Corporate governance report Remuneration continued • The Board decision to repay the £14.5m claimed from the Annual Bonus and FY22-24 LTIP government’s Job Retention Scheme in FY20, and the We will revert to our usual policy of paying our FY22 fact that no claims have been made in FY21. Colleagues annual bonus in cash, two thirds of which, for the Executive who were placed on furlough in FY21 received the Directors, (after payment of tax and National Insurance same payments that they would have received via the liability) must be invested in Dunelm shares to be retained government scheme, funded by the Group. during employment. Targets will be based on our annual • The Board’s decision to repay £4.0m in Covid-related budget and are in the more usual balance of 75% financial grants received in FY21. and 25% strategic and personal, including environmental, • The fact that the Board has decided not to repay to the social and governance measures linked to delivery of our government business rates relief made available to all strategy. Further details are set out in the Implementation retailers in FY20 and FY21. The Committee noted that in Report. We will also return to our usual practice of setting making this decision the Board has carefully considered targets for awards to be made under our Long-Term both the respective interests of all of our stakeholders Incentive Plan upon grant of the awards, expected to and a range of other factors, including the repayment of be in October 2021. other government support as noted above, the strong recovery of the business, the fact that our stores were EXECUTIVE PENSIONS closed to customers for a third of the financial year and In FY21 we committed to reduce the pension entitlement of the competitive imbalances arising from the boundaries our incumbent executives, Nick Wilkinson (CEO) and Laura between essential and non-essential retail. Further details Carr (CFO), then 10% of contractual base salary for each of relating to the Board’s decisions in relation to repayment them, to the rate available for the wider workforce, currently of government support are in the case study on page 110. 3%, by 1 July 2023. The Committee is pleased that Nick and • Shares earned by Executive Directors are to be retained Laura have offered to bring forward this reduction, and to in accordance with the Company’s Shareholding reduce their pensions to the level of the wider workforce, Guidelines. and therefore with effect from 1 August 2021 their pension entitlement will be 3% of base salary. FY22 REMUNERATION Base Salary CONCLUSION At our annual review of the Executive Directors’ The Committee considers that the single figure remuneration, the Committee determined that both Nick remuneration received by Nick and Laura in FY21 is and Laura have continued to perform strongly throughout appropriate to provide reward, motivation and retention, the year, and this has been reflected in the financial with over 80% of their single figure received being paid in performance of the Company. We decided to award each of shares subject to deferral and/or holding requirements. them a 3.5% increase in base salary, which is in line with the I hope that shareholders will agree that we flexed our increases given to colleagues across the Group. After these approach to remuneration during FY21 in the best interests increases, the base pay for Nick of £582,125 and Laura of of the Group so that all stakeholders continue to be aligned, £396,663 will still be slightly below the external benchmark and that you will support the resolution in relation to the median for our peers. Implementation Report. In awarding these pay increases, the Committee took into Yours faithfully, account the FY22 pay awards made to the wider colleague population as follows: William Reeve • The one-off ’thank you’ payment to colleagues not in a Chair of the Remuneration Committee bonus scheme referred to above 8 September 2021 • The median pay increase for all colleagues of 3.5% The Committee also considered a wider range of stakeholder considerations, including the feedback on Executive Director pay given by the National Colleague Voice referred to above. 140 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021