Page 168 - Sigmaroc Annual-Report 2023

SIGMAROC ANNUAL REPORT 2023 GOVERNANCE REPORT
Remuneration Committee Report
POLICY REPORT
PERFORMANCE MEASURED BENEFITS
Remuneration performance measures are selected to align with the Group’s key performance indicators and the interests of Shareholders. Performance targets are set so that they are stretching to achieve maximum pay-out but also ensure excessive risk exposure is mitigated. The Remuneration Committee sets targets that are aligned with the Company’s strategy as well as both external expectations and the economic environment.
If there are changing circumstances, such as material acquisitions or changes in market conditions, the Committee retains the ability to adjust or amend performance measures and targets to ensure that they are relevant and to ensure they still incentivise whilst minimising excessive risk exposure.
BASE SALARY
Our objective is to provide a competitive base salary reflective of the skills and experience of the relevant individual. These are reviewed annually or on a significant change of responsibilities or change in market practice or a change in the size or complexity of the business. The Remuneration Committee also takes into account external market data and pay and employment conditions elsewhere in the Group and industry when considering increases to base salary levels. There are no performance criteria associated with receiving this benefit.
ANNUAL CASH BONUS
To incentivise the delivery of annual financial, strategic and safety objectives, executive directors and senior management may participate in the annual bonus scheme. The Remuneration Committee sets performance measures and targets at the start of the financial year, or later if appropriate, and based on the performance, bonuses are paid in cash shortly after the completion of the audit of the annual results.
The executives’ annual bonus arrangements are focused on the achievement of the Company’s short- and medium- term financial objectives, with financial measures selected to closely align the performance of the executive directors with the strategy of the business and with shareholder value creation. Where non-financial objectives are set, these are chosen to support the delivery of the longer-term strategic milestones and which link to those KPIs of most relevance to each director’s individual responsibilities.
For executive directors, the maximum opportunity is 125% of salary. This level of incentive opportunity reflects the Committee’s desire to retain a high proportion of remuneration on variable pay (which is not pensionable).
Financial measures will normally determine the majority or all of the bonus opportunity and the balance may be based on non-financial, strategic, personal and/or ESG-related objectives. Where possible, a graduated scale of targets is normally set for financial measures, with no pay-out for performance below a threshold level of performance.
Any payment is discretionary and will be subject to the
achievement of stretching performance targets and annual bonus may be reduced or eliminated if safety performance or accident records deteriorate or reach unacceptable levels.
PERFORMANCE SHARE PLAN
In conjunction with the acquisition of Nordkalk in August 2021, a Performance Share Plan was proposed to drive performance of the Group and delivery of the Group’s long- term objectives, aid retention of key personnel and align directors’ interests with those of Shareholders.
The PSP, together with any other share incentive plan(s), is limited to no more than 10% of the issued ordinary share capital of the Company over a ten-calendar year period.
The initial awards under the Performance Share Plan (referend to henceforth as LTIP) were made to the executive directors and certain senior management, with the allocations determined by the Remuneration Committee. The LTIP is subject to meeting EPS growth and TSR criteria, with the first vesting attainable following the financial year ended 31 December 2023.
The EPS measure is based on growth in underlying EPS over the performance period. The target range is a sliding scale set at the time of award, taking account of internal and external forecasts, to encourage continuous improvement and incentivise the delivery of stretch performance.
The TSR measure takes the total return received by the Group’s Shareholders in terms of share price growth over a three-year period and compares it with the total returns received by shareholders in companies within a predetermined and appropriate comparator group. The Remuneration Committee’s intention is to reward only TSR performance which outperforms the comparator group.
Subsequent awards may be granted by the Remuneration Committee within six weeks following the Company’s announcement of its financial results for any annual or six month period. The Remuneration Committee may also grant awards at any other time when it considers there to be exceptional circumstances which justify the granting of awards (for example, in the case of recruitment).
An employee may not receive such subsequent awards in any financial year in respect of Ordinary Shares having a market value in excess of 150% of their annual base salary in that financial year.
As a general rule, an award will lapse upon a participant’s termination of employment within the Group, with certain exceptions permissible solely at the discretion of the Remuneration Committee (death, injury, ill-health, redundancy etc).
The Performance Share Plan and the LTIP awards were approved by Shareholders at a general meeting of the Company on 2 August 2021.
NEW OPTION PLAN
In connection with the CRH Lime Acquisitions, on 4 January 2024 the Company adopted the New Option Plan (to be known as the ‘SigmaRoc plc Share Option Plan 2023’) in order to incentivise the executives and senior management of the Group and align their interests with those of Shareholders.