This report sets out the Company’s policy on directors’ remuneration for the forthcoming year, and so far as practicable, for subsequent years, as well as information on remuneration paid to directors for the financial year ended 31 December 2015. This report has been prepared in accordance with the Companies Act 2006, the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (together the Act) and the 2014 UK Corporate Governance Code (the Code).
In accordance with the Act this report has been divided into two sections: a Policy Report and an Annual Report on Remuneration. The Policy Report was put to a binding shareholder vote at the 2014 AGM and received more than 98% votes in favour with an 'Effective Date' of 7 May 2014 for the purposes of complying with the Act. In practice, however, the Remuneration Committee (herein referred to as the Committee throughout this report) applied the policy detailed below from the start of 2014 and expects to apply it throughout the three year policy period that commenced from the Effective Date. For ease of reference, the Policy Report has been represented, albeit with some changes to references and with the removal of the performance scenario charts. A copy of the original report can be found on the Company website at plc.rightmove.co.uk. The Annual Report on Remuneration will be subject to an advisory vote at the 2016 AGM. The parts of the report which have been audited have been highlighted as required by the Act.
Remuneration Policy Report (the Policy Report)
This part of the Directors' Remuneration Report sets out the remuneration policy for the Company and has been prepared in accordance with the Act. The policy has been developed after taking into account Rightmove’s pay philosophy that our executives should be rewarded with demonstrably lower than market base salaries and benefits and higher than market equity rewards contingent upon the achievement of challenging performance targets in accordance with the 'best practice' principles set out in the Code and the views of our major shareholders.
The key principles of the Committee's policy are as follows:
- Remuneration arrangements should be simple to explain, understand and administer.
- Remuneration arrangements should be designed to provide executive directors with the opportunity to receive a share in the future growth and development of the Group which is regarded as fair by both other employees and shareholders. This approach should allow the Company to attract and retain the dynamic, self-motivated individuals who are critical to the success of the business.
- Executive directors should have below market levels of base salary, minimal benefits (and only benefits which are made available on the same basis to all Rightmove employees), but with above market levels of variable pay potential. This arrangement is designed to best align the interests of the executive directors with the interests of shareholders and to reflect the performance driven culture of the Company. The Company will generally review market levels of remuneration for executive directors with the assistance of external, independent remuneration consultants and with shareholder consultation every three years.
- Having reviewed executive director remuneration against the market every three years, further changes to remuneration should be made infrequently and those changes made each year should, in most instances, be directly linked to the policies applied to all employees (specifically with regard to cost of living rises in base salary and changes in benefits).
- Executive directors should be principally rewarded for the overall success of the business for which they have collective responsibility. The Group has key short-term and medium/long-term goals and executive directors should be incentivised against these goals.
- Executive directors should not be able to gain significantly from short-term successes which subsequently prove not to be consistent with growing the overall value of the business. Hence a majority of any bonus payable in relation to short-term strategic goals is required to be taken in the form of shares in the Company which are deferred for a further two years after the bonus target has been achieved.
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