Director's Remuneration Policy

The Company’s Directors’ Remuneration Policy was approved by shareholders at the 2015 AGM. This Policy came into effect following the AGM on 12 May 2015 and will apply for a period of three years unless shareholders approve a revised Policy within that time. We have set out below the key elements of the remuneration package for our executive Directors. The complete policy as approved by Shareholders at the AGM can be found here.

Base salary

Purpose and link to strategy

To provide a core reward for undertaking the role, positioned at a level needed to recruit and retain the talent required to develop and deliver the business strategy.

Operation

The Remuneration Committee sets base salaries taking into account a range of factors including:

  • The individual’s skills, performance and experience
  • Internal relativities and wider workforce salary levels
  • External benchmark data
  • The size and responsibility of the role
  • The complexity of the business and geographical scope
  • Economic indicators

Maximum opportunity

No maximum level set.

Increases will normally be in line with the typical level of increases awarded to other employees at Standard Life and will be a reflection of the individual’s performance.

The Remuneration Committee may award increases above this level in certain circumstances.

 

Benefits

Purpose and link to strategy

To provide market competitive monetary and non-monetary benefits, in a cost effective manner, to assist employees in carrying out their duties efficiently.

Operation

Executive Directors are provided with a package of core benefits and are invited to participate, in line with other employees, in the voluntary benefits programme which they fund themselves through salary sacrifice.

Core benefits include health screening, private healthcare, death in service protection, disability benefit and reimbursement of membership fees of professional bodies.

Maximum opportunity

Car allowance up to a maximum of £16,585 per annum.

There is no maximum value of the core benefit package as this is dependent on the cost to the employing company and the individual's circumstances.

 

Pension

Purpose and link to strategy

To provide a competitive, flexible retirement benefit in a way that does not create an unacceptable level of financial risk or cost to the Group.

Operation

Executive Directors are auto enrolled into a defined contribution pension plan and are offered the alternative of a cash allowance.

Legacy arrangements will continue to be honoured.

Maximum opportunity

Employer contribution into the Group’s defined contribution pension plan of up to 32% of salary. Alternatively, a cash allowance of up to 30% of salary.

 

Group annual bonus

Purpose and link to strategy

To provide a competitive, flexible retirement benefit in a way that does not create an unacceptable level of financial risk or cost to the Group.

Operation

Performance targets are set annually by the Remuneration Committee.

The Remuneration Committee exercises its judgement to determine awards at the end of the year to ensure that the outcome is fair in the context of overall Group performance and against personal goals.

To date, 50% of any bonus above 25% of salary has been deferred into shares which vest two years from the date of award.

Having considered our bonus deferral levels in the light of regulatory direction the deferral period which will apply for bonuses in respect of 2016 onwards will be three years.

Deferred bonus shares are subject to malus between grant and vest and cash awards are subject to clawback for two years from the date of awards.

Maximum opportunity

The maximum award opportunity in respect of any financial year is based on role and is up to 175% of salary.

Performance metrics

Performance is measured against a range of key financial metrics, strategic, customer and people indicators and personal performance.

The performance scorecard is weighted with at least 50% of bonus based on financial performance and no less than 30% based on non-financial performance. A portion of the award may be based on individual performance objectives. This will be no more than 20% of the overall award.

Performance is measured over 12 months.

 

The Standard Life plc Executive Long Term Incentive Plan (Executive LTIP)

Purpose and link to strategy

To reward participants for the delivery of the Group’s goals of driving shareholder value through customer experience including measures such as cumulative Group operating profit and cumulative Group net flows.

Operation

Award of shares subject to performance measured over a three-year period with a subsequent two-year holding period. Awards may only be exercised after the combined five-year period.

Performance targets are set annually for each three-year cycle by the Remuneration Committee.

Awards are subject to review by the Remuneration Committee and the Risk and Capital Committee at the end of the three-year performance period to confirm that vesting of the award is appropriate.

Unvested awards are subject to malus.

Dividend equivalents, or equivalents for other forms of awards, accrue over the five-year period on a re-invested basis.

Maximum opportunity

The maximum award opportunity is based on role.

The maximum award possible under the plan rules is 500% salary.

Performance metrics

Vesting of the award is based on the following Group performance measures:

  • Cumulative Group operating profit performance before tax weighted at up to 100% of the award
  • Cumulative Group net flows weighted at no more than 50% of the award

The split between these measures, for each grant, is set annually by the Remuneration Committee.