Corporate governance report Remuneration continued APPROACH TO RECRUITMENT REMUNERATION In addition, on hiring an external candidate the Committee The Remuneration Committee will apply the principles set may make arrangements to buy out remuneration that the out below when agreeing a remuneration package for a individual has forfeited on leaving a previous employer. The new Director (whether an external candidate or an internal Committee will generally seek to structure buyout awards promotion). The package must be sufficient to attract and and payments on a comparable basis to remuneration retain the high-calibre talent necessary to develop and deliver arrangements forfeited. These awards or payments are the Company’s strategy: excluded from the maximum level of variable pay referred • No more should be paid than is necessary. to in the policy tables; however, the Committee’s intention is that the value awarded or paid would be no higher than the • Pension provision will be in line with the policy. expected value of the forfeited arrangements. • The Committee reserves the discretion to make appropriate remuneration decisions outside the standard policy to In order to implement the arrangements described, the meet the individual needs of the recruitment provided the Committee may rely on the exemption in Listing Rule 9.4.2, Committee believes the relevant decisions are in the best which allows for the grant of share or share option awards interests of the Company. to facilitate, in unusual circumstances, the recruitment of a Director. Circumstances in which the Committee might apply this discretion include: The Committee does not intend to use any discretion in • Where an interim appointment is made on a short-term this section to make a non-performance-related incentive basis, including where the Chairman or another Non- payment (for example a ‘golden hello’). Executive Director has to assume an Executive position. On the appointment of a new Chairman the fee will be • Where employment commences at a time in the year when set taking into account the experience and calibre of the it is inappropriate to provide a bonus or share incentive individual and pay for similar roles in companies of similar award as there is insufficient time to assess performance, size and complexity in the market. All other Non-Executive the quantum for the subsequent year might be increased Directors receive the same base and Committee Chair fees, proportionately instead. which are set at median or below. No share incentives or • An Executive is recruited from a business or location performance-related incentives would be offered. that offered benefits that the Committee considers it appropriate to ‘buy out’ but cannot do so under the specific LEGACY REMUNERATION ARRANGEMENTS terms of the Regulations, or which the Committee considers The Committee reserves the right to make remuneration it appropriate to offer. payments and payments for loss of office (including exercising any discretion available to it in connection with any such Examples of remuneration decisions that the Committee may payment) notwithstanding that they are not in line with the make are set out below: Policy set out above where the terms of payments were agreed: • It may be approriate to offer a lower salary initially, with ap • Before the Policy came into effect (provided that, in the series of increases to reach the desired salary over a period case of any payments agreed on or after 11 November 2014 of time, subject to performance. they are in line with any applicable shareholder approved • The Committee may also alter the performance criteria Directors’ remuneration policy in force at the time they were applicable to the initial annual bonus or LTIP award so agreed or were otherwise approved by shareholders); or that they are more applicable to the circumstances of • At a time when the relevant individual was not a Director the recruitment. of the Company (or other person to whom the Policy set • An internal candidate would be able to retain any out above applies) and, in the opinion of the Committee, outstanding variable pay awarded in respect of their the payment was not in consideration for the individual previous role that pays out in accordance with its terms becoming a Director of the Company (or other such of grant. person). • Appropriate costs and support will be provided if the recruitment requires the relocation of the individual. For these purposes, ‘payments’ includes the satisfaction of variable remuneration and, in relation to an award over The maximum level of variable pay that could be awarded shares, the terms of the payment are ‘agreed’ no later than to a new Executive Director in the first year of employment, the time the award is granted. excluding any buyout arrangements, would normally be in line with the policy table set out from page 142. The Committee would explain the rationale for the remuneration package in the next Annual Report of the Company. 152 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021