The Remuneration Report is presented in accordance with the relevant provisions of the UK Corporate Governance Code (the "Code") and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (the "Regulations"). In accordance with the Regulations the report is divided into two sections, unaudited and audited information. View the audited information. As outlined above, Dechra has structured this report to incorporate a number of the key principles of the new Directors' Remuneration Report regulations. For Dechra the new regulations will apply in full for the financial year ending 30 June 2014.
The Board is responsible overall for the Group's remuneration policy and the setting of the Non-Executive Directors' fees, although the task of determining and monitoring the remuneration packages of the Executive Directors and agreeing the Chairman's fee level has been delegated to the Remuneration Committee (the "Committee").
This report will be submitted for advisory vote at the 2013 Annual General Meeting.
The Committee consists exclusively of independent Non-Executive Directors and during the financial year comprised as follows:
|Dr Chris Richards*||Yes||5||5|
|Bryan Morton (resigned 9 July 2012)||Yes||0||0|
|Julian Heslop (appointed 1 January 2013)||Yes||2||2|
|Ishbel Macpherson (appointed 1 February 2013)||Yes||2||1|
* Appointed Committee Chairman on the resignation of Bryan Morton.
The Chief Executive Officer attended all meetings held during the financial year in order to assist on matters concerning remuneration of other senior executives within the Group; however, the Chief Executive Officer was not present during the part of the meetings where his own remuneration was discussed.
The Committee has its own terms of reference, which are approved by the Board. These are reviewed on an annual basis to ensure that they continue to adhere to best practice. During the 2012/2013 financial year this review took place at the June meeting. Copies can be obtained via the Company website at www.dechra.com. The Committee Chairman and the Company Secretary are available to Shareholders to discuss the remuneration policy.
The Committee is responsible for determining, on behalf of the Board, the framework of remuneration for the Executive Directors and for ensuring and reviewing the ongoing appropriateness and relevance of the remuneration policy.
In particular, the terms of reference authorise the Committee to:
- make recommendations to the Board on Executive remuneration;
- determine on behalf of the Board specific remuneration packages and conditions of employment for Executive Directors;
- determine targets for any performance related pay schemes operated by the Company; and
- determine the policy for and scope of any pension arrangements for the Executive Directors.
The Committee met five times during the 2012/2013 financial year. Members' attendance at the meetings can be found above. The table below sets out a number of the matters which were discussed (and where necessary approved) at the five meetings:
- Approval of pilot scheme of the Performance Development Review ("PDR")
- Review of benchmarking exercise
- Bonus scheme rules review
- Approval of Executive Director bonuses
- Discussion of the performance condition in respect of the LTIP granted in 2009
- Review of Committee effectiveness
- Consideration of the grant of LTIP awards and performance conditions
- Approval of grant of Approved and Unapproved Share Options to senior managers
- Proposed changes to Chief Executive Officer's remuneration package
- Proposed changes to the LTIP performance conditions
- Update on Shareholder consultation in relation to the proposed changes to Chief Executive Officer's remuneration package
- Discussion of Chief Financial Officer's proposed remuneration package and recruitment award
- Approval of amendments to LTIP performance conditions and grant of awards
- Chief Financial Officer's recruitment award
- PDR update
- Confirmation of Executive Directors' and Senior Managers' salary for 2013/2014
- Confirmation of Chairman's fees for 2013/2014
- Confirmation of Executive bonus arrangements for 2013/2014
- Arrangements for conforming to the new legislation in respect of Directors' Remuneration Report
- Review of terms of reference
- PLC Chairman's remuneration
The Committee's main advisers are set out below:
|Adviser||Areas of advice|
|Chief Executive Officer and Group HR Director||Remuneration of senior executives and senior management|
|DLA Piper (UK) LLP||Share scheme matters|
|Deloitte LLP||General remuneration and incentive arrangements for Executives and general share scheme advice|
|Calculation of satisfaction (or otherwise) of the LTIP performance conditions|
DLA Piper (UK) LLP are the Company's lawyers and Deloitte LLP provide tax and compliance advice to the Group. The nature and quantum of other services provided by DLA and Deloitte are always considered in order to ensure that no conflict of interest arises in relation to the services they provide to the Remuneration Committee.
During the year, the Committee reviewed its effectiveness as part of the overall Board evaluation process. Following the review, the Committee considered it had the necessary skills and experience to perform its responsibilities, which was strengthened by the appointment of two Non-Executive Directors during the financial year. The Board was advised of these findings.