[F1SCHEDULE 8U.K.QUOTED COMPANIES [F2AND TRADED COMPANIES]: DIRECTORS’ REMUNERATION REPORT

PART 3U.K.ANNUAL REPORT ON REMUNERATION

Single total figure of remuneration for each directorU.K.

4.—(1) The directors’ remuneration report must, for the relevant financial year, for each person who has served as a director of the company at any time during that year, set out in a table in the form set out in paragraph 5 (“the single total figure table”) the information prescribed by paragraphs 6 and 7 below.

(2) The report may set out in separate tables the information to be supplied in respect of directors who perform executive functions and those who do not.

(3) Unless otherwise indicated the sums set out in the table are those in respect of the relevant financial year and relate to the director’s performance of, or agreement to perform, qualifying services.

5.—(1) The form of the table required by paragraph 4 is—

(2) The directors may choose to display the table using an alternative orientation, in which case references in this Schedule to columns are to be read as references to rows.

6.—(1) In addition to the columns described in paragraph 7, columns—

(a)must be included to set out any other items in the nature of remuneration (other than items required to be disclosed under paragraph 15) which are not set out in the columns headed “(a)” to “(e)”; and

(b)may be included if there are any sub-totals or other items which the directors consider necessary in order to assist the understanding of the table.

(2) Any additional columns must be inserted before the column marked “Total”.

7.—(1) Subject to paragraph 9, in the single total figure table, the sums that are required to be set out in the columns are—

(a)in the column headed “a”, the total amount of salary and fees;

(b)in the column headed “b”, all taxable benefits;

(c)in the column headed “c”, money or other assets received or receivable for the relevant financial year as a result of the achievement of performance measures and targets relating to a period ending in that financial year other than—

(i)those which result from awards made in a previous financial year and where final vesting is determined as a result of the achievement of performance measures or targets relating to a period ending in the relevant financial year; or

(ii)those receivable subject to the achievement of performance measures or targets in a future financial year;

(d)in the column headed “d”, money or other assets received or receivable for periods of more than one financial year where final vesting—

(i)is determined as a result of the achievement of performance measures or targets relating to a period ending in the relevant financial year; and

(ii)is not subject to the achievement of performance measures or targets in a future financial year;

(e)in the column headed “e”, all pension related benefits including—

(i)payments (whether in cash or otherwise) in lieu of retirement benefits;

(ii)all benefits in year from participating in pension schemes;

(f)in the column headed “Total”, the total amount of the sums set out in the previous columns;

[F4(g)in the column headed “Total Fixed Remuneration”, the total amount of the sums set out in columns headed “a”, “b” and “e” and any additional columns relevant to this calculation;

(h)in the column headed “Total Variable Remuneration”, the total amount of the sums set out in columns headed “c” and “d” and any additional columns relevant to this calculation.]

(2) Where it is necessary to assist the understanding of the table by the creation of sub-totals the columns headed “a” to “e” may be set out in an order other than the one set out in paragraph 5.

8.—(1) In respect of any items in paragraph 7(1)(c) or (d) where the performance measures or targets are substantially (but not fully) completed by the end of the relevant financial year—

(a)the sum given in the table may include sums which relate to the following financial year; but

(b)where such sums are included, those sums must not be included in the corresponding column of the single total figure table prepared for that following financial year; and

(c)a note to the table must explain the basis of the calculation.

(2) Where any money or other assets reported in the single total figure table in the directors’ remuneration report prepared in respect of any previous financial year are the subject of a recovery of sums paid or the withholding of any sum for any reason in the relevant financial year—

(a)the recovery or withholding so attributable must be shown in a separate column in the table as a negative value and deducted from the column headed “Total”; and

(b)an explanation for the recovery or withholding and the basis of the calculation must be given in a note to the table.

(3) Where the calculations in accordance with paragraph 10 (other than in respect of a recovery or withholding) result in a negative value, the result must be expressed as zero in the relevant column in the table.

9.—(1) Each column in the single total figure table must contain, in such manner as to permit comparison, two sums as follows—

(a)the sum set out in the corresponding column in the report prepared in respect of the financial year preceding the relevant financial year; and

(b)the sum for the relevant financial year.

(2) When, in the single total figure table, a sum is given in the column which relates to the preceding financial year and that sum, when set out in the report for that preceding year was given as an estimated sum, then in the relevant financial year—

(a)it must be given as an actual sum;

(b)the amount representing the difference between the estimate and the actual must not be included in the column relating to the relevant financial year; and

(c)details of the calculation of the revised sum must be given in a note to the table.

10.—(1) The methods to be used to calculate the sums required to be set out in the single total figure table are—

(a)for the column headed “a”, cash paid to or receivable by the person in respect of the relevant financial year;

(b)for the column headed “b”, the gross value before payment of tax;

(c)for column “c”, the total cash equivalent including any amount deferred, other than where the deferral is subject to the achievement of further performance measures or targets in a future financial year;

(d)for column “d”—

(i)the cash value of any monetary award;

(ii)the value of any shares or share options awarded, calculated by—

(aa)multiplying the original number of shares granted by the proportion that vest (or an estimate);

(bb)multiplying the total arrived at in (aa) by the market price of shares at the date on which the shares vest; and

(iii)the value of any additional cash or shares receivable in respect of dividends accrued (actually or notionally);

(e)for the column headed “e”,—

(i)for the item in paragraph 7(1)(e)(i), the cash value;

(ii)for the item in paragraph 7(1)(e)(ii), what the aggregate pension input amount would be across all the pension schemes of the company or group in which the director accrues benefits, calculated using the method set out in section 229 of the Finance Act 2004 where—

(aa)references to “pension input period” are to be read as references to the company’s financial year, or where a person becomes a director during the financial year, the period starting on the date the person became a director and ending at the end of the financial year;

(bb)all pension schemes of the company or group which provide relevant benefits to the director are deemed to be registered schemes;

(cc)all pension contributions paid by the director during the pension input period are deducted from the pension input amount;

(dd)in the application of section 234 of that Act, the figure 20 is substituted for the figure 16 each time it appears;

(ee)subsections 229(3) and (4) do not apply; and

(ff)section 277 of that Act is read as follows—

277    “Valuation assumptions

For the purposes of this Part the valuation assumptions in relation to a person, benefits and a date are—

(a)if the person has not left the employment to which the arrangement relates on or before the date, that the person left that employment on the date with a prospective right to benefits under the arrangement,

(b)if the person has not reached such age (if any) as must have been reached to avoid any reduction in the benefits on account of age, that on the date the person is entitled to receive the benefits without any reduction on account of age, and

(c)that the person’s right to receive the benefits had not been occasioned by physical or mental impairment.”.

(2) For the item in paragraph 7(1)(e)(ii) where there has not been a company contribution to the pension scheme in respect of the director, but if such a contribution had been made it would have been measured for pension input purposes under section 233(1)(b) of the Finance Act 2004, when calculating the pension input amount for the purposes of sub-paragraph (1)(e)(ii) it should be calculated as if the cash value of any contribution notionally allocated to the scheme in respect of the person by or on behalf of the company including any adjustment made for any notional investment return achieved during the relevant financial year were a contribution paid by the employer in respect of the individual for the purposes of section 233(1)(b) of the Finance Act 2004.

(3) For the purposes of the calculation in sub-paragraph (1)(d)(ii)—

(a)where the market price of shares at the date on which the shares vest is not ascertainable by the date on which the remuneration report is approved by the directors, an estimate of the market price of the shares shall be calculated on the basis of an average market value over the last quarter of the relevant financial year; and

(b)where the award was an award of shares or share options, the cash amount the individual was or will be required to pay to acquire the share must be deducted from the total.

Definitions applicable to the single total figure tableU.K.

11.—(1) In paragraph 7(1)(b) “taxable benefits” includes—

(a)sums paid by way of expenses allowance that are—

(i)chargeable to United Kingdom income tax (or would be if the person were an individual, or would be if the person were resident in the United Kingdom for tax purposes), and

(ii)paid to or receivable by the person in respect of qualifying services; and

(b)any benefits received by the person, other than salary, (whether or not in cash) that—

(i)are emoluments of the person, and

(ii)are received by the person in respect of qualifying services.

(2) A payment or other benefit received in advance of a director commencing qualifying services, but in anticipation of performing qualifying services, is to be treated as if received on the first day of performance of the qualifying services.

Additional requirements in respect of the single total figure tableU.K.

12.—(1) In respect of the sum required to be set out by paragraph 7(1)(b), there must be set out after the table a summary identifying—

(a)the types of benefits the value of which is included in the sum set out in the column headed “b”; and

(b)the value (where significant).

(2) For every component the value of which is included in the sums required to be set out in the columns headed “c” and “d” of the table by paragraphs 7(1)(c) and (d), there must be set out after the table the relevant details.

(3) In sub-paragraph (2) “the relevant details” means—

(a)details of any performance measures and the relative weighting of each;

(b)within each performance measure, the performance targets set at the beginning of the performance period and corresponding value of the award achievable;

(c)for each performance measure, details of actual performance relative to the targets set and measured over the relevant reporting period, and the resulting level of award; and

[F5(ca)the amount of the award or, where this is not ascertainable, an estimate of the amount of the award, that is attributable to share price appreciation;]

(d)where any discretion has been exercised in respect of the award, particulars must be given of how the discretion was exercised [F6, how the resulting level of award was determined and whether the discretion has been exercised as a result of share price appreciation or depreciation.]

(4) For each component the value of which is included in the sum set out in the column headed “c” of the table, the report must state if any amount was deferred, the percentage deferred, whether it was deferred in cash or shares, if relevant, and whether the deferral was subject to any conditions other than performance measures.

(5) Where additional columns are included in accordance with paragraph 6(1)(a), there must be set out in a note to the table the basis on which the sums in the column were calculated, and other such details as are necessary for an understanding of the sums set out in the column, including any performance measures relating to that component of remuneration or if there are none, an explanation of why not.

Total pension entitlementsU.K.

13.—(1) The directors’ remuneration report must, for each person who has served as a director of the company at any time during the relevant financial year, and who has a prospective entitlement to defined benefits or cash balance benefits (or to benefits under a hybrid arrangement which includes such benefits) in respect of qualifying services, contain the following information in respect of pensions—

(a)details of those rights as at the end of that year, including the person’s normal retirement date;

(b)a description of any additional benefit that will become receivable by a director in the event that that director retires early; and

(c)where a person has rights under more than one type of pension benefit identified in column headed “e” of the single total figure table, separate details relating to each type of pension benefit.

(2) For the purposes of this paragraph, “defined benefits”, “cash balance benefits” and “hybrid arrangement” have the same meaning as in section 152 of the Finance Act 2004.

(3) “Normal retirement date” means an age specified in the pension scheme rules (or otherwise determined) as the earliest age at which, while the individual continues to accrue benefits under the pension scheme, entitlement to a benefit arises—

(a)without consent (whether of an employer, the trustees or managers of the scheme or otherwise), and

(b)without an actuarial reduction,

but disregarding any special provision as to early repayment on grounds of ill health, redundancy or dismissal.

Scheme interests awarded during the financial yearU.K.

14.—(1) The directors’ remuneration report must for each person who has served as a director of the company at any time during the relevant financial year contain a table setting out—

(a)details of the scheme interests awarded to the person during the relevant financial year; and

(b)for each scheme interest—

(i)a description of the type of interest awarded;

(ii)a description of the basis on which the award is made;

(iii)the face value of the award;

(iv)the percentage of scheme interests that would be receivable if the minimum performance was achieved;

(v)for a scheme interest that is a share option, an explanation of any difference between the exercise price per share and the price specified under paragraph 14(3) [F7and any change in the exercise price or date;]

(vi)the end of the period over which the performance measures and targets for that interest have to be achieved (or if there are different periods for different measures and targets, the end of whichever of those periods ends last); and

(vii)a summary of the performance measures and targets if not set out elsewhere in the report.

(2) In respect of a scheme interest relating to shares or share options, “face value” means the maximum number of shares that would vest if all performance measures and targets are met multiplied by either—

(a)the share price at date of grant or

(b)the average share price used to determine the number of shares awarded.

(3) Where the report sets out the face value of an award in respect of a scheme interest relating to shares or share options, the report must specify—

(a)whether the face value has been calculated using the share price at date of grant or the average share price;

(b)where the share price at date of grant is used, the amount of that share price and the date of grant;

(c)where the average share price is used, what that price was and the period used for calculating the average.

Payments to past directorsU.K.

15.  The directors’ remuneration report must, for the relevant financial year, contain details of any payments of money or other assets to any person who was not a director of the company at the time the payment was made, but who had been a director of the company before that time, excluding—

(a)any payments falling within paragraph 16;

(b)any payments which are shown in the single total figure table;

(c)any payments which have been disclosed in a previous directors’ remuneration report of the company;

(d)any payments which are below a de minimis threshold set by the company and stated in the report;

(e)payments by way of regular pension benefits commenced in a previous year or dividend payments in respect of scheme interests retained after leaving office; and

(f)payments in respect of employment with or any other contractual service performed for the company other than as a director.

Payments for loss of officeU.K.

16.  The directors’ remuneration report must for the relevant financial year set out, for each person who has served as a director of the company at any time during that year, or any previous year, excluding payments which are below a de minimis threshold set by the company and stated in the report—

(a)the total amount of any payment for loss of office paid to or receivable by the person in respect of that financial year, broken down into each component comprised in that payment and the value of each component;

(b)an explanation of how each component was calculated;

(c)any other payments paid to or receivable by the person in connection with the termination of qualifying services, whether by way of compensation for loss of office or otherwise, including the treatment of outstanding incentive awards that vest on or following termination; and

(d)where any discretion was exercised in respect of the payment, an explanation of how it was exercised.

Statement of directors’ shareholding and share interestsU.K.

17.  The directors’ remuneration report for the relevant financial year must contain, for each person who has served as a director of the company at any time during that year—

(a)a statement of any requirements or guidelines for the director to own shares in the company and state whether or not those requirements or guidelines have been met;

(b)in tabular form or forms—

(i)the total number of interests in shares in the company of the director including interests of connected persons (as defined for the purposes of section 96B(2) of the Financial Services and Markets Act 2000);

(ii)total number of scheme interests differentiating between—

(aa)shares and share options; and

(bb)those with or without performance measures;

(iii)details of those scheme interests (which may exclude any details included elsewhere in the report); and

(iv)details of share options which are—

(aa)vested but unexercised; and

(bb)exercised in the relevant financial year.

Performance graph and tableU.K.

18.—(1) The directors’ remuneration report must—

(a)contain a line graph that shows for each of—

(i)a holding of shares of that class of the company’s equity share capital whose listing, or admission to dealing, has resulted in the company falling within the definition of “quoted company” [F8or “unquoted traded company”], and

(ii)a hypothetical holding of shares made up of shares of the same kinds and number as those by reference to which a broad equity market index is calculated,

a line drawn by joining up points plotted to represent, for each of the financial years in the relevant period, the total shareholder return on that holding; and

(b)state the name of the index selected for the purposes of the graph and set out the reasons for selecting that index.

(2) The report must also set out in tabular form the following information for each of the financial years in the relevant period in respect of the director undertaking the role of chief executive officer—

(a)total remuneration as set out in the single total figure table;

(b)the sum set out in the table in column headed “c” in the single total figure table expressed as a percentage of the maximum that could have been paid in respect of that component in the financial year; and

(c)the sum set out in column headed “d” in the single total figure table restated as a percentage of the number of shares vesting against the maximum number of shares that could have been received, or, where paid in money and other assets, as a percentage of the maximum that could have been paid in respect of that component in the financial year.

(3) For the purposes of sub-paragraphs (1), (2) and (6), “relevant period” means the specified period of financial years of which the last is the relevant financial year.

(4) Where the relevant financial year—

(a)is the company’s first financial year for which the performance graph is prepared in accordance with this paragraph, “specified” in sub-paragraph (3) means “five”;

(b)is the company’s “second”, “third”, “fourth”, “fifth” financial year in which the report is prepared in accordance with this Schedule, “specified” in sub-paragraph (3) means “six”, “seven”, “eight”, “nine” as the case may be; and

(c)is any financial year after the fifth financial year in which the report is prepared in accordance with this Schedule, “specified” means “ten”.

(5) Sub-paragraph (2) may be complied with by use of either—

(a)a sum based on the information supplied in the directors’ remuneration reports for those previous years, or,

(b)where no such report has been compiled, a suitable corresponding sum.

(6) For the purposes of sub-paragraph (1), the “total shareholder return” for a relevant period on a holding of shares must be calculated using a fair method that—

(a)takes as its starting point the percentage change over the period in the market price of the holding;

(b)involves making—

(i)the assumptions specified in sub-paragraph (7) as to reinvestment of income, and

(ii)the assumption specified in sub-paragraph (9) as to the funding of liabilities; and

(c)makes provision for any replacement of shares in the holding by shares of a different description;

and the same method must be used for each of the holdings mentioned in sub-paragraph (1).

(7) The assumptions as to reinvestment of income are—

(a)that any benefit in the form of shares of the same kind as those in the holding is added to the holding at the time the benefit becomes receivable; and

(b)that any benefit in cash, and an amount equal to the value of any benefit not in cash and not falling within paragraph (a), is applied at the time the benefit becomes receivable in the purchase at their market price of shares of the same kind as those in the holding and that the shares purchased are added to the holding at that time.

(8) In sub-paragraph (7) “benefit” means any benefit (including, in particular, any dividend) receivable in respect of any shares in the holding by the holder from the company of whose share capital the shares form part.

(9) The assumption as to the funding of liabilities is that, where the holder has a liability to the company of whose capital the shares in the holding form part, shares are sold from the holding—

(a)immediately before the time by which the liability is due to be satisfied, and

(b)in such numbers that, at the time of the sale, the market price of the shares sold equals the amount of the liability in respect of the shares in the holding that are not being sold.

(10) In sub-paragraph (9) “liability” means a liability arising in respect of any shares in the holding or from the exercise of a right attached to any of those shares.

[F9Annual percentage change in remuneration of directors and employees]U.K.

19.—(1) The directors’ remuneration report must set out (in a manner which permits comparison) in relation to each of the kinds of remuneration required to be set out in each of the columns headed “a”, “b” and “c” of the single total figure table the following information—

[F10(a)the annual percentage change over the five financial years preceding the relevant financial year in respect of each director; and]

[F10(b)the average percentage change, from financial year to subsequent financial year, over the five financial years preceding the relevant financial year in respect of the employees of the company on a full time equivalent basis.]

F11(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F12(4) For the purposes of sub-paragraphs (1)(a) and (1)(b) the “five financial years” referred to must include financial years beginning on or after 10th June 2019 and where five financial years have not passed since that date the annual percentage change must be calculated for all financial years since that date preceding the relevant financial year.

(5) “Employee” for purposes of this paragraph means any employee other than a director.]

[F13Pay ratio information in relation to the total remuneration of the director undertaking the role of chief executive officerU.K.

19A.—(1) If paragraph 19B applies to the company for the relevant financial year the directors’ remuneration report must contain pay ratio information specified in paragraphs 19C to 19G.

(2) Where the company is a parent company, the pay ratio information must relate to the group and not the company, and references in paragraphs 19C, 19D and 19G to the company’s UK employees should be read as references to the UK employees of all the companies within the group.

Requirement to provide pay ratio informationU.K.

19B.—(1) This paragraph applies to a company—

(a)in relation to its first financial year if the qualifying condition is met in that year;

(b)in relation to a subsequent financial year—

(i)if the qualifying condition is met in that year and was also met in relation to the preceding financial year,

(ii)if—

(aa)the qualifying condition is met in that year, and

(bb)the paragraph applied to the company in the preceding financial year, or

(iii)if—

(aa)the qualifying condition was met in the preceding financial year, and

(bb)the paragraph applied to the company in the preceding financial year.

(2) The qualifying condition is met by a company in a year in which the average number of UK employees of the company is more than 250.

(3) The average number of UK employees of the company is determined as follows—

(a)find for each month in the financial year the number of UK employees in that month (whether employed throughout the month or not),

(b)add together the monthly totals, and

(c)divide by the number of months in the financial year.

(4) Where the company is a parent company the average number of UK employees refers to the number of UK employees within the group.

Pay ratios tableU.K.

19C.—(1) The directors’ remuneration report must set out in the form of the table in sub-paragraph (2) (“pay ratios table”) the following information for the relevant financial year—

(a)in the first column, the year in which that financial year ends,

(b)in the second column, the method set out in paragraph 19D used by the company to determine Y25, Y50 and Y75, and

(c)in subsequent columns, the specified ratios (“pay ratios”).

(2) The form of the pay ratios table is—

Where—

X is the remuneration of the director undertaking the role of chief executive officer (“CEO”), using the total for the CEO in the single total figure table. Where more than one person has undertaken the role of CEO in the relevant financial year, X means the total remuneration in the single total figure table paid to persons in relation to the period those persons were undertaking the role of CEO in the relevant financial year;

Y25 is the pay and benefits figure relating to P25;

Y50 is the pay and benefits figure relating to P50;

Y75 is the pay and benefits figure relating to P75.

(3) In this paragraph and paragraphs 19D to 19G—

“P25” is a UK employee whose pay and benefits are on the 25th percentile of pay and benefits of the company’s UK employees for the relevant financial year;

“P50” is a UK employee whose pay and benefits are on the 50th percentile of pay and benefits of the company’s UK employees for the relevant financial year;

“P75” is a UK employee whose pay and benefits are on the 75th percentile of pay and benefits of the company’s UK employees for the relevant financial year;

“pay and benefits” of a UK employee means the employee’s full-time equivalent pay and benefits, calculating the applicable components in paragraph 7(1)(a) to (e) by reference to paragraph 10, save that in paragraph 7(1)(a) “salary” means “wages and salary”.

(4) If the relevant financial year is not the first financial year in which the requirement in sub-paragraph (1) applied to the company, the pay ratios table must also show, in separate rows, information for earlier financial years in accordance with sub-paragraphs (5) and (6).

(5) The earlier financial years for which information must be shown under sub-paragraph (4) are—

(a)the first financial year in which the requirement in sub-paragraph (1) applied to the company and every subsequent financial year before the relevant financial year, or

(b)if the application of paragraph (a) would require the company to show information in respect of more than nine earlier financial years, the nine financial years immediately preceding the relevant financial year.

(6) The information required to be shown by sub-paragraph (4) is—

(a)for a financial year in which the requirement in sub-paragraph (1) applied to the company, the information that was required by that sub-paragraph to be included in the pay ratios table in respect of that financial year;

(b)for a financial year in which that requirement did not apply, the year of that financial year and the statement “The company was exempt from reporting pay ratios for this financial year”.

Pay ratios methodsU.K.

19D.—(1) The company must choose one of the methods set out in sub-paragraph (2) to determine the Y25, Y50 and Y75 figures to use in the pay ratios for the relevant financial year, but for a subsequent financial year may choose to use a different one of those methods.

(2) The methods for determining Y25, Y50 and Y75 are—

(a)“Option A” set out in sub-paragraph (3),

(b)“Option B” set out in sub-paragraph (4), or

(c)“Option C” set out in sub-paragraph (5).

(3) Under Option A the company must calculate the pay and benefits of all its UK employees for the relevant financial year in order to identify P25, P50 and P75, and use the pay and benefits figures for those UK employees as Y25, Y50 and Y75.

(4) Under Option B the company must determine Y25, Y50 and Y75 as follows—

(a)as a starting point, use the most recent hourly rate gender pay gap information for all UK employees of the company to identify three UK employees as the best equivalents of P25, P50 and P75,

(b)use available data for the relevant financial year for the best equivalents to calculate the pay and benefits figures for each for the relevant financial year, and

(c)make any necessary adjustment to the pay and benefit figures to ensure that the best equivalents are reasonably representative of P25, P50 and P75 for the relevant financial year.

(5) Under Option C the company may determine Y25, Y50 and Y75 as follows—

(a)as a starting point, use data other than, or in addition to, gender pay gap information to identify three UK employees as the best equivalents of P25, P50 and P75, and in so doing—

(i)the company must not use data that relates to any year prior to the preceding financial year, and

(ii)if the company has gender pay gap information available, it must not use data that is less up to date than the gender pay gap information,

(b)use available data for the relevant financial year for the best equivalents to calculate the pay and benefits for each in relation to the relevant financial year, and

(c)make any necessary adjustment to the pay and benefit figures to ensure that the best equivalents are reasonably representative of P25, P50 and P75 for the relevant financial year.

(6) When using any of the options, the company may—

(a)determine Y25, Y50 and Y75 with reference to a day no earlier than three months before the last day of the relevant financial year, using a projected calculation of the salary component of pay and benefits;

(b)omit any component other than salary from pay and benefits to determine Y25, Y50 and Y75, provided the company includes in its report a statement required by paragraph 19E(f);

(c)calculate any component of pay and benefits, other than salary, using a different methodology than that set out in paragraph 10 to determine Y25, Y50 and Y75, provided the company includes in its report a statement required by paragraph 19E(g).

(7) When using Option B or C, if the company does not have the data available for any component of pay and benefits corresponding to paragraph 7(1)(b) to (e), the company may use a reasonable estimate of that component to determine Y25, Y50 and Y75.

(8) In this paragraph gender pay gap information means the most recent data collected in accordance with the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.

Additional requirements in respect of the pay ratios tableU.K.

19E.  The directors’ remuneration report must set out the following information after the pay ratios table—

(a)an explanation of why the company chose Option A, B or C as the preferred method for calculating the pay ratio for the relevant financial year,

(b)if the company was required to report pay ratio information in the preceding financial year, and the company then used a different option to determine Y25, Y50 and Y75, an explanation for the change,

(c)the day by reference to which the company determined Y25, Y50 and Y75,

(d)where the company has used Option B—

(i)a brief explanation of how the best equivalents are reasonably representative of P25, P50 and P75, and

(ii)whether, and if so how, it has relied on the use of estimates or adjustments,

(e)where the company has used Option C—

(i)the methodology used for estimating the best equivalents, describing any estimates, adjustments, or material assumptions, and

(ii)a brief explanation of how the best equivalents are reasonably representative of P25, P50 and P75,

(f)where the company has omitted any component from pay and benefits in reliance on paragraph 19D(6)(b), the component omitted and the reason for the omission, and if the company omitted any component in the previous financial year, whether the company has continued to omit that component,

(g)where the company has used a different methodology from that set out in paragraph 10 to calculate a component of pay and benefits, a description of the different methodology and why the methodology in paragraph 10 was not used,

(h)a brief explanation of any assumptions or statistical modelling used to determine full-time equivalent remuneration.

19F.  The directors’ remuneration report must set out the following figures for each of Y25, Y50, and Y75 after the information required by paragraph 19E—

(a)total pay and benefits, and

(b)the salary component of total pay and benefits.

19G.  The directors’ remuneration report must set out a summary for the relevant financial year after the information required by paragraph 19F, explaining—

(a)any reduction or increase in the relevant financial year’s pay ratios compared to the pay ratios of the preceding financial year (if the company recorded pay ratio information for that financial year),

(b)whether a reduction or an increase in a pay ratio is attributable to a change in—

(i)the remuneration of the CEO, or the pay and benefits of the company’s UK employees taken as a whole;

(ii)the company’s employment models (including any increase in the proportion of the company’s employees employed to work wholly or mainly outside the UK, and any increase in the proportion of the company’s workforce that is not employed by the company under contracts of service);

(iii)the use of a different option to calculate Y25, Y50 and Y75,

(c)any trend in the median pay ratio over the period of financial years covered by the pay ratios table, and

(d)whether, and if so why, the company believes the median pay ratio for the relevant financial year is consistent with the pay, reward and progression policies for the company’s UK employees taken as a whole.]

Relative importance of spend on payU.K.

20.—(1) The directors’ remuneration report must set out in a graphical or tabular form that shows in respect of the relevant financial year and the immediately preceding financial year the actual expenditure of the company, and the difference in spend between those years, on—

(a)remuneration paid to or receivable by all employees of the group;

(b)distributions to shareholders by way of dividend and share buyback; and

(c)any other significant distributions and payments or other uses of profit or cash-flow deemed by the directors to assist in understanding the relative importance of spend on pay.

(2) There must be set out in a note to the report an explanation in respect of sub-paragraph (1)(c) why the particular matters were chosen by the directors and how the amounts were calculated.

(3) Where the matters chosen for the report in respect of sub-paragraph (1)(c) in the relevant financial year are not the same as the other items set out in the report for previous years, an explanation for that change must be given.

Statement of implementation of remuneration policy in the following financial yearU.K.

21.—(1) The directors’ remuneration report must contain a statement describing how the company intends to implement the approved directors’ remuneration policy in the financial year following the relevant financial year.

(2) The statement must include, where applicable, the—

(a)performance measures and relative weightings for each; and

(b)performance targets determined for the performance measures and how awards will be calculated.

(3) Where this is not the first year of the approved remuneration policy, the statement should detail any significant changes in the way that the remuneration policy will be implemented in the next financial year compared to how it was implemented in the relevant financial year [F14and any deviations from the procedure for the implementation of the remuneration policy set out in the policy].

(4) This statement need not include information that is elsewhere in the report, including any disclosed in the directors’ remuneration policy.

Consideration by the directors of matters relating to directors’ remunerationU.K.

22.—(1) If a committee of the company’s directors has considered matters relating to the directors’ remuneration for the relevant financial year, the directors’ remuneration report must—

(a)name each director who was a member of the committee at any time when the committee was considering any such matter;

(b)state whether any person provided to the committee advice, or services, that materially assisted the committee in their consideration of any such matter and name any person that has done so;

(c)in the case of any person named under paragraph (b), who is not a director of the company (other than a person who provided legal advice on compliance with any relevant legislation), state—

(i)the nature of any other services that that person has provided to the company during the relevant financial year;

(ii)by whom that person was appointed, whether or not by the committee and how they were selected;

(iii)whether and how the remuneration committee has satisfied itself that the advice received was objective and independent; and

(iv)the amount of fee or other charge paid by the company to that person for the provision of the advice or services referred to in paragraph (b) and the basis on which it was charged.

(2) In sub-paragraph (1)(b) “person” includes (in particular) any director of the company who does not fall within sub-paragraph (1)(a).

(3) Sub-paragraph (1)(c) does not apply where the person was, at the time of the provision of the advice or service, an employee of the company.

(4) This paragraph also applies to a committee which considers remuneration issues during the consideration of an individual’s nomination as a director.

Statement of voting at general meetingU.K.

23.  The directors’ remuneration report must contain a statement setting out in respect of the last general meeting at which a resolution of the following kind was moved by the company—

(a)in respect of a resolution to approve the directors’ remuneration report, the percentage of votes cast for and against and the number of votes withheld;

(b)in respect of a resolution to approve the directors’ remuneration policy, the percentage of votes cast for and against and the number of votes withheld; and,

(c)where there was a significant percentage of votes against either such resolution, a summary of the reasons for those votes, as far as known to the directors, and any actions taken by the directors in response to those concerns.]