Report of the Remuneration Committee
The Remuneration Committee meets at least once a year to review the remuneration of the Executive Directors and approve policies for remuneration of other senior executives. The Committee also monitors performance and approves the payment of all performance related bonuses and administers the operation of the share option and share incentive schemes established by the Group.
The Committee is chaired by Susan Lewis and comprises Susan Lewis, John Wheatley, Mark Chambers and Alan Hudson.
Alan Hudson does not participate in any discussions in which he has an interest.
Directors’ remuneration report
This Report describes how the Board has voluntarily applied the Principles of Good Governance relating to Director’s remuneration. The report also provides the information required to be reported on Directors’ remuneration under AIM Rule 19.
The policy is to provide remuneration packages for executive directors which aim to attract and retain high quality executives capable of achieving the Group’s objectives and thereby enhance shareholder value. The performance measurement of the Executive Directors and key members of senior management and the determination of their annual remuneration package is undertaken by the Committee.
The remuneration of the Non-Executive Directors is determined by the Board of Directors.
The following comprises the components of the remuneration of all Executive Directors:
The base salaries of the executive directors are set at levels considered to be appropriate when they enter into service agreements with the Group. The base salaries are reviewed by the Remuneration Committee annually and any increases are awarded having regard to performance and salary levels in comparable organisations.
Annual performance related payments
It is the policy of the Company to operate bonus arrangements for the Executive Directors which are performance related, the primary measures being the achievement of financial targets and personal performance.
Benefits in kind
A range of taxable benefits are available to Executive Directors. These benefits primarily comprise the provision of company pension contribution, life assurance and private medical insurance.
Share option schemes
The Company has established approved and unapproved share option schemes, in which the executive directors may participate. Details are set out in note 15 to these financial statements.
The group pays a defined contribution to the pension scheme of certain executive directors. The individual pension schemes are private and their assets are held separately from those of the Group.
Executive Directors’ contracts
Executive directors are employed under service contracts requiring a maximum of 12 months’ notice by the company.
Non-Executive Directors’ contracts
The Chairman and the non-executive directors each receive a fee for their services under appointment letters which are for an initial period of 12 months and thereafter terminable by 3 months’ notice from either party. The fee is approved by the Board, mindful of the time commitment and responsibilities of their roles and of current market rates for comparable organisations and appointments. The non-executive directors and the Chairman are reimbursed for travelling and other minor expenses incurred.
As part of the placing in April 2017, A Hudson agreed to sell 1,000,000 existing Ordinary Shares at the Placing Price to satisfy excess demand in the Placing. The other movements during the year are detailed on page 20. On 2 February, J Wheatley acquired 6,000 ordinary shares of 10 pence each at a price of 170 pence per Ordinary Share. On 2 February, M Chambers acquired 5,000 ordinary shares of 10 pence each at a price of 170 pence per Ordinary Share. The mid-market price of the shares at 31 October 2017 was 247.5p. The range during the year was 165p to 305p.
Interest in options
The Group operates the Share Option Plan by which certain of the Executive Directors and other senior executives are able to subscribe for ordinary shares in the Company. The interests of the directors were as follows:
During the year A Hudson purchased 100 B shares in AFH Group Limited for £3,333 under a Group growth share scheme. These shares can be converted into 100,000 equity share options after three years subject to certain performance conditions and have been shown as movements during the year in the table above. P Wright, purchased 32 B shares in AFH Group Limited for £1,066 under a Group growth share scheme. These shares can each be converted into 32,000 equity share options after three years subject to certain performance conditions and have been shown as movements during the year in the table above. A Broad and A Larvin each purchased 16 B shares in AFH Group Limited for £533 under a Group growth share scheme. These shares can each be converted into 16,000 equity share options after three years subject to certain performance conditions and have been shown as movements during the year in the table above.
Any shares that do not meet the performance criteria are cancelled after three years.
No Director had any other beneficial interest at the year end in the shares of any other Group Company.
This report was approved by the Board of Directors on 29 January 2018 and signed on its behalf by:
29 January 2018
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