Corporate governance report Remuneration continued FINANCIAL TARGET AND DELIVERY OF A COVID RECOVERY PLAN – 50% OF BONUS OPPORTUNITY The Committee considered that the targets for sales, profit, customer and colleague satisfaction and other key operational measures delivered substantial progress in the financial performance of the Company and the success of its Recovery Plan for its shareholders and its other key stakeholders, customers and colleagues. The financial targets were assessed by reference to reported statutory figures. The other targets were assessed by reference to the numerical data and a holistic consideration of the overall customer and colleague experience and operational performance. Sales and PBT (each eligible for 12.5% of bonus opportunity) Targets were set quarterly, as the economic situation changed during the pandemic, based on the Board’s quarterly forecast and external expectations applicable when the target was set. In each quarter, the Committee set a target range, in which meeting expectations of sales/PBT would deliver a score of 40%. Exceeding the sales target by 7.5% or more would deliver a 100% score, and exceeding the PBT target by 2.5% or more would deliver a 100% score. Performance against these targets was as follows: Sales Q1 Q2 Q3 Q4 Total Result £359.1m £360.4m £236.6m £380.1m £1,336.2m % of target met 100% 100% 100% 100% 100% % bonus opportunity earned 12.5% PBT % of target met 100% 0% 100% 100% adjusted %(see below) 100% 100%¹ 0%² 100% 75% % bonus opportunity earned 9.375% The Committee used its discretion to apply two adjustments to the outcome achieved in respect of the PBT target: 1. Performance against the Q2 PBT target was adjusted to remove the impact on PBT delivered of the Board’s decision to repay £14.5m received from the Job Retention Scheme in FY20, which was not taken into account when the target was set. Without this adjustment, a score of nil would have been achieved. 2. Although performance against the Q3 PBT target was met delivering a score of 100%, the Committee considered that it was inappropriate to pay bonus against a profit target in a quarter in which the Group was lossmaking. Therefore the score for this quarter was reduced to nil. The sales and PBT targets and actual PBT delivered by quarter has been excluded from the above table, as these are considered to be commercially sensitive. Customer and colleague NPS (each eligible for 6.25% of bonus opportunity) Performance against these measures was as follows: % bonus % of target opportunity Measure Target range Performance met earned Customer NPS Flat to +4% +4.2% 72.5%¹ 4.53% Colleague NPS -2% to +3% +1.0% 55% 3.44% 1. The Committee decided that although the top end of the customer NPS range was met by averaging quarterly scores, this had not been consistently achieved throughout the year, and so a deduction was applied. Operational metrics (eligible for 12.5% of bonuspportunity)o The operational metrics applicable to Nick Wilkinson were assessed as follows: % of target Measure met Free cash flow 100% Digital sales growth 50% Overall assessment against targets 75% % bonus opportunity earned 9.375% 156 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021