A FTSE250 Company Secretary writes...
- With reference to the Code’s requirement for Remco to have delegated responsibility for setting the remuneration for senior management (senior management being defined as the first layer of management below board level) how far does this level extend in your organisation and how much actual authority do Remco have in setting the levels, versus an oversight role only?
- We extend the MAR close period share dealing restriction to all employees, not just our PDMRs. How many companies also do this, and how many apply it to PDMRs or PDMRs and Restriction Persons only?
1. We interpret “senior management” literally in accordance with the Code and therefore is limited to the small group of people (about a dozen) who report directly to an executive director. This cadre of people have their remuneration set by the Rem Com – i.e. salary, incentives and other benefits are approved by the committee. Below this level the committee has an “oversight” role, as per the Code.
2.. We do not apply the share dealing restrictions any wider than required by law. What is the point of preventing people from dealing in shares when they (and their employer) can lawfully do this.
1 – they are asked to review pay of new starters at Exec level and ongoing pay reviews and bonuses
2 -We apply this to our PDMRs and a permanent list of insiders comprising the CEO’s team and PAs, and Finance involved in preparing the group accounts.
Q1 – We deem the level of management below Board level to be members of our executive management committee, who each run different functions within our business and report to the CEO. While the CEO (and CFO) formulate proposals for the remuneration of these individuals, approval is sought for such proposals from our RemCo and the RemCo scrutinises quite closely those proposals.
Q2. Under our company Share Dealing Code we apply MAR (and company) closed periods to both PDMRs and to restricted persons. All other employees are covered by our Share Dealing Policy which prohibits dealings if an individual is in possession of inside information.
1. Remco sets the remuneration for the CEO’s direct reports, which includes the Co Sec. Otherwise the Remco has a wholistic view of rem across the organisation for context purposes, and is made aware eg of proposed inflationary pay awards (which are applied to everyone) but not individual arrangements.
2. We apply a “close period” to PDMRs (which are just the board including two EDs), and to a list of restricted persons eg the Operating Board, certain senior managers, and the Finance team.