41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 145
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
Function
Operation
Opportunity
Performance metrics
LTIP
The LTIP comprises a
Performance Share Plan (PSP)
and an Approved Employee
Share Option Scheme (ESOS).
The LTIP provides for an award up to a
normal aggregate limit of 200% of salary
for Executive Directors, with an overall
limit of 300% of salary in exceptional
circumstances. The current intention is
to grant each Executive Director awards
equivalent to 200% of salary.
Vesting of LTIP awards
is subject to continued
employment and
performance against
relevant metrics measured
over a period of at least
three years. The Committee
will select performance
measures ahead of each
cycle to ensure that they
continue to be linked to the
delivery of the Company
strategy.
To drive sustained
long-term
performance that
supports the creation
of shareholder value.
The ESOS is used to deliver a
proportion of the LTIP in a taxefficient manner, and is subject
to the same performance
Awards may include a grant of HMRC
conditions as awards made
approved options not exceeding £6k per
under the PSP.
annum, valued on a fair value exchange.
Award levels and performance
conditions are reviewed before
each award cycle to ensure
they remain appropriate and
no less stretching than the
first cycle.
Awards under the LTIP are
subject to malus and clawback
provisions, further details of
which are included as a note to
the policy table.
A payment equal to the value of
dividends which would have accrued on
vested shares will be made following the
release of awards to participants, either
in the form of cash or as additional
shares. It is the Committee’s current
intention to make any future dividends
payments in the form of shares.
Under each measure,
threshold performance
will result in up to 25%
of maximum vesting for
that element, rising on a
straight-line to full vesting.
If no entitlement has been
earned at the end of the
relevant performance
period, awards will lapse. A
proportion of vested awards
may, at the discretion of the
Committee, be subject to a
holding period following the
end of a three-year vesting
period. The Committee’s
current intention is that all
awards will be required to be
held for an additional twoyear period post-vesting.
As under the Performance
Related Annual Bonus,
the Committee has
discretion to adjust the
formulaic LTIP outcomes
to ensure alignment of
pay with performance, i.e.
to ensure the outcome
is a true reflection of
the performance of
the Company.
Details of the measures and
targets to be used for 2023
LTIP awards are included
in the Annual Report on
Remuneration on page 160.
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