The Role of the Remuneration Committee
The primary purpose of the Remuneration Committee is to set the remuneration policy for executive directors and other senior executives and to ensure that they are fairly rewarded for their individual contribution to the Group’s overall performance, having due regard to the interests of shareholders, the financial and commercial health of the Group and pay and conditions throughout the Group.
The Company’s remuneration policy seeks, by application of the six principles detailed below, to provide an overall remuneration package to a value within a specific range. Due to the significant differences in remuneration practices in the two countries in which the Group operates, the level of remuneration is based upon and supported by separate and reliable independent market surveys which are undertaken in both the UK and the US, and therefore the way that individual packages are structured may differ.
None of the members of the Remuneration Committee has any personal financial interest (other than as shareholders) in matters decided by the Committee other than Mr. Williamson who absents himself from any discussion relating to his own remuneration. No executive director or senior manager is involved in determining their own remuneration.
The Remuneration Committee sets the remuneration of the Chairman of the Board and of the Group Chief Executive. It also sets the remuneration of the other executive directors and the Group Company Secretary based on recommendations made by the Group Chief Executive. The Committee also monitors and reviews the remuneration of certain other senior executives and sets performance targets. Where executive directors are involved in assisting the Remuneration Committee, care is taken to recognise and avoid possible conflicts of interest.
The Remuneration Committee takes external professional advice on a regular basis and has retained Towers Perrin as advisers to assist it and they are not retained in any other capacity within the Group. In addition Herbert Smith LLP (on UK aspects) and Weil, Gotshal & Manges (on US aspects) advise on legal matters. These firms also provide general legal advice to Signet.
The remuneration of the non-executive directors is determined by the Chairman and the executive members of the Board after consideration of, among other factors, external comparisons, the time commitment and responsibilities, and is not within the remit of the Remuneration Committee.
The Remuneration Committee consists of Robert Blanchard (Chairman), Robert Walker, Russell Walls and Malcolm Williamson (from 26 February 2007). The Committee met seven times during 2006/07 and there was full attendance at all meetings.
The terms of reference for the Remuneration Committee are available on request from the Group Company Secretary and here (114kb pdf).