Directors’ Remuneration Report
Annual Remuneration Report
Introduction
The Committee presents the Annual Remuneration Report, which will be put to shareholders for an
advisory (non-binding) vote at the AGM to be held on 7 May 2015. The report includes details of the
Committee, the pay received by our executive directors during the year in accordance with our prior
remuneration policy (approved on 8 May 2014) and comparative internal and external data.
The Remuneration Committee (‘the Committee’)
Composition
The members of the Committee during the year were Bob
Stack (Chairman), Carl-Peter Forster, Anita Frew, Birgit
Nørgaard and Roberto Quarta. In accordance with the UK
Corporate Governance Code, all of the non-executive directors
were regarded by the Board as independent and Roberto
Quarta was considered independent on his appointment
as Chairman of the Company.
Responsibility
The Committee determines the remuneration policy and rewards
for the executive directors and, in his absence the Chairman.
The Committee also reviews the remuneration packages of
those at the next most senior level of management and has
regard to levels of pay across the Group. A copy of the terms
of reference, which are reviewed annually, is included in the
IMI Corporate Governance Framework and available in the
corporate governance section of the IMI website.
Internal advisors to the Committee
During the year, the Committee consulted the Chief Executive,
regarding the remuneration policy and the packages of the other
executive directors and senior managers. It also received the
advice and services of the Finance Director, the Group Human
Resources Director, the Head of Group Reward and the Company
Secretary, who is also secretary to the Committee. None of these
individuals was involved in determining their own remuneration.
External advisers to the Committee
Independent remuneration consultant, Towers Watson, is
formally appointed by the Committee and provided advice
on directors’ remuneration to the Committee in 2014. Towers
Watson notified the Committee that the firm are actuaries and
administrators for the two IMI Pension Funds
1
. The Committee
is comfortable that this does not represent a conflict of interest
and that objective and independent advice continues to be
received by the Committee from Towers Watson.
During 2014, Towers Watson has also supported management
on some broader reward and human resource matters.
The fees charged by Towers Watson in respect of advice
and services to the Committee totalled £108,000 and for
support to management totalled £48,853 in 2014. Towers
Watson are signatories to the Remuneration Consultants’ Code
of Conduct in the UK and the terms of engagement with Towers
Watson are available on request from the Company Secretary.
An additional adviser was appointed and retained by the
Committee during the year. The Committee was satisfied that
all advice was objective and independent based on the terms
of engagement. The additional adviser was:
• Kepler Associates completed an incentives review and their
fees totalled £145,987 in 2014. Kepler Associates were
appointed by management to provide support on aspects
of the communication of the new arrangements.
A summary of the Committee activities during 2014
The Committee had four formal meetings during the year and
one workshop. The principal agenda items were as follows:
• a review of total compensation packages of the executive
directors and the most senior management of the Company
to ensure alignment with IMI’s new strategic growth plan;
• approval of achievements and outcomes under the
incentive plans;
• consideration of the Chairman’s fees;
• setting the framework and target levels for the 2014
incentive cycle;
• review of the long-term incentive arrangements for 2015;
• approval of the granting of share awards to other levels
of management;
• a review of the UK corporate governance environment relative
to remuneration;
• a risk review of the remuneration framework;
• review of the engagement of independent remuneration
consultants and other advisers to the Committee;
• a review of the Committee’s own performance, constitution
and terms of reference; and
• review and approval of the retirement terms for Douglas Hurt
and the recruitment terms for Daniel Shook.
1
During the year the IMI Pension Fund commenced winding up procedures and has been replaced by two new funds, IMI 2014 Deferred Fund and IMI 2014
Pensioner Fund (together ‘the Funds’).
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