Report of the Remuneration Committee
The Remuneration Committee meets at least once a year to review the remuneration of the Executive Directors and approve policies for remuneration of other senior executives. The Committee also monitors performance and approves the payment of all performance related bonuses and administers the operation of the share option and share incentive schemes established by the Group.
The Committee is chaired by Susan Lewis and comprises Susan Lewis, John Wheatley, Mark Chambers and Alan Hudson.
Alan Hudson does not participate in any discussions in which he has an interest.
Directors’ remuneration report
This Report describes how the Board has voluntarily applied the Principles of Good Governance relating to Director’s remuneration. The report also provides the information required to be reported on Directors’ remuneration under AIM Rule 19.
The policy is to provide remuneration packages for executive directors which aim to attract and retain high quality executives capable of achieving the Group’s objectives and thereby enhance shareholder value. The performance measurement of the Executive Directors and key members of senior management and the determination of their annual remuneration package is undertaken by the Committee.
The remuneration of the Non-Executive Directors is determined by the Board of Directors.
The following comprises the components of the remuneration of all Executive Directors:
The base salaries of the executive directors are set at levels considered to be appropriate when they enter into service agreements with the Group. The base salaries are reviewed by the Remuneration Committee annually and any increases are awarded having regard to performance and salary levels in comparable organisations.
Annual performance related payments
It is the policy of the Company to operate bonus arrangements for the Executive Directors which are performance related, the primary measures being the achievement of financial targets and personal performance.
Benefits in kind
A range of taxable benefits are available to Executive Directors. These benefits primarily comprise the provision of company pension contribution, life assurance and private medical insurance.
Share option schemes
The Company has established approved and unapproved share option schemes, in which the executive directors may participate. Details are set out in note 15 to these financial statements.
The group pays a defined contribution to the pension scheme of certain executive directors. The individual pension schemes are private and their assets are held separately from those of the Group.
Executive Directors’ contracts
Executive directors are employed under service contracts requiring a maximum of 12 months’ notice by the company.
Non-Executive Directors’ contracts
The Chairman and the non-executive directors each receive a fee for their services under appointment letters which are for an initial period of 12 months and thereafter terminable by 3 months’ notice from either party. The fee is approved by the Board, mindful of the time commitment and responsibilities of their roles and of current market rates for comparable organisations and appointments. The non-executive directors and the Chairman are reimbursed for travelling and other minor expenses incurred.
Interest in options
The Group operates the Share Option Plan by which certain of the Executive Directors and other senior executives are able to subscribe for ordinary shares in the Company. The interests of the directors were as follows:
Directors’ beneficial interest in the Ordinary shares of the Company (which included those of their families) were as follows:
Directors’ shareholdings include any shareholdings of trusts or family members deemed to be connected persons.
Movements during the year are detailed in note 15.
The mid-market price of the shares at 31 October 2016 was 165p. The range during the year was 158p to 198p.
During the year A Hudson purchased 100 B shares in AFH Group Limited for £3,333 under a Group growth share scheme. These shares can be converted into 100,000 equity share options after three years subject to certain performance conditions and have been shown as movements during the year in the table above. Any shares that do not meet the performance criteria are cancelled after three years. P Wright, A Broad and A Larvin each purchased 60 B shares in AFH Group Limited for £ 2,000 under a Group growth share scheme. These shares can each be converted into 60,000 equity share options after three years subject to certain performance conditions and have been shown as movements during the year in the table above. Any shares that do not meet the performance criteria are cancelled after three years.
No Director had any other beneficial interest at the year end in the shares of any other Group Company.
This report was approved by the Board of Directors on 27 January 2017 and signed on its behalf by:
27 January 2017