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6. Policy on non-executive director remuneration

Non-executive director remuneration is approved by the Board as a whole on the recommendation of the chairman and executive directors.

The Company's policy on non-executive director remuneration is based on the following key principles:

  • Remuneration should be:
  • sufficient to attract and retain world-class non-executive talent;
  • consistent with recognised best practice standards for non-executive director remuneration;
  • in the form of cash fees, but with the flexibility to forgo all or part of such fees (after deduction of applicable income tax and social security contributions) to acquire shares in the Company should the non-executive director so wish; and
  • set by reference to the responsibilities taken on by the non-executives in chairing the Board and its committees.
  • Non-executive directors may not participate in the Company's share incentives schemes or pension arrangements.

It is the intention that this policy will continue to apply for 2010 and subsequent years, subject to ongoing review as appropriate.

The Board reviews non-executive directors' fees periodically to ensure that they remain market-competitive. Additional fees are paid to the chairmen of Board committees and to the senior independent director (SID). Should non-executive directors acquire executive board roles within subsidiaries of the Company, then they might also receive additional remuneration from the relevant subsidiaries on account of these increased responsibilities. Non-executive directors' fees were last increased following a review in December 2005 (and took effect in January 2006). Since that time, it is felt that fee levels have fallen behind the market and the Board has therefore agreed to increase the basic fee to £80,000 per annum (pa) and the fee for the SID to £100,000 pa with effect from 1 January 2010. There will be no change to the fees for Committee Chairmen.

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Annual Report 2009