41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 157
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
Relative importance of spend on pay
The table below shows shareholder distributions (i.e. dividends and share buybacks) and total employee pay expenditure for
the financial years ended 31 December 2021 and 31 December 2022, along with the percentage change in both.
2022
£m
2021
£m
% change
2021–22
Total employee pay expenditure
65.8
65.0
1.2%
Distributions to shareholders
96.4
68.0
41.8%
Distributions to shareholders reflects actual payments made during the relevant financial year. Employee remuneration
excludes social security costs.
Relationship between the remuneration of the CEO and all employees
There is strong alignment between the Company’s approach to remuneration for Executive Directors and other employees
(see page 137 for details).
Consistent with previous years, given the significant undertaking required to calculate the single figure of remuneration
for all UK employees, the Committee opted to use data already available from the gender pay reporting as the basis for
identifying employees at P25, P50 and P75 (“Option B”). We believe this provides a reasonable estimate for employees’ pay at
these levels within the organisation. Further details on the specific steps used in calculating the above ratios are as follows:
•
We used the most recent gender pay gap data from 5 April 2022 to rank the hourly rates of all UK employees. From this
initial ranking we identified those individuals positioned at P25, P50 and P75, as well as the immediate employees either
side of P25, P50 and P75.
•
Employees selected as P25, P50 and P75 were checked to confirm that they were employed for the whole of the 2022
financial year.
•
Total FTE remuneration for each of these individuals was then calculated to 31 December 2022 on the same basis as used
in the single figure table for our CEO. All figures are total amounts paid to full-time employees covering the whole 2022
financial year. Overtime pay, where received during the year, has been excluded so that the figures are comparable with
the Chief Executive.
•
In reviewing the employee pay data, the Committee is comfortable that the P25, P50 and P75 individuals identified
appropriately reflect the employee pay profile at those quartiles, and that the overall picture presented by the ratios is
consistent with our pay, reward and progression policies.
The Committee notes that the statutory CEO pay ratios have largely fallen in 2022 as compared to 2021, with the ratio of CEO
total remuneration to the median employee, for example, moving from 56:1 to 33:1. This change reflects both a c.39% fall in
the CEO’s single figure of remuneration – driven primarily by the lower bonus outcome for 2022 and the nil estimated vesting
under the 2020 LTIP – and a c.2% increase to the equivalent employee figure.
Reflecting that a significant proportion of the CEO’s remuneration is linked to Group performance and share price
movements over the longer-term – and as a result that changes in the headline ratios may be volatile – the Committee
also reviews ratios for salary and salary plus annual bonus. Participation in the Group’s long-term incentives is currently
limited to c.50 senior leaders, with none of the individuals identified as P25, P50 and P75 in this group. On the other hand,
the significant majority of our employees are eligible to participate in annual bonus arrangements – and so the Committee
considers this ratio, as well as the ratio comparing just salaries, to provide helpful additional context. Having reviewed these
additional data points, the Committee is satisfied that the fluctuation in the headline ratios this year reflects appropriate
differences in the structure of remuneration at different levels of seniority.
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