Remuneration Policy Statement
Overall Approach
Within the Royal London Group, there are a number of Investment Firms, who are authorised and regulated by the Financial Services Authority and subject to FSA rules on remuneration. They need to comply with the requirements of the FSA’s Remuneration Code, as covered in the SYSC sourcebook of the FSA rules, and as required by the Capital Requirements Directive. In meeting these requirements the following companies have developed a range of policies, practices and procedures:
• Royal London Asset Management ( FSA No 141665)
• Royal London Cash Management (FSA No 121844)
• Royal London Savings (FSA No 191237)
• Investment Funds Direct (FSA No 114432)
Royal London Group has a Remuneration Committee, made up of Non-executive Directors and advised by independent Remuneration Consultants, which has overall responsibility for remuneration policy across the Group and all of its subsidiaries.
The Remuneration Committee will receive regular updates from the Chief Risk Officer including an annual report that details how effective Royal London (and its subsidiaries) has been in managing risk within the Group’s stated risk profile.
Remuneration Structure
In applying the principles of the FSA’s Code, firms can apply proportionality based on the nature of its activity and all of the above mentioned firms are Tier 4 firms. This disclosure is in line with the requirements for a Tier 4 firm.
16 employees are Code Staff for these four companies. The roles included are principally Executive Directors for each of the companies, who exert significant influence in the running of the companies and determine the firm’s risk profile, and Control Function roles covering Risk & Compliance, Internal Audit and Finance.
An annual review of the employees who are Code Staff is undertaken to ensure that it remains within the risk profiles for each of the respective companies.
Further Remuneration Details
All employees are remunerated with an annual fixed salary and variable payments, which may be a greater proportion of total salary than fixed salary. All variable amounts are distributed as cash, apart from the Long Term Investment Plan Schemes where options over appraisal value are available. Arrangements are in place for elements of the cash awards to be deferred for a period of 3 years, or to be made on a three year rolling cycle, for some Code Staff.
The aggregate annual remuneration of Code Staff is £4,067,713 in respect of the period ending 31 March 2011. This is made up of fixed pay and variable pay.
• Fixed pay comprises annual basic salary and any cash allowances.
• Variable pay comprises discretionary annual bonus based on individual and investment performance.
The structure of the remuneration packages for the FSA Code Staff is designed to be in line with the Group’s business strategy, take account of any conflicts of interest and the existing and future capital requirements of the business. None of the schemes are designed to encourage excessive risk taking. A fuller description of the remuneration schemes and the Group Remuneration Committee are contained in the Royal London Group Annual Report and Accounts, a copy of which is available in the Report and Accounts section.