Governance Report Report of the Nomination and Remuneration Committee continued Long-term equity incentives were agreed for The incentive has been structured in this Mary as she was the first senior executive fashion to ensure that Mary has a significant to have been appointed rather than join the share interest in the business, aligning her Company through a combination and with to the other Executive Directors and to a significant pre-existing share ownership. shareowners more generally, while all the The first part of the award was issued when time being subject to the achievement of Mary joined the Company in December 2021. challenging performance conditions. The use Mary was granted a nil-cost option over shares of an overall four year performance period for with a market value at grant equivalent to most of the award structured as successive £500,000. These shares vest after two years, one-year periods rather than the standard subject to continued employment and the three-year period recognises that, as S4Capital satisfaction of specific performance conditions continues to grow and evolve, each one of the linked to her role and personal performance. next four years is critical. This approach is also This equity award acknowledges the below- designed to be competitive in the context of market nature of her overall package and lack the international markets in which S4Capital of pre-existing shareholdings, and gives her a operates, where performance and vesting material upfront interest in S4Capital equity, periods can be shorter than the UK norm. aligned to shareowner interests and longer- The specific performance targets for all of term performance. the above awards are currently considered Mary will also receive four separate grants commercially confidential and will be disclosed made over the first four years of her at the time of vesting. All of the incentives are employment with S4Capital from 2022 to 2025. subject to malus and clawback provisions. Each award has an annual grant face value of The equity awards to Mary were granted under £500,000 (approximately 135% of her 2022 the Employee Share Ownership Plan, using the basic salary). Each annual grant will be divided flexibility available to the Committee under the into two parts, one as a nil-cost option and the Directors’ Remuneration Policy to introduce other as a market-priced option. The use of new long-term incentives for Executive market-priced options for half of each year’s Directors. The Committee has the ability under grant ensures a focus on share price growth. this element of the Policy to set performance Each grant will be subject to performance targets as it deems appropriate. conditions linked to gross profit growth and EBITDA margin which must be met over the Peter Rademaker stepped down as CFO year of grant. Each grant will be capable of following Mary’s appointment to the Board on vesting to the extent that the performance 3 January 2022. He received no payments for conditions are achieved, although no part of loss of office but remained employed by the the award will actually vest before 2026, i.e. Company until 31 January 2022, during which four years after the first grant date. There is no time he received his salary and other benefits. formal post-vesting holding period but Mary Peter will step down from his role as a will be required to build a shareholding up to a Non-Executive Director with effect from the minimum of 200% of basic salary, as specified end of this year’s AGM. in the Remuneration Policy. Pete Kim has also asked to step down from the Board with effect from the end of this year’s AGM but he will remain as Chief Executive Officer of Data.Monks. 68 S4Capital Annual Report and Accounts 2021