Corporate governance report Remuneration continued ALL EMPLOYEE SHARE PLAN (SHARESAVE) PURPOSE AND • Promotes share ownership by all eligible colleagues (including Executive Directors). LINK TO STRATEGIC OBJECTIVES OPERATION • All UK employees with a minimum service requirement are eligible to join the UK tax-approved Dunelm Group Savings Related Share Option Plan (the Sharesave). • Monthly savings are made over a period of three years linked to the grant of an option over Dunelm shares at a discount of up to 20% of the market price (or such other amount as permitted by law) at the date of invitation to join the plan. • Invitations are normally issued annually at the discretion of the Remuneration Committee, which also has discretion to set the minimum service requirement, maximum discount, maximum monthly savings and any other limits (such as scaling back) within the terms of the scheme rules. MAXIMUM • Maximum participation limits are set by the UK tax authorities. Currently the maximum limit is savings of £500 OPPORTUNITY per month. PERFORMANCE • None. METRICS SHAREHOLDING REQUIREMENTS SHAREHOLDING REQUIREMENTS FOLLOWING To align the interests of Executive Directors with those TERMINATION OF EMPLOYMENT of shareholders and to promote long-term thinking, the Following termination of their employment for any reason, Committee has adopted shareholding requirements which an Executive Director must retain for two years shares equal apply both during employment and for a period following to the lower of the shareholding requirement applicable employment, as set out below (although the Remuneration immediately prior to departure (100% of salary if they leave Committee retains the right to waive this requirement in within five years of appointment or 200% of salary if they exceptional circumstances, such as death, divorce, ill health leave five years or more after appointment) as appropriate or or severe financial hardship). their actual shareholding on departure. This is a contractual requirement set out in each Director’s service contract. The SHAREHOLDING REQUIREMENTS DURING Company also reserves the right to require share certificates EMPLOYMENT to be lodged in its custody. • Executive Directors are expected to make a personal investment in Dunelm shares on appointment as an RECOVERY PROVISIONS (MALUS AND CLAWBACK) Executive Director (subject to closed periods). The annual bonus (including any granted as a share award) • Executive Directors are required to build a beneficial and LTIP are subject to recovery provisions as set out below. holding of shares equal to 100% of salary after three years and 200% of salary after five years from appointment. Malus provisions apply which enable the Committee to • At least two thirds of shares acquired pursuant to the determine before the payment of an annual bonus or the vesting of share awards in respect of FY20, FY21 and any vesting of an LTIP award, that the bonus opportunity or LTIP other year in respect of which the bonus is satisfied by a award may be cancelled or reduced. share award as referred to on pages 143 to 145 (after sale of shares to cover tax and National Insurance obligations) Clawback provisions apply which enable the Committee to must be retained during employment. determine for up to three years following the payment of a • Two thirds of any cash bonus earned (after tax and National cash bonus or the vesting of an LTIP award or for three years Insurance obligations have been met) must be invested after the end of the performance period for a share award in Dunelm shares, which must then be retained during granted in respect of a bonus, that the amount of the bonus employment. paid may be recovered and the LTIP or share bonus award may be cancelled or reduced (if it has not been exercised) or • All of the shares acquired pursuant to the vesting of any LTIP recovery may be applied to it (if it has been exercised). award granted after 1 July 2020 (after sale of shares to cover tax and National Insurance obligations) must be retained The malus and clawback provisions may be applied in the for two years, and two thirds of those shares must then be event of: retained during employment. • A material misstatement of any Group company’s financial • The relevant shares must be retained regardless of whether results; the Executive Director has achieved the required 100% or • A material error in assessing a performance condition 200% of salary shareholding, therefore building to a higher applicable to the award or in the information or personal shareholding level over time. assumptions on which the award was granted or vests; 146 DUNELM GROUP PLCANNUAL REPORT & ACCOUNTS 2021