, review its own performance and terms of reference to ensure that it is operating effectively and, if relevant, to recommend any changes necessary to the Board.
These Terms of Reference were approved by the Board at the meeting on 20 July 2016.