REMUNERATION COMMITTEE

Transcription

1 8 December 2015

2 REMUNERATION COMMITTEE References to the Committee shall mean the Remuneration Committee. References to the Board shall mean the Board of Directors. Reference to the Code shall mean The UK Corporate Governance Code 1 1. Membership 1.1. The Committee shall comprise at least three members, all of whom shall be independent non-executive directors. The Chairman of the Board may also serve on the Committee as an additional member if he or she was considered independent on appointment as Chairman. 2 Members of the Committee shall be appointed by the Board, on the recommendation of the Nominations Committee and in consultation with the Chairman of the Committee Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chief Executive, Chief Financial Officer, the head of human resources and external advisers may be invited to attend for all or part of any meeting as and when appropriate and necessary Appointments to the Committee shall be for a period of up to three years which may be extended for no more than two further periods of up to three years, so long as members (other than the Chairman of the Board, if he or she is a member of the Committee) continue to be independent The Board shall appoint the Committee Chairman who shall be an independent non-executive director. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the relevant meeting who would qualify under these terms of reference to be appointed to that position by the Board. The Chairman of the Board shall not be Chairman of the Committee. 2. Secretary The Company Secretary or his or her nominee shall act as the Secretary of the Committee and will ensure that the Committee receives information and papers in a timely manner to enable full and proper consideration to be given to its business. 3. Quorum 3.1. The quorum necessary for the transaction of business shall be three. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee The members of the Committee may meet for the despatch of business, adjourn and otherwise regulate meetings as they think fit. Without prejudice to the foregoing, all or any of the members of the Committee may participate in a meeting of the Committee by means of a conference telephone or any communication equipment which allows all persons participating in the meeting to hear each other. A member of the Committee so participating shall be deemed to be present in person at the meeting and shall be entitled to fully participate and be counted in the quorum accordingly. 4. Meetings 4.1. The Committee shall meet at least three times a year and otherwise as required The members of the Committee shall, at the beginning of any meeting, declare the existence of any conflicts of interest arising in relation to the matters to come before such meeting and the Secretary of the Committee shall minute them accordingly. 5. Minutes of Meetings 5.1. The Secretary of the Committee shall minute the proceedings and resolutions of all Committee meetings including the names of those present and in attendance. 1 September 2014, applicable to the Company's accounting period beginning 1 January Code provision D Code Supporting Principal B.1. 4 The frequency and timing of meetings will differ according to the needs of the Company, meetings should be organised so that attendance is maximised (for example by timetabling them to coincide with Board meetings). Page 1 of 4

3 5.2. Draft minutes of Committee meetings shall be circulated promptly to all members of the Committee. Once approved, minutes should be circulated to all other non-executive directors and, at the discretion of the Committee Chairman, to other members of the Board unless in the opinion of the Committee Chairman it would be inappropriate to do so Minutes of Meetings 6.1. The Secretary of the Committee shall minute the proceedings and resolutions of all Committee meetings including the names of those present and in attendance Draft minutes of Committee meetings shall be circulated promptly to all members of the Committee. Once approved, minutes should be circulated to all other non-executive directors and, at the discretion of the Committee Chairman, to other members of the Board unless in the opinion of the Committee Chairman it would be inappropriate to do so Annual General Meeting 7.1. The Committee Chairman should attend the Annual General Meeting of the Company to answer any shareholder questions on the Committee s activities Duties The Committee should carry out the duties set out below for the Company, its subsidiary undertakings and the group as a whole, as appropriate. The Committee shall: 8.1. Have responsibility for setting the remuneration policy (which shall be submitted to the Company s shareholders for a binding vote every three years or as often as required by applicable legislation) for all executive directors and the Company s Chairman, including pension rights and any compensation payments. 8 The Board itself or, where required by the Company's Articles of Association, the shareholders should determine the remuneration of the non-executive directors within the limits set in the Company's Articles of Association. 9 No director or senior manager shall be involved in any decisions as to their own remuneration Recommend and monitor the level and structure of remuneration for the group's senior management In determining the remuneration policy, and particularly when determining annual salary increases for directors, take into account all factors which it deems necessary, including relevant legal and regulatory requirements, the provisions and recommendations of the UK Corporate Governance Code and associated guidance and have regard to pay and employment conditions across the Company or Group. 12 The objective of such policy shall be to promote the long-term success of the Company without paying more than is necessary 13, having regard to views of shareholders and other stakeholders 14. The remuneration policy should have regard to the Company s risk appetite and risk management strategy and be aligned to the Company s long term strategic goals. Performance-related elements should be transparent, stretching and rigorously applied Review the ongoing appropriateness and relevance of the remuneration policy Within the terms of the remuneration policy and in consultation with the Company Chairman and/or Chief Executive as appropriate, determine the total individual remuneration package of each executive director, the Company Chairman and other designated senior executives including bonuses, incentive payments and share options or other share awards (including the buying out of any share options or awards held by the individual in their previous employment) FRC Guidance on Board Effectiveness, paragraph FRC Guidance on Board Effectiveness, paragraph Code Provision E Code Provision D.2.2 and, in respect of the design of performance related remuneration for executive directors, Schedule A 9 Code Provision D Code Principle D Code Provision D.2.2. The definition of senior management for this purpose should be determined by the Board but should normally include the first layer of management below Board level. 12 Code Supporting Principle D Code Supporting Principle D.1 and Schedule A 14 Code Principle D.1 15 Code Principle D Code Principle D.2 Page 2 of 4

4 8.6. To help it fulfil its obligations and to enable it to judge where to position the Company relative to other companies, 17 the Committee shall have full authority to appoint remuneration consultants 18 and to commission or purchase any reports, surveys or information which it deems necessary, at the expense of the Company but within any budgetary restraints imposed by the Board Be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the Committee Review the design of Tullow s share incentive plans and any performance-related remuneration scheme for executive directors and designated senior executives and recommend any changes for approval by the Board and the Company s shareholders Review and approve calculations of corporate performance measures used in the calculation of awards under any relevant performance-related remuneration scheme Review and approve performance-related remuneration awards made to executive directors and designated senior executives, and have sight of awards made under any share incentive plan applicable to employees other than executive directors and designated senior managers Monitor and review the level and structure of remuneration of senior management and note remuneration trends across the Company Determine the policy for, and scope of, service agreements, termination payments, compensation commitments and pension arrangements for each executive director and other designated senior executives Ensure that contractual terms on termination, and any payments made, are fair to the individual, and the Company and in accordance with legal and regulatory requirements, that failure is not rewarded and that the duty to mitigate loss is fully recognised Oversee any major changes in employee benefits structures throughout the Company or group Agree the policy for authorising claims for expenses from the directors Work and liaise as necessary with all other Board Committees. 9. Reporting Responsibilities 9.1. The Committee Chairman shall report to the Board on its proceedings after each meeting on all matters within its duties and responsibilities The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed The Committee shall ensure that provisions regarding disclosure of information, including pensions as set out in applicable legislation and the UK Corporate Governance Code, are fulfilled The Committee shall produce, for inclusion in the Company's Annual Report: a statement from the Committee Chairman providing a summary of the Company's remuneration policy and the annual report on the remuneration policy; an annual report on the Company's remuneration policy and its remuneration practices and the Committee shall ensure that it is put to shareholders for approval at each AGM; and the Company's remuneration policy and the Committee shall ensure that it is put to shareholders for approval every three years (or such shorter period as may be required by applicable legislation) If the Committee has appointed remuneration consultants, the annual report on the Company's remuneration policy should identify such consultants and state whether they have any other connection with the Company Through the Chairman of the Board, ensure that the Company (whether through the Committee or otherwise) maintains contact as required with its principal shareholders about remuneration Code Principle D Code Provision D.2 19 Code Provision, D Code Provision, D FRC Guidance on Board Effectiveness, paragraph Code, D Code Principle D.2. Page 3 of 4

5 10. Other The Committee shall: Have access to sufficient resources in order to carry out its duties, including access to the Company Secretariat and any other employees of the Group for assistance as required Be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members Give due consideration to laws and regulations and any published guidelines or recommendations, the provisions of the UK Corporate Governance Code, the requirements of the FCA's Listing, Prospectus and Disclosure and Transparency Rules as well as guidelines or recommendations published by investor bodies (such as the Investment Management Association and the National Association of Pension Funds) as appropriate Arrange for periodic reviews of its own performance and, at least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval Make available these terms of reference. 11. Authority The Committee is authorised by the Board to obtain, at the Company s expense, outside legal or other professional advice on any matters within its terms of reference. 27 Approved by the Board on 8 December Code Principle B Code Principle B.4. B Code Principle B.6 27 Code Provision B.5.1. Page 4 of 4