This section of the Directors' Remuneration Report describes the membership of the Remuneration Committee, its advisers and principal activities during the period. It forms part of the Annual Report on Remuneration section of the Directors' Remuneration Report.

Membership

The current membership of the Remuneration Committee, together with appointment dates, is set out below:

Douglas McCallum

Chairman

Remuneration Committee member since 3 October 2011

Number of meetings: 4

Number attended: 4

Ruth Anderson

Remuneration Committee member since 9 March 2010

Number of meetings: 4

Number attended: 4

David Grigson

Remuneration Committee member since 5 February 2013

Number of meetings: 4

Number attended: 4

The biography of each member of the Remuneration Committee is set out in the Board of Directors.

Other attendees at the Remuneration Committee meetings included the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the People Director, the Rewards and Benefits Manager, the Company Secretary, the Deputy Company Secretary and the external adviser to the Remuneration Committee, Deloitte LLP. The Chairman, the Company Secretary and the Executive Directors and other attendees are not involved in any decisions of the Remuneration Committee and are not present at any discussions regarding their own remuneration. The Deputy Company Secretary is secretary to the Remuneration Committee.

Since the period end, the Company announced that the Remuneration Committee composition will change as a result of the retirement of David Grigson at the AGM and the appointment of new Non-Executive Director, Andrew Harrison. Andrew Harrison will become a member of the Remuneration Committee with effect from 1 March 2016.

External Advice

During the period, the Remuneration Committee and the Company retained independent external advisers to assist them on various aspects of the Company's remuneration and share schemes as set out below:

AdviserRetained byServices Provided to the
Remuneration Committee
Other Services Provided
Deloitte LLPRemuneration CommitteeExecutive remuneration advice including assisting in a benchmarking review of Executive Director remuneration.Separate teams engaged by the Company to advise on a range of Company tax, share schemes and accounting matters, including transaction advice.
Slaughter and MayCompanyNoneEmployment law, share schemes and tax as well as general UK legal advice in respect of a number of the Company's remuneration matters, including vesting of the LTIP and the Chairman's Share Matching Award.

Deloitte LLP Reappointment Review

The Remuneration Committee considered the reappointment of Deloitte LLP. This review took into account Deloitte's effectiveness, independence, period of appointment and fees.

The Remuneration Committee reviewed the performance of Deloitte LLP based on feedback from members of the Remuneration Committee and management. The criteria for assessing their effectiveness included their understanding of business issues and risks, their knowledge and expertise and their ability to manage expectations. The Remuneration Committee concluded that the performance of Deloitte LLP remained effective.

The Remuneration Committee considered the independence and objectivity of Deloitte LLP. Deloitte LLP have provided assurances to the Remuneration Committee that they have effective internal processes in place to ensure that they are able to provide remuneration consultancy services independently and objectively. Deloitte LLP confirmed to the Company that it is a member of the Remuneration Consultants Group and as such operates under the code of conduct in relation to executive remuneration consulting in the UK. The Remuneration Committee is, following its annual review, satisfied that Deloitte LLP has maintained independence and objectivity.

For the period, £32,000 in advisory fees were paid or payable to Deloitte LLP for services provided to the Remuneration Committee.

Deloitte LLP were appointed by the Remuneration Committee in 2012 following a tender process led by the then Remuneration Committee Chairman.

Following review by the Remuneration Committee, it was agreed that Deloitte LLP should be re-appointed.

Other Support for the Remuneration Committee

In addition to the external advice received, the Remuneration Committee consulted and received reports from the Company's Chief Executive Officer, the Chief Financial Officer, the Chairman, the People Director and the Deputy Company Secretary. The Remuneration Committee is mindful of the need to recognise and manage conflicts of interest when receiving views and reports from, or consulting with, the Executive Directors or members of senior management.

Principal Activities of the Remuneration Committee During 2015

The Remuneration Committee has been delegated responsibility for setting remuneration for all of the Executive Directors, the Chairman and the Company Secretary. This is outlined in the Statement of Corporate Governance. In line with its terms of reference, the following key matters were considered by the Remuneration Committee during the period:

  • approving the 2014 Directors' Remuneration Report;
  • reviewing performance under the 2014 AIP and consideration of any bonuses payable;
  • approving the 2015 AIP performance targets;
  • approving the 2015 LTIP awards and performance targets;
  • reviewing performance against LTIP awards;
  • consideration of changes to the performance measures for the 2016 LTIP awards;
  • receiving a report from Deloitte LLP on Executive Director remuneration benchmarking and approving increases in the Executive Director base salaries;
  • receiving a report on Group-wide and management remuneration for 2015;
  • consulting the Chief Executive Officer and the Chairman on performance and remuneration of the Executive Directors;
  • receiving reports from Deloitte on senior executive pay, market themes and trends;
  • receiving a report on the Group's share schemes and plans for 2016;
  • receiving a report on shareholder feedback on the 2014 annual report and 2015 annual general meeting;
  • approving a new invitation under the Sharesave scheme for 2016;
  • approving minor amendments to the JSOS scheme rules;
  • reviewing the Remuneration Committee's performance and terms of reference; and
  • reviewing the performance of Deloitte LLP and retaining them as external remuneration consultants.

The Remuneration Committee's work also included monitoring and considering (rather than recommending) the level and structure of remuneration for the Management Committee. Ultimate decision-making responsibility for the remuneration of the Management Committee lies with the Chief Executive Officer. This approach still gives the Remuneration Committee necessary visibility of senior management remuneration to enable it to formulate appropriate policy and make decisions regarding Executive Director remuneration, but allows the Chief Executive Officer, who is best placed to make remuneration decisions about the management team, the flexibility to do so. The Remuneration Committee believes this practice is beneficial to the Company and supports the Code principle D.2.

The Remuneration Committee carried out a review of its terms of reference during the period, which did not result in any changes.

In addition to the activities of the Remuneration Committee, the Executive Directors and the Chairman reviewed the remuneration arrangements of the Non-Executive Directors.