41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 135
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
Implementation of the policy in 2023
Pension
The Committee is confident that the policy continues
to effectively support Unite’s short- and long-term
strategic objectives and promote management and
shareholder alignment.
Executive Directors will continue to receive a pension
scheme contribution, a cash allowance of equivalent cost to
the Company or a combination of both. With effect from 1
January 2023, total employer pension contributions will be
further reduced to an equivalent of up to 11% of salary for
both Executive Directors. This represents the final planned
reduction in Executive Director pension contribution levels
and brings both the CEO and CFO in line with the offering
available to the wider employee population.
Salaries
In summary, Executive Directors will each receive a 3.0%
salary increase with effect from 1 January 2023, with
implementation of the higher increases set out in last
year’s report delayed until a more appropriate time.
In January 2023 it had been intended that Executive
Directors would receive the second (and final) of their
phased salary increases. At its December meeting, the
Committee satisfied itself that the qualifying conditions
set out in last year’s report around continued strong
performance and personal contributions had been
achieved by each of Richard Smith and Joe Lister, and
that the planned increases would ordinarily have been
fully warranted.
Annual bonus
There will be no changes to the maximum opportunities,
performance metrics or weightings under the annual bonus
for 2023, with the Committee satisfied that the current
blend of financial and non-financial measures supports
the Group’s strategy and reinforces its values. For both the
financial and non-financial elements, targets have been set
to be challenging relative to business plan. Further details
are included on page 159.
Long-term incentives
However, noting the cost-of-living pressures facing both
colleagues and customers, Executive Directors indicated
a preference – supported by the Committee – that their
January salary increases instead be aligned with those
awarded to other senior leaders. Accordingly, salaries of
both Executive Directors have instead been increased
by 3.0% with effect from 1 January 2023, in line with the
increase for other senior management, and below the
average increase across the Group of 8.6%. In practice, the
Group has sought to target the available increase in salary
budget at those colleagues most impacted by inflationary
pressures, in particular our front-line employees, with over
95% of the workforce receiving a salary increase of 5% or
more. Unite remains committed to being an accredited Real
Living Wage employer and has implemented the rates set
by the Living Wage Foundation (8.1% in London and 10.1%
across the rest of the UK), with tiered salary increases
across the rest of the organisation.
The Committee views this as a further example of Executive
Directors’ principled leadership and commitment to
the Group’s values, in particular “Doing what’s right”.
Acknowledging the strong support received last year from
shareholders on the proposed Executive Director salaries,
and recognising that the rationale for these increases
remains valid, the Committee has resolved that it will
retain the flexibility to implement the previously-disclosed
full-year percentage increases – 10.6% for the CEO and
7.0% for the CFO – at a future date within the next 18
months. Any such increases would again be dependent
on the Committee satisfying itself of the continued strong
performance and personal contributions from both
Executive Directors.
As with the annual bonus, there will be no change to the
operation of the long-term incentive in 2023. Executive
Directors will each receive an award of up to 200% of
salary delivered through a combination of the PSP and
ESOS, with the actual award levels to be approved by the
Committee closer to the date of grant, taking into account
the share price at that time, as compared to the share
price used to determine awards over the last few LTIP
cycles. The Committee is not proposing any changes to
the performance metrics used for the 2023 LTIP, which
will continue to include the two sustainability metrics
introduced last year. Further details are included on pages
159–160.
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