The Committee seeks to support the delivery of the Group's strategy through establishing appropriate remuneration arrangements. Our goal is to build a strong long-term sustainable business by delivering ongoing sales growth and sustainable shareholder returns through the delivery of authoritative ranges of products, colleague and service excellence, digital participation and helpful store and Autocentre environments.

Consequently, the overall Remuneration Policy of the Committee, and of the Board, is to provide remuneration packages for Executive Directors and other senior managers in the Group which:

  • Attract and retain – Enable the Group to attract and retain management of a high calibre with the necessary retail, customer service, financial, digital and service-industry skills and credentials required to deliver a sustainable business model and drive shareholder returns. Remuneration arrangements are set at levels appropriate to achieving this goal without paying more than is considered necessary. The Committee considers market data at appropriate intervals to inform the positioning of executives' pay relative to the companies of a similar size and in similar sectors, without seeking to 'match the median', to identify and mitigate the risk of losing strong performers.
  • Link variable pay to performance and the delivery of the agreed strategy – Provide management with the opportunity to earn competitive remuneration through annual and long-term variable pay arrangements that are designed to support delivery against key strategic objectives. Performance measures are aligned with strategic goals so that remuneration arrangements are transparent to executives, shareholders and other stakeholders. Different elements of executive pay are delivered over the short and longer term and are designed to ensure that a substantial proportion of the executives' remuneration is variable and performance-related.
  • Align executives with shareholders – Ensure management's interests are aligned with those of shareholders by incentivising management to deliver the Group's long-term strategy of a sustainable, growing business and thus enhance shareholder value. A significant portion of reward is delivered in shares to create alignment of interests.
  • Drive sustainable performance – Remuneration arrangements are designed to support the sustainable delivery of performance and to prevent excessive risk-taking.

Our Directors' Remuneration Policy was approved by shareholders at the 2017 AGM. The full Policy is available on the Company's website Remuneration Policy Report, but as context for the rest of this report, the main elements of the Policy, as well as how the Policy was implemented during the year, are summarised below:

ElementsObjectiveKey featuresImplementation
in FY18
in FY19
Base salaryAttract and retain talent of an appropriate calibre.Reviewed annually, with changes typically effective from October.
Maximum salary increases generally in line with wider employees.
Graham Stapleton (appointed CEO in January 2018) – £535,000
Jonny Mason – £364,140 (increased to £500,000 while acting as Interim CEO)
Jill McDonald (left the business September 2017) – £520,200
Graham Stapleton – £535,000, no change.
Chief Financial Officer – £364,140, no change.
BenefitsProvide market competitive benefits consistent with the role.Set at an appropriate level taking into account the individual's circumstances and market practice.Executive Directors received benefits including life assurance, private health insurance and a company car or equivalent allowance, to the following total values:
Graham Stapleton – £15,908 p.a.
Jonny Mason – £18,348 p.a.
Jill McDonald – £10,026 p.a.
No changes proposed.
PensionTo provide individuals with retirement arrangements.Contributions made either to defined contribution pension schemes or as an equivalent cash allowance.
Total contribution capped at 15% of salary.
All Executive Directors received cash allowances of 15% of salary.Executive Directors will receive cash allowances of 15% of salary.
Annual bonusIncentivise the achievement of annual financial targets and key strategic objectives.Maximum opportunity of 150% of salary.
One-year performance period.
One-third of any award is deferred into shares for three years.
Malus and clawback provisions apply.
Based on performance against Group PBT targets and key strategic objectives, the annual bonus paid out at 70% of maximum for Graham Stapleton and 42.3% of maximum for Jonny Mason.
Individual awards were:
Graham Stapleton – £115,802 (includes prorating for service)
Jonny Mason – £176,971 (only eligible for the cash element due to resignation)
Jill McDonald – £nil (not eligible due to resignation)
Executive Directors will have a maximum opportunity of 150% of base salary.
80% will be based on Group PBT, 20% on key strategic objectives.
One-third will be deferred into shares for three years.
Performance Share PlanAlign interests with those of shareholders by incentivising individuals to deliver the strategy, create a sustainable business and maximise shareholder returns.Maximum opportunity of 200% of salary.
Three-year performance period.
Two-year holding period after vesting (for 2018 awards onwards).
Malus and clawback provisions apply.
No Executive Director had outstanding 2015 PSP awards so there were no vesting events in respect of FY18.
Graham Stapleton and Jonny Mason were granted 2017 PSP awards over 200% of salary (the latter's award subsequently lapsed upon resignation).
Vesting dependent on performance against underlying EPS (75%) and revenue (25%) targets, with a net debt to EBITDA ratio underpin.
50% of any shares vesting subject to a one-year holding period, 50% a two-year holding period.
Executive Directors will have a maximum opportunity of 200% of salary for the 2018 PSP award.
Performance based on underlying EPS (75%) and revenue (25%) targets, with a net debt to EBITDA ratio underpin.
All shares vesting subject to a two-year holding period.
Shareholding guidelinesAlign individuals with shareholders.Executive Directors are encouraged to acquire and retain shares equal to a value of at least 200% of their salary.
Expectation that 75% of any post-tax shares that vest from incentive plans are retained until the guideline is met.
Both Executive Directors were subject to a 200% of salary shareholding guideline.
Executive Directors are expected to retain 75% of any post-tax shares that vest under any share incentive plans until this shareholding guideline is reached. There have not been any share incentive plan vestings this financial year.
Executive Directors remain subject to a 200% of salary shareholding guideline.