AGM update: changes to executive pay
What we've done about executive pay since the last AGM.
Last year we asked our members to approve the following motion:
To authorise the Remuneration Committee to simplify the incentive arrangements for the Executive by adjusting the balance and design of the annual and long-term incentives provided the total quantum that can be received for annual and long-term incentives does not exceed the amount available under the present arrangements.
Since the meeting, our Remuneration Committee has worked hard to review the element of pay which links to how our Co-op performs. In the past we’ve had two plans – one looking at performance over a year and the other looking at a three year period.
As a result of the review we have changed and simplified our approach and from 2018 we will have one Bonus Plan (“BP”) that replaces the current Annual Incentive Plan (“AIP”) and Long Term Incentive Plan (“LTIP”).
The new Bonus Plan will operate in a similar way to the current Annual Incentive Plan but with three key changes:
- The maximum opportunity increases as individuals will no longer participate in the LTIP.
- A deferral period is being introduced: not all of the award will be paid in one go - 50% will be paid 2 years later, which means we’ll still have an element which is long-term
- The current AIP profit target will be replaced by a number of measures which we believe are important to our Co-op. This goes beyond just the financial performance and will cover other areas we, and our members, think are important such as community and colleagues.
We have provided further details about our new Bonus Plan in our Remuneration Report that is part of our 2017 Annual Report and Accounts.
The changes to the Bonus Plan are in line with our 2017 AGM motions and ensure the 200% maximum opportunity in place under the old Annual and Long Term Incentive schemes remains in place.
Download the full You said, we did document for more information.