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Remuneration Committee - Terms Of Reference

Membership

  • Membership –, V Murray (Chair), R C Bailey, D C Goldie and R J Mee.  A quorum will be two members.
  • The duties and responsibilities of a member of the Remuneration Committee are in addition to those set out for a member of the Board of Directors.
  • The Remuneration Committee will appoint the Chair of the Committee.
  • Membership will be reviewed annually by the Board.

Attendance at Meetings

  • The Committee may instruct any officer or employee of the organisation to attend any meeting and provide pertinent information as necessary.  The Chief Executive will, on occasion and for matters not relating to herself, attend meetings and be consulted by the Remuneration Committee on proposals.
  • The Human Resources Director will attend meetings and be consulted by the Remuneration Committee on proposals.  Others may be called upon by prior arrangement with the Chair of the Committee.  Individuals will not participate in deliberations and decisions where they have a direct personal interest.
  • The Secretary of the Remuneration Committee will be the Reward Manager or other delegated person.

Frequency of Meetings

  • Meetings will be held a minimum of twice a year, usually on Board days, with ad hoc meetings when required.
  • The Committee Chair will convene a meeting upon the request of any Committee member who considers it necessary.

Duties

The duties of the Committee will be to:

  • recommend to the Board the strategy and policy for the remuneration of the Executive Directors and of the Executives who directly report to them.  Any such policies should be similar in approach to that which exists for the group;
  • make recommendations to the Board within these terms of reference on all elements of individual remuneration arrangements for all such Executive Directors and Executives and based on consultations with the Chief Executive and outside consultants as appropriate;
  • the remuneration of the Chairman of the Board will be agreed by the Board, excluding the Chairman himself (and similarly for the Vice Chairman).  The remuneration of other Non-Executive Directors will be agreed by the remainder of the Board, including the Chairman and Vice Chairman;
  • review the remuneration packages of comparable organisations in order to assist in determining and setting remuneration and incentive packages for all Executive Directors and Executives, thus adhering to the Society’s policy to attract and retain high quality executives by providing an overall remuneration package that is commensurate with that offered by comparable organisations;
  • seek independent legal advice in respect of the remuneration and contractual arrangements for Executive Directors, Executives and Non-Executive Directors;
  • make recommendations to the Board regarding the content of the Boards’ annual report on directors’ remuneration contained within the Report and Accounts;
  • review and make recommendations to the Board on the Society’s Pension Schemes and their funding and investment arrangements.

In so doing, the Committee will:

  • have regard to the factors identified in Section 3 of the Interim Prudential Source Book for Building Societies, e.g. ‘fit and proper’ criteria, loans to Directors, etc;
  • ensure that the Society’s Secretary shall sign off as compliant with relevant legislation, all lending facilities made available to Directors of the Society;
  • have regard to the overall level of remuneration allowed to be paid to
    Non-Executive Directors, as determined under Rule 19(1), this stating that the rate will not exceed 2 pence per one hundred pounds of total assets of the Society as at the first day of the Financial Year in which payment is made.

The Committee will also:

  • have regard to the Combined Code on Corporate Governance;
  • carry out other duties which, from time to time, may be delegated by the Board

Reporting

  • The Chair of the Committee will report on Committee business to the Board with such recommendations as the Committee may deem appropriate.
  • The Secretary will ensure fully documented minutes of Committee meetings are issued as separate minutes and distributed to all members of the Board.