Remuneration Report 3 Directors’ Remuneration Policy The Directors’ Remuneration Policy set out on the following pages will be subject to a binding vote of shareowners at the AGM to be held on 16 June 2022 and will formally apply from that date. Once approved, it will replace the Policy approved by shareowners at the AGM held on 29 May 2019 and will continue to apply until no later than the AGM in 2025. Payments to Directors and payments for loss of office can only be made if they are consistent with the terms of the approved Remuneration Policy. The Committee will be required to seek shareowner approval for an amendment to the Policy if it wishes to make a payment to a Director which is not envisaged by the approved Policy. The Policy has been prepared in line with the relevant UK reporting regulations. The Policy was approved by the Nomination and Remuneration Committee following a review of the existing Policy and taking into account developments since 2019. Working with its external advisers, the Committee considered the ongoing appropriateness of the existing Policy in the context of the increased scale and complexity of the Company, the high levels of share ownership among the Executive Directors, developments in corporate governance and the expectations of institutional investors. The Committee reflected on the views of key internal stakeholders and also sought feedback from major shareowners and the leading proxy advisory bodies before finalising the details of the Policy. As a fully independent Committee, conflicts of interest were minimised and no individual was responsible for determining his or her own remuneration. Key changes to the Remuneration Policy In general, the new Policy is not fundamentally different to that approved by shareowners in 2019. The Committee has been keen to retain the focus on relatively low levels of fixed remuneration, a below-market annual bonus opportunity and an emphasis on long-term share ownership. The Incentive Share scheme for certain Directors remains an integral part of the Policy. The main changes to the Policy approved in 2019 are as follows: • We have clarified that pension provision for all Executive Directors will be aligned with the rate for the wider workforce or to the legal requirements in place in their country of appointment. This applies to all new Executive Directors with immediate effect and for incumbent Directors no later than 31 December 2022. • We have formalised the minimum shareholding requirement within the Policy. This requires Executive Directors to build and hold shares equivalent in value to 200% of basic salary. • A post-employment shareholding requirement has also been introduced. This will require the Executive Directors, for a period of two years following cessation of employment, to retain a minimum shareholding at the lower of (a) the in-employment shareholding requirement of 200% of basic salary and (b) the individual’s actual shareholding at the point of cessation. • The circumstances in which malus and clawback provisions will be triggered are now set out in the Policy. These provisions apply to awards under the annual bonus scheme, the scheme under which our new CFO is granted her share awards and any new long-term incentive scheme put in place during the lifetime of the Policy. • We have formalised the Committee’s ability to override the formulaic outcome of incentive schemes where appropriate. • We have included within the Remuneration Policy table the Employee Share Ownership Plan, which is the legal structure under which the equity awards agreed for the new CFO have been granted. Further details in relation to these awards are included in the Annual Statement from the Chair of the Nomination and Remuneration Committee. • We have retained the flexibility to introduce new long-term incentive schemes for the Executive Directors if required during the lifetime of the Policy, but have made some minor amendments to the wording of the relevant section of the Policy. In addition, we clarify that where such a scheme involves the use of performance shares, the maximum annual grant size will be 200% of basic salary, with flexibility to increase to 250% of salary in exceptional circumstances. If other types of award are made (e.g. market-priced share options), these awards would have a similar fair value. • In the event of the recruitment of a new Executive Director, we state that any award of performance shares would be up to a maximum of 250% of basic salary, thus aligning with the exceptional circumstances limit noted above. We also clarify that any award to buy out the incentives forfeited by a new Director on joining S4Capital will as far as possible be based on the value of the awards forfeited and will reflect the same delivery vehicle, performance and vesting horizon. The Policy provides the Committee with the ability to exercise discretion in certain circumstances. This is explained in the relevant sections of the Policy table and in the sections below the table. S4Capital Annual Report and Accounts 2021 71