Governance Report Report of the Nomination and Remuneration Committee continued The Policy was last approved by shareowners The changes we have made to the Policy are at the AGM in 2019 and, in accordance with set out on page 71. In short, we have clarified the relevant regulations, shareowner approval some of the ways in which the Policy will is therefore required for a new Policy at this operate and formalised matters such as the year’s AGM. During 2021, the Committee requirement for Executive Directors to build undertook an extensive review of the Policy a minimum shareholding during their tenure. to determine what, if any, changes were We have also brought the Policy into line with required to ensure its ongoing suitability for good practice by introducing post-employment the Company. We considered the growth of shareholding requirements and aligning the the business since 2019, the opportunities for pension provision of Directors with the wider the coming years, common market practice workforce. The Policy table also includes the and the views of major investors and relevant equity plan we have introduced under which representative bodies. share awards have been made to the new CFO, Our overall conclusion was that the Policy has as explained further below. to date provided an appropriate framework The Committee believes that the new Policy for rewarding the Executive Directors, and provides an appropriate framework for there is no pressing need to make material Directors’ remuneration over the next three- changes. As a result, the Policy presented for year period. shareowner approval at the forthcoming AGM How we intend to apply the is similar to that approved in 2019, although we have made a number of minor amendments Remuneration Policy in 2022 to ensure we retain an appropriate level of The Committee has reviewed the basic salaries flexibility while bringing some elements further of the Executive Directors and has agreed into line with market practice. to increase the salary of Sir Martin Sorrell, Equity ownership is an integral part of the the Executive Chairman, from £100,000 to Policy. Cash remuneration is kept at relatively £250,000 with effect from 1 January 2022. modest levels, with salaries for the Executive Although this is a significant increase, the new Directors deliberately pitched at lower-than- salary remains well below the market rate for market positioning and supplemented with CEOs of companies of a comparable size to a limited cash bonus opportunity (which is S4Capital. The new salary is considered to be not being increased). The high level of share a fairer reflection of the contribution that Sir ownership among the Executive Directors Martin makes to S4Capital’s success, reflects has meant that operating mandatory bonus the growth of the business since its inception, deferral into equity or a conventional long- and is more consistent with the salaries paid term incentive plan for all Directors has not to the other Executive Directors. For the other been considered necessary. The Policy does, Executive Directors there are no increases however, include the Incentive Share scheme, for 2022. in which two of the Executive Directors The new Policy provides for the pension participate. This scheme is central to the provision for Directors to align with success of the Company, and represents a key wider workforce contribution rates. way in which reward is linked to the growth of After 31 December 2022, the contribution the business. After the first vesting period for rate for Sir Martin Sorrell and for Scott Spirit the scheme, there is a ‘reset’ mechanism which will be reduced from 30% and 10% of basic results in participants having an entitlement to salary respectively to 4% of basic salary, receive further returns over a second period. which is aligned with the contribution rate for The operation of this scheme is explained the majority of UK employees. This means further on pages 85 and 86. that for all Executive Directors, the rate will be aligned with the wider workforce or to the legal requirements in place in their country of appointment. 66 S4Capital Annual Report and Accounts 2021