Corporate governance report Remuneration continued ANNUAL Awards to be made to Executive Directors other than Sir Will Adderley, BONUS who has requested that he not be considered for annual bonus OPERATION • Ordinarily paid in cash, after the results for the financial year have been audited, subject to performance targets Annual bonus for FY22 having been met, with two thirds of the bonus earned required to be invested in Dunelm shares, which must be and subsequent years retained for the duration of employment and are then subject to post-departure holding requirements as set to which this Policy out in the ’Shareholding requirements’ section below. applies • Alternatively, if the Committee considers that FY22 or any later year to which this Policy applies is substantially impacted by the Covid-19 pandemic, the award may be delivered as a conditional award of Dunelm shares granted shortly after the start of the year over shares with a market value equal to the maximum bonus opportunity and with vesting subject to satisfaction of performance targets, as with the bonuses for FY20 and FY21. For these purposes the market value of a share will be the average share price over June and July of that year (consistent with the approach for the bonuses in respect of FY20 and FY21) unless the Remuneration Committee determines otherwise. Subject to the satisfaction of the performance targets, each award will vest: – As regards 50% of the shares subject to it, on the first dealing day after the announcement of Dunelm’s results for the financial year in respect of which the bonus is earned; and – As regards the balance of the shares subject to it, on the first dealing day after the announcement of Dunelm’s results for the following financial year. • At least two thirds of the shares acquired (after sale of shares to cover tax and National Insurance obligations) must be retained for the duration of employment and are then subject to post-departure shareholding requirements as set out in the ’Shareholding requirements’ section on page 146. • The Committee has discretion to adjust the bonus payout upwards or downwards if it considers that the formulaic outturn does not reflect its assessment of overall financial or non-financial performance of the participant or the Group, or is inappropriate in the context of circumstances that were unexpected or unforeseen at the start of the relevant year, or is inappropriate for any other reason. MAXIMUM • In the case of Nick Wilkinson, a conditional award of 11,594 shares in Dunelm. OPPORTUNITY • In the case of Laura Carr, a conditional award of 7,675 shares in Dunelm. Annual bonus • Dividend accruals may be made in respect of special dividends paid during the vesting period applicable to an specifically for FY20 due award. to Covid-19 situation • Subject to the Committee’s discretion to override formulaic outturns, these awards will not be subject to further performance targets as they reflect the outcome of the performance targets for FY20, as set out on pages 144 to 146 of the FY20 annual report. MAXIMUM • In the case of Nick Wilkinson, a conditional award of 59,130 shares in Dunelm. OPPORTUNITY • In the case of Laura Carr, a conditional award of 40,291 shares in Dunelm. Annual bonus • Dividend accruals may be made in respect of special dividends paid during the vesting period applicable to an specifically for FY21 due award. Payment would only be made in respect of shares vesting after applying performance criteria. to Covid-19 situation • Subject to the Committee’s discretion to override formulaic outturns, for financial measures threshold performance 5% of the shares will vest and for on-target performance 40% of the maximum opportunity will be earned. Bonuses will typically be earned between threshold and on-target and between on-target and maximum on a straight-line basis. • For strategic measures and personal goals, vesting of the bonus will be determined by the Committee between 0% and 100% based on its assessment of the extent to which the relevant metrics or objectives have been met. MAXIMUM • Maximum opportunity – 125% of base salary per annum. OPPORTUNITY • Where bonus awards are granted as share awards, dividend accruals may be made in respect of special Annual bonus for FY22 dividends paid during the vesting period applicable to an award. Payment would only be made in respect of and subsequent years to shares vesting after applying performance criteria. which this Policy applies • Subject to the Committee’s discretion to override formulaic outturns, for threshold performance, for financial measures 5% of the maximum opportunity will be earned and for on-target performance 40% of the maximum opportunity will be earned. Bonuses will typically be earned between threshold and on-target and between on- target and maximum on a straight-line basis. • For strategic measures and personal goals, vesting of the bonus will be determined by the Committee between 0% and 100% based on its assessment of the extent to which the relevant metrics or objectives have been met. 144 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021