FY19-21 LTIP The Committee determined thatFor the LTIP covering the performance period July 2018- June 2021, 100% of the awards granted in 2018 will vest the executive, led by the CEO in October 2021 (to Nick Wilkinson) and November 2021 (to Laura Carr) representing 180,802 shares and 105,893 Nick Wilkinson, have performedshares respectively. During the performance period forthis LTIP award Dunelm’s EPS grew at a compound annual excellently in very challenging rate of 19.6%. After sale to cover tax and National Insurance circumstances, and this has liabilities, at least two thirds of these shares must be retained for at least the duration of employment, in accordance with been an important driver of the the shareholding guidelines which are set out on page 146. The Board believes these LTIP payments are well deserved strong financial performance given the way our leadership team adapted our digitaland distribution infrastructure to serve customers and of the Company and the wider strengthen the business during a three-year performance stakeholder experience.” period which included many months of government– imposed store closures. Note that the Dunelm share price increased from 505p to 1,367p over the three-year goals (weighting 25%). The intention was that the targets set performance period of this LTIP award, which is reflected would be no less stretching than the ‘usual’ targets that are in the value attributed to this award in the ‘single figure’ 80% financial and 20% strategic and personal; and that ‘on table. No adjustment was made to the targets or the vesting target’ performance would still deliver 40% of the maximum outcome in respect of our decision to repay funds received opportunity. from the Job Retention Scheme, to reflect FY20 financial performance which was significantly impacted by Covid-19, In this Covid-impacted year we operated the business with or any other reason. a rolling quarterly forecast rather than our normal annual budget because we felt that an annual budget would soon Stakeholder alignment become meaningless because of the unpredictability caused After considering the experience of each of our stakeholder by the Covid-19 pandemic. Accordingly, financial targets groups during FY21 the Committee determined that this were set quarterly, and aligned to our internal forecasts and is a fair and reasonable outcome and no discretion was the external forecasts current at that time. The strategic and exercised by the Committee to adjust the outturn as a personal targets were set at the beginning of the financial result of this. In making this determination, the Committee year. Once set, the quarterly and annual targets were not considered the following factors: adjusted, although the Q2 performance was assessed • The financial performance of the Group has been strong, after taking into account the Board’s decision to repay delivering record sales and profit, despite the ongoing amounts claimed under the JRS in FY20, which was not in the Covid-19 crisis which has impacted operations and the original forecast for that quarter. At the end of the year, the external environment throughout the financial year. Committee applied an overall assessment of the outcome as described below. • Significant progress has been made to advance the strategic objectives designed to accelerate future growth The Committee applied discretion to adjust formulaic and advance the Company’s long-term ambitions. outcomes as follows: to adjust the Q2 PBT performance target • The business performed strongly on customer and as referred to above, and to reduce the score for Q3 PBT colleague engagement scores, including the customer performance to nil, because although the PBT target was met ‘How safe was your experience?’ measure, which was the Committee considered that it was not appropriate to pay consistently 95% or above. bonus in a quarter when profit was negative. As noted above, • All colleagues received a pay increase during the year; the targets for the FY21 annual bonus also contained a larger colleagues in a bonus scheme will receive a similar than usual weighting to non-financial measures (50%), which outcome to that of Nick and Laura, and a second required the Committee to apply a degree of judgement in discretionary ‘thank you’ payment has been made to all considering the extent to which they had been met. Apart other colleagues, of between £250 and £350 (dependent from the above, no discretion was applied to adjust the on average hours worked). formulaic outcome of the FY21 annual bonus. • Continued support was given to local communities and charitable activity, as described elsewhere in this report. The Committee has determined that 81.22% of the maximum • Feedback from the National Colleague Voice on Executive bonus has been earned for Nick Wilkinson and 80.47% pay has been that colleagues are satisfied with pay for Laura Carr. The FY21 bonus was granted by way of awarded provided that it reflects the performance of the a conditional share bonus award, 50% of which vests in business. September 2021 and the remainder in September 2022. This means that 24,012 shares will vest to Nick and 16,211 to Laura • The Group was able to resume payment of dividends in 2021, and 24,013 to Nick and 16,211 to Laura in September to shareholders (no dividends were paid in 2020), with 2022. After share sales to cover tax and National Insurance an interim dividend of 12p per share paid on 10 April liabilities, at least two thirds of these must be retained for at 2021, and a final dividend of 23p per share, and a special least the duration of employment, in accordance with the dividend of 65p per share. shareholding guidelines which are set out on page 146. DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021 139 GOVERNANCESTRATEGIC REPORT FINANCIAL STATEMENTSOTHER INFORMATION