UK remuneration report, consideration by directors of matters relating to remuneration, advisors

Smiths Group plc – Annual report – 31 July 2020

Industry: manufacturing

Annual Report on Remuneration (extract)

Committee members and meeting attendance in FY2020

The membership of the Committee and their meeting attendance during the year is set out on page 89 of this Report. Bill Seeger had served on a remuneration committee for at least 12 months prior to his appointment as Remuneration Committee Chair.

Sir George Buckley is absent when his own remuneration as Chairman of the Board is under consideration. The Chief Executive attends meetings of the Committee by invitation but he is not involved in the determination of his own remuneration, or present during consideration of any changes to it.

Advisers to the Committee

During the year, the Committee received material assistance and advice from the Chief Executive, the Group HR Director, the Global Reward Director, Mercer | Kepler, Deloitte LLP and Freshfields Bruckhaus Deringer LLP. The Committee’s appointed independent remuneration adviser changed from Mercer | Kepler to Deloitte LLP, following a competitive tender in 2019, with effect from 1 January 2020. The Company Secretary is secretary to the Committee.

The Company paid a total fee of £4,823 to Mercer | Kepler and £78,050 to Deloitte LLP in relation to remuneration advice to the Committee during the year. Fees were determined on the basis of time and expenses.

During FY2020, Deloitte LLP provided the Committee with information on market trends including the impact of COVID-19, compliance support for this year’s Directors’ Remuneration Report and the provision of other advice relating to remuneration governance and market practice. Deloitte LLP is a founding member of the Remuneration Consultants Group and a signatory to its Code of Conduct.

Deloitte LLP provided additional tax advisory services including global corporation tax compliance and employee mobility advice, as well as company secretarial, transaction advisory and internal audit co-source services. The Committee is satisfied that the advice provided by Deloitte LLP is objective and independent and that they do not have connections with the Group that may impair their independence.

(page 89 extract)

REMUNERATION COMMITTEE REPORT (extract)

Activities of the Committee in FY2020

Policy review

  • Implemented a number of amendments to the application of the Remuneration Policy including review of performance measures to remove duplication
  • Considered changes to institutional shareholder guidelines and the impact of these on our approach to implementation of the Policy including retirement benefit provision

Fixed pay

  • Approved FY2021 salary freeze for the Executive Directors and other Executive Committee members and no increase in fees for the Chairman
  • Reviewed and agreed a new retirement benefit policy for incumbent Executive Directors

Performance related pay

  • Considered and approved annual incentive plan payouts and set targets for the new financial year
  • Determined vesting levels for LTIP awards and agreed basis for FY2021 long-term incentive awards