Novae Group plc (“Novae”)
TERMS OF REFERENCE FOR THE REMUNERATION COMMITTEE
References to “the Committee” shall mean the Remuneration Committee of Novae. References to “the Board” shall mean the Board of Novae.
1. Membership
1.1 Members of the Committee shall be appointed by the Board. The Committee shall be made up of not less than 2 and not more than 5 members, all of whom are independent non-executive directors (by reference to the Combined Code).
1.2 Only members of the Committee have the right to attend Committee meetings. Novae executive directors and external advisers may be invited to attend for all or part of any meeting.
1.3 Appointments to the Committee shall be for a period of up to three years, which may be extended for two further three-year periods.
1.4 The Board shall appoint the Committee Chairman. The chairman of the Board shall not be appointed the Committee Chairman. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.
2. Secretary
2.1 The Company Secretary shall act as the secretary of the Committee.
3. Quorum
3.1 The quorum necessary for the transaction of business shall be two members and meetings may take place by telephone. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
4. Meetings
4.1 The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee shall require.
5. Notice of Meetings
5.1 Meetings of the Committee shall be convened by the secretary of the Committee at the request of the Chairman.
5.2 Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee no later than 5 working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time.
6. Minutes of Meetings
6.1 The secretary or the Chairman shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
6.2 Minutes of Committee meetings shall be circulated promptly to all members of the Committee and, once agreed, to all members of the Board at the Board meeting following.
7. Annual General Meeting
7.1 The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities.
8. Powers and duties
The Committee shall:
8.1 determine and agree with the Board the broad Group policy for the remuneration of the Group Chief Executive, its executive directors and Company Secretary and such other members of the Group’s executive management whose basic salary is £100,000 or more and any others whose compensation arrangements it is asked by the Board to consider (“Relevant Employees”);
8.2 determine and agree individual arrangements for the remuneration and all other incentives and benefits of Relevant Employees whose basic salary is £175,000 or more or who are executive directors of Novae, its chairman or its Company Secretary. (Individual arrangements for the remuneration of other Relevant Employees are, however, delegated by the Committee to the Remuneration Committee of Novae Syndicates Limited (“the Novae Syndicates Committee”) or the Remuneration Committee of Novae Insurance Company Limited (“the Novae Insurance Committee”) as set out in para 9 below. If the chairman of Novae is a member of Remco, he shall not take part in discussion or determination of his own remuneration and the other members of Remco shall take into account the views of the executive directors in determining such remuneration);
8.3 in determining Group remuneration policy, take into account all factors which it deems necessary, the object of such policy being to ensure that Relevant Employees are provided with appropriate incentives to encourage enhanced performance and are, in a fair and responsible manner, rewarded appropriately for their individual contributions to the success of the company;
8.4 review from time to time the ongoing appropriateness and relevance of the Group’s remuneration policy;
8.5 approve the design of, and determine targets for, any bonus or performance related pay schemes operated by the Group and approve the total annual payments made under such schemes;
8.6 review the design and monitor the operation of all long term incentive plans for approval by the Board and shareholders and for any such plans, determine each year whether awards will be made and, if so, the overall amount of such awards; the individual awards and the performance targets to be used for executive directors of Novae and other Relevant Employees whose remuneration has not been delegated to the Novae Syndicates Committee or the Novae Insurance Committee;
8.7 determine the policy for, and scope of, pension arrangements for Relevant Employees whose remuneration has not been delegated to the Novae Syndicates Committee or the Novae Insurance Committee;
8.8 ensure that contractual terms on termination of employment of any Relevant Employee whose remuneration has not been delegated to the Novae Syndicates Committee or the Novae Insurance Committee, and any payments consequently made, are fair to the individual and to the company; that failure is not rewarded in excess of contractual entitlement and that the duty to mitigate loss is recognised;
8.9 in determining such packages and arrangements, give due regard to any relevant legal requirements, the provisions and recommendations in the Combined Code and the UK Listing Authority’s Listing, Disclosure and Transparency Rules and associated guidance;
8.10 review and note the remuneration trends across the Group;
8.11 oversee any major changes in employee benefits structures throughout the Group;
8.12 determine the remuneration of non-executive directors of Novae’s subsidiary companies, save that no member of the Committee who sits as such a director shall take any part in the determination of his own remuneration for such directorship;
8.13 ensure that all provisions regarding disclosure of remuneration including pensions, as set out in the Directors’ Remuneration Report Regulations 2002 (and any successor regulations) and the Combined Code are fulfilled;
8.14 be responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the committee; and to obtain reliable, up-to-date information about remuneration in other companies.
8.15 The Committee shall have full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations.
8.16 The remuneration of Chairman and other non-executive directors shall be a matter for the executive members of the Board. No director or manager shall be involved in any decisions as to their own remuneration.
9. Relationship with the Novae Syndicates and Novae Insurance Committees
9.1 The Novae Committee shall:
(a) review in conjunction with the Novae Syndicates Committee Chairman and the Novae Insurance Committee Chairman and recommend to the board of Novae from time to time the terms of reference of the Novae Syndicates Committee and the Novae Insurance Committee;
(b) in reviewing Group remuneration policy, take into account views expressed by the Novae Syndicates Committee and the Novae Insurance Committee;
(c) inform the Novae Syndicates Committee and the Novae Insurance Committee of any changes to Group policies or arrangements which it should follow in agreeing individual remuneration packages;
(d) delegate to or withdraw from the Novae Syndicates Committee and the Novae Insurance Committee such of the powers and duties set out above as the Novae Committee thinks fit from time to time; and
(e) receive a copy of the minutes of all the meetings of Novae Syndicates Committee and the Novae Insurance Committee and any other papers setting out the effect of decisions taken by it.
10 These terms of reference shall be reviewed annually by the Board of Novae.
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