RBS 2011 Annual Report Download - page 276

274 RBS Group 2011
Report of the Group Remuneration Committee
The role and responsibilities of the Group Remuneration Committee
The Group Remuneration Committee is responsible for setting the
Group’s policy on remuneration and overseeing its implementation. It
considers and makes recommendations to the Group Board in respect of
the remuneration arrangements of the executive directors of the Group.
No director is included in decisions regarding his or her own
remuneration.
The Group Remuneration Committee is also responsible for approving
remuneration and severance arrangements for members of the Group’s
Executive and Management Committees, as well as overseeing
arrangements for employees who are ‘In-Scope’ under the Asset
Protection Scheme (APS) or ‘Code Staff’ under the FSA Remuneration
Code. Details of the FSA Remuneration Code can be found at
www.fsa.gov.uk and a definition of Code Staff is provided on page 279.
The terms of reference of the Group Remuneration Committee are
available on the Group’s website www.rbs.com and these are reviewed
annually by the Committee and approved by the Group Board.
Membership of the Group Remuneration Committee
All members of the Committee are independent non-executive directors.
The Committee held nine meetings in 2011. The Chair and members of
the Committee, together with their attendance at meetings, are shown
below:
Attended /
Scheduled
Penny Hughes (chair) 9/9
Sandy Crombie 9/9
Alison Davis (1) 4/4
John McFarlane (2) 9/9
Notes:
(1) Became a member of the Committee on 1 August 2011.
(2) Will step down as a member of the Committee on 31 March 2012.
Enhanced governance
The Group Remuneration Committee has taken a number of steps during
2011 to enhance its governance arrangements:
xAlison Davis was appointed as an additional member to bring further
financial experience and fresh expertise;
xprivate sessions are held at each Committee meeting with only the
Group Chairman and non-executive directors present;
xastrategy session is carried out to ensure agendas focus on key
issues in relation to remuneration;
xreporting between the Committee and the Group Board has been
improved so that all directors are fully informed and able to discuss
the approach being taken; and
xgreater focus was placed on international regulatory compliance as
requirements emerge across the territories in which we operate.
Principal activity of the Group Remuneration Committee during 2011
First quarter
xnew arrangements for the executive directors. Following extensive
shareholder consultation and consideration by the Committee,
Share Bank arrangements and new long term incentive plans (LTIP)
performance measures were introduced;
xremuneration arrangements and year-end performance reports for
members of the Executive Committee, Management Committee and
annual performance objectives for 2011 and also LTIP performance
objectives;
xremuneration arrangements and year-end performance reports for
APS In-Scope employees and Code Staff;
xnew process for divisional bonus pools implemented with advice
from the Board Risk Committee on risk performance;
xprogress against unvested LTIP performance measures;
xapproval of the Group and divisional bonus pools; and
xapproval of Directors’ remuneration report.
Second quarter
xkey business and strategic priorities; presentations from Non-Core,
RBS Insurance and GBM;
xproject to enhance risk input into remuneration; and
xformal remuneration strategy session - compensation structure and
priorities for the forthcoming year were agreed.
Directors’ remuneration report continued