41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 146
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THE UNITE GROUP PLC | Annual Report and Financial Statements 2022
REMUNERATION COMMITTEE continued
Notes to the policy table
The Committee is satisfied that the above Remuneration
Policy is in the best interests of shareholders and does not
promote excessive risk-taking.
For the avoidance of doubt, in approving this Directors’
Remuneration Policy, authority is given to the Company
to honour any commitments entered into with current or
former Directors (such as the vesting or exercise of past
share awards).
Performance measure selection
and approach to target setting
Measures used under the Annual bonus and LTIP are
selected annually to reflect the Group’s main short- and
long-term objectives and reflect both financial and nonfinancial priorities, as appropriate.
The Committee considers that EPS (currently used in both
the short- and long-term incentive) is an objective and wellaccepted measure of the Company’s performance which
reinforces the strategic objective of achieving profitable
growth, whilst a focus on Total Accounting Return (also
currently used in both the short- and long-term incentive)
is consistent with one of our stated objectives and a key
indicator of Company performance in the real estate sector.
The use of relative TSR is strongly aligned with shareholders
and ensures that executives are rewarded only if they
exceed the returns which an investor could achieve
elsewhere in our sector. Finally, from 2022, the Committee
has increased the overall weighting on sustainability metrics
across variable incentives in order to support and reinforce
the Group’s strategy in this area.
All employees are eligible to participate in the Company’s
SAYE scheme on the same terms.
Shareholding guidelines
The Committee continues to recognise the importance
of Executive Directors aligning their interests with
shareholders through building up a significant shareholding
in the Company. Shareholding guidelines are in place that
require Executive Directors to acquire a holding (excluding
shares that remain subject to performance conditions)
equivalent to 250% of base salary for the Chief Executive
and 200% of base salary for each of the other Executive
Directors. Details of the Executive Directors’ current
shareholdings are provided in the Annual Report on
Remuneration.
In order to provide further long-term alignment with
shareholders and ensure a focus on successful succession
planning, Executive Directors will normally be expected
to maintain a holding of Unite shares for a period after
their employment as a Director of the Group. This “postexit” shareholding guideline will be equal to the lower of a
Directors’ actual shareholding at the time of their departure
and the shareholding requirement in effect at the date of
their departure, with such shares to be held for a period of
at least two years from the date of ceasing to be a Director.
The specific application of this shareholding guideline will
be at the Committee’s discretion.
Targets applying to the Performance Related Annual Bonus
and LTIP are reviewed annually, based on a number of
internal and external reference points. Performance targets
are set to be stretching but achievable, with regard to the
particular strategic priorities and economic environment in
a given year. Under the bonus, target performance typically
requires meaningful improvement on the previous year’s
outturn, and, for financial measures, targets are typically
set with reference to market consensus.
In order to monitor and enforce the post-exit shareholding
requirement, the Committee has established an internal
policy document detailing which shares are covered,
the valuation methodology, the holding mechanism and
any discretions available. In summary, this post-exit
requirement will apply to any LTIP awards or deferred
bonus share awards granted on or after 9 May 2019
(being the date of approval of the 2019 Policy), with shares
deposited into a Nominee Account until such time that the
required post-exit shareholding level has been achieved
(calculated annually). Shares held in the Nominee Account
will generally be held for a period of not less than 2 years
from the date an individual ceases employment as a
Director of the Group.
Remuneration Policy for other employees
Malus and clawback
Unite’s approach to annual salary reviews is consistent
across the Group, with consideration given to the level of
experience, responsibility, individual performance and
salary levels in comparable companies. The Company is a
fully accredited Living Wage employer.
Awards under the Performance Related Annual Bonus and
the LTIP are subject to malus and clawback provisions which
can be applied to both vested and unvested awards. Malus
and clawback provisions will apply for a period of at least
two years post-vesting. Circumstances in which malus and
clawback may be applied include a material misstatement
of the Company’s financial accounts, gross misconduct on
the part of the award-holder, error in calculating the award
vesting outcome and, from 2019 awards onwards, corporate
failure as determined by the Remuneration Committee.
In terms of variable incentives, all employees are eligible
to participate in an annual bonus scheme with business
area-specific metrics incorporated where appropriate.
Senior managers are eligible to participate in the LTIP with
annual awards currently up to 100% of salary. Performance
conditions are consistent for all participants, while award
sizes vary by level. Specific cash incentives are also in place
to motivate, reward and retain staff below Board level.
