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58 Tesco PLC Annual Report and Financial Statements 2013
Directors’ remuneration report continued
Corporate governance continued
Remuneration Committee activities 2012/13
The following provides a summary of the Committee’s activities during and shortly following the end of the financial year:
Meeting Standing agenda items Other agenda items
April 2012 • Review and agree payout outcomes for short-term annual bonus,
long-term PSP and share option awards for 2011/12.
• Approval of short-term bonus and long-term PSP targets for
2012/13 – 2014/15 awards.
• Sign off 2011/12 Directors’ Remuneration Report.
• AGM communication plan.
• Professional development update on
Department for Business, Innovation
and Skills (‘BIS’) shareholder voting
rights consultation.
June 2012 • Report from the Tesco Bank Remuneration Committee.
• Update on shareholder feedback on Directors’ Remuneration
Report.
• Review of Executive Director base salary and total compensation.
• Determine base salaries with effect from 1 July 2012.
• Consideration of the relationship between Executive Director and
Executive Committee reward and reward at the level below this.
• Benchmarking of Chairman’s pay against market and agreeing
his pay for 2012/13.
• Packages for new Executive Committee
members.
• Update on pension arrangements.
• Response to BIS on shareholder rights
consultation.
• Confirmed leaving arrangements for
Richard Brasher, Andrew Higginson
and David Potts.
October 2012 • Review of remuneration trends and developments in best practice.
• Review of remuneration strategy for 2013/14.
• Review approach to 2012/13 Directors’ Remuneration Report.
• Follow-up from Committee effectiveness review.
• Remuneration Committee bible.
• Response to BIS consultation.
• Professional development update on
Hermes discussion paper, FR lab project
on single figure, Kay Review and Fidelity
Principles of Ownership.
February 2013 • Review of performance against short-term annual bonus, long-term
PSP and share option awards for 2012/13.
• Review of remuneration strategy and policy for 2013/14 and review
of shareholder feedback in relation to proposed changes.
• Review of the first draft of the 2012/13 Directors’ Remuneration
Report.
• Committee effectiveness review.
• Packages for new Executive Committee
members.
• Information provided on the Company’s
HR polices for the Committee to note.
• Professional update on Association of
British Insurers (‘ABI’), ISS and NAPF
guidelines, BIS response to the Kay Review,
FR Lab project and NAPF stewardship code.
• Confirmed leaving arrangements for
Tim Mason and Lucy Neville-Rolfe.
April 2013
(Following year end) • Review and agree payout outcomes for short-term annual bonus,
long-term PSP and share option awards for 2012/13.
• Approval of short-term bonus and long-term PSP targets for 2013/14
– 2015/16 awards.
• Sign off 2012/13 Directors’ Remuneration Report.
• AGM communication plan.
Number of meetings • Normally four meetings per year.
• Four meetings were held during 2012/13.
External advisors Deloitte LLP – Appointed by the Committee.
Deloitte is one of the founding members of the Remuneration Consultants Code of Conduct and adheres to this Code
in its dealings with the Committee. The Committee is satisfied that the advice provided by Deloitte is independent.
Deloitte also provided unrelated advisory services in respect of corporate tax planning, technology consulting, risk
management, share schemes, international taxation, corporate finance and treasury to the Group during the year.
Internal advisors Jonathan Lloyd, the Company Secretary, is Secretary to the Committee.
Philip Clarke (Chief Executive of the Group) and Laurie Mcllwee (Group CFO) attend meetings at the invitation
of the Committee. They are not present when their own remuneration is being discussed.
The Committee is supported by Alison Horner (Group Personnel Director), Drew Matthews (Group Remuneration
Director) and Corporate Secretariat and Finance functions.
Terms of reference Available from the Company Secretary upon request or can be viewed at www.tescoplc.com.