Remuneration committee

Members

David Lis (Chairman)
Justin Dowley
Charlotte Twyning
Heather Lawrence
Gillian Elcock

Role and responsibilities

Since the Company was first established in 2003, the Remuneration Committee (the “Committee”) has pursued a consistent remuneration strategy that closely aligns the executive Directors with the Company’s shareholders, which has been central to its success. This strategy is based around four key principles – namely, that executive remuneration is:

  1. Simple – since Melrose was first established, executive Directors have received the same four simple elements as the rest of the Melrose employees – base salary, annual bonus, pension contribution (15% of salary, being the same percentage contribution for all Melrose head office employees, and therefore aligned with the workforce) and limited benefits – as well as being eligible under a single and consistent long-term incentive plan based on a single value creation metric.

  2. Transparent – each year, there is full and detailed disclosure in the Directors’ Remuneration Report of each component of remuneration, including an explanation of the calculation of any variable element and the current value of any unvested award pursuant to the Melrose Employee Share Plan.

  3. Supports the delivery of the value creation strategy – with the fixed elements being deliberately pegged at the lower quartile of FTSE 100 peers, the opportunity for any significant reward is heavily weighted to the Company’s long-term incentive arrangements, which are entirely based on the creation of shareholder value.

  4. Pays only for performance – executive remuneration is heavily weighted to the Company’s long-term incentive arrangements, which pay nothing to participants unless the executive Directors deliver a threshold return to shareholders over the relevant performance period, and only pay a significant award if they materially outperform in the creation of shareholder value.

These four key principles are wholly aligned with the UK Corporate Governance Code (the “Code”) factors of clarity, simplicity, risk, predictability, proportionality and alignment to culture, as, as set out on page 133 of the 2022 Annual Report. The Committee ensured that it took all of these elements into account when establishing the Directors’ Remuneration Policy, as well as its application to executive Directors during the period.

The Board has delegated to the Committee responsibility for overseeing the remuneration of the Chairman of the Board and the executive Directors.

The Committee’s responsibilities include:

  • Establishing and maintaining an executive Director remuneration policy that is appropriate, consistent and reflective of Melrose’s remuneration philosophy.
  • Determining the remuneration policy for the executive Directors.
  • Setting and managing remuneration packages of the executive Directors and the Chairman of the Board in accordance with the Directors’ Remuneration Policy.
  • Overseeing the remuneration of Melrose senior management and the GKN Aerospace CEO, to enable the Committee to consider their consistency with the executive Director remuneration packages.
  • Operating the Company’s long-term incentive arrangements.

The Committee’s terms of reference, which were last reviewed by the Committee in November 2022, are available through the link below and from the Company Secretary at the Company’s registered office.

Download the Remuneration Committee terms of reference