Syndicate - Asset Management
REMUNERATION COMMITTEE
Constitution
The Remuneration Committee has been established by the Board as a committee of the Board.
Membership
The Remuneration Committee shall be appointed by the Board and shall comprise at least two Directors of the Company, one of whom must be a Non-Executive.
The committee is to be comprised of Company Chairman (Chairman of the Committee), the Senior Independent Director and Group Chief Executive (except in matters relating to the Group Chief Executive’s own remuneration, in which case the Group Chief Executive is precluded from voting).
The presence of two Directors shall constitute a quorum of the Committee.
Authority
The Remuneration Committee is authorised by the Board to investigate any matter within its terms of reference. It is authorised to seek any information it requires from any employee within the SAM Group and all employees are directed to co-operate with any requests made by the Remuneration Committee.
The Remuneration Committee is authorised by the Board to obtain outside professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.
Frequency of Meetings
The Remuneration Committee shall meet not less than once a year in order to review the remuneration of the Executives and Directors of the SAM Group.
Purpose
The Remuneration Committee is responsible for reviewing and recommending all the elements of the policy on the Board’s remuneration and for approving all matters relating to the remuneration of executive Directors. The purpose of the Remuneration Committee is therefore to;
Ensure that the Executive Directors and other Senior Executives within the group are fairly rewarded for their individual contribution to the overall performance of the Company; and
Demonstrate to the shareholders of the Company that the remuneration of the principal Executive Directors of the Company and other senior executives of the Company and its (“Group”) subsidiaries is set by a Committee of the Board whose members have not personal interest in the outcome of the decisions of the Remuneration Committee and who will have due regard of the interests of shareholders.
Assist the Board in drafting the explanation of how it applies the principles of Section B of the Combined Code in the Annual Report Remuneration Report Section. These being:
- to attract and retain the Director’s needed to run the Company successfully by sufficient levels of remuneration, but avoid paying more than is necessary for this purpose;
- to judge where to position their Company relative to other companies. They should be aware of what comparable companies are paying and should take account of relative performance. Caution should be exercised when using such comparisons, in view of the risk that they can result in an upward ratchet of remuneration levels with no corresponding improvement in performance;
- to be sensitive to the wider scene, including pay and employment conditions elsewhere in the Group, especially when determining annual salary increases;
- to not offer executives share options at a discount save as permitted by paragraphs 13.30 and 13.31 of the Listing Rules;
- to include performance-related elements of remuneration as set out in Schedule A to the Combined Code.
Ensure that the Company complies with Listing Rule 12.43A(c), and to assist the Board in drafting the remuneration report in accordance with Schedule B of the Combined Code.
Terms of Reference
The Remuneration Committee shall also be responsible for all elements of the remuneration of the Executives of the Company and shall make recommendations to the Board on:
The basic salary paid to Executives and any recommendations made by the Group Chief Executive of the Company for changes to that basic salary;
The remuneration and terms of employment of existing and prospective Executives of the Company;
Any bonuses or additional incentive awards to be paid to Executives and, in respect of any element of remuneration which is performance related, to formulate suitable performance related criteria and monitor their operation, and to consider any recommendations of the Group Chief Executive of the Company regarding bonuses or performance related remuneration;
All performance-related formulae relevant to the remuneration of the executives and to consider the eligibility of executives for annual bonuses and benefits under short, medium and long term incentive schemes;
All aspects of any Executive share option scheme operated by or established by the Company (subject always to the rules of that scheme and any applicable legal and stock exchange requirements) that are not covered by its own scheme rules or by the external independent trustees;
The approval of those eligible executives of SAM and SAM Group subsidiary companies to whom options should be granted;
The timing of any grant;
The number of shares over which options are to be granted;
The exercise price at which options are to be granted;
The imposition of any objective condition which must be complied with before any option may be exercised.
Disclosure of details of remuneration packages and structures in addition to those required by law or by relevant authorities;
Other benefits granted to the Executives and any recommendations of the Group Chief Executive of the Company for changes in those benefits;
The pension arrangements applicable to the Executives;
The terms of the service contracts of the Executives and any proposed changes to these contracts; and
Other matters relating to the remuneration of or terms of employment applicable to the Executive Directors and referred to the Remuneration Committee by the Board.
The Remuneration Committee shall have regard in the performance of the duties set out above to any published guidelines or recommendations regarding the remuneration of Executives of listed companies and formation and operation of share option schemes (in particular the guidelines published by the Association of British Insurers and National Association of Pension Funds) which the Remuneration Committee considers relevant or appropriate.
Reporting Procedures
The Chairman shall ensure that the recommendations of meetings are minuted and that the minutes are circulated to members of the Board;
Membership of the Committee shall be noted in the annual Directors’ Report;
The Chairman should be available to answer questions on remuneration principles and practice at Annual General Meetings of the Company.
AUDIT COMMITTEE
Constitution
The Audit Committee has been established by the Board as a committee of the Board.
Membership
The members of the Audit Committee shall be appointed by the Board and shall comprise at least three of the Directors of the Company, one of whom must be a Non-Executive.
The Committee is to be comprised of: two Non-Executive Directors (one being the Chairman of this Committee) and one Executive Director. At least one member of the Audit Committee should have recent relevant financial knowledge;
the presence of two Directors (one being Non-Executive) shall constitute a quorum of the Committee.
Authority
The Committee is authorised by the Board to investigate any activity within its terms of reference. It is authorised to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
The committee is authorised by the Board to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.
Frequency of Meetings
Meetings shall be held not less than once a year but, ideally, twice. The external auditors may request a meeting if they consider that one is necessary.
Purpose
The Audit Committee assists the Board in fulfilling its oversight responsibilities, primarily in reviewing and reporting financial and non-financial information to shareholders, systems of internal control and risk management and the audit process.
Terms of Reference
The duties of the Committee shall be:-
to consider the appointment of advisers, external auditors, audit fees, and any questions of resignation or dismissal;
to discuss with external auditors before the audit commences the nature and scope of the audit and ensure co-ordination where more than one audit firm is involved;
to review the half-year and annual financial statements before submission to the Board, focusing particularly on:-
- any changes in accounting policies and practices;
- major judgmental areas;
- significant adjustments resulting from the audit;
- the going concern assumption;
- compliance with accounting standards;
- compliance with legal requirements and relevant authorities’ guidelines;
to discuss problems and reservations arising from any interim audit and the final audits, and any matters the auditors may wish to discuss (in the absence of management where necessary);
to review the external auditor’s management letter and management’s response;
to approve the internal audit plans and arrangements;
to review internal audit reports and ensure all recommendations are discussed and implemented as appropriate;
to review the Company’s statement on internal control systems prior to endorsement by the Board;
to generally review the scope and results of the audit and its cost effectiveness and the independence and objectivity of the auditors;
to consider the major findings of internal investigations and management response;
to review and approve plans and arrangements recommended by the Group’s Officers in charge of risk/compliance and money laundering (where appropriate);
to review and approve plans, reports and arrangements made by the Group’s Compliance Committee and ensure adequate follow up, including monitoring of the Compliance functions within the Group;;
to consider other topics as defined by the Board.
Reporting Procedures
The Chairman shall ensure that the recommendations of the meetings are minuted and that the minutes are circulated to members of the Board.
Membership of the Committee shall be noted in the annual Directors’ Report.
The Chairman should be available to answer questions on the operation of the Committee at Annual General Meetings of the Company.