The Board of the Company ("the Board") resolved to establish a committee of the Board known as the Remuneration Committee ("the Committee") at a meeting held on 12 May 2005, when terms of reference were formally agreed. The terms of reference for the Committee were revised and approved by the Board on 15 December 2017.
Remuneration Committee Terms of Reference PDF 0.02MB
The current Remuneration Policy was approved by shareholders at the 2018 AGM and is effective from that date.
Full Remuneration Policy PDF 0.02MB
Note on 2019 Annual Report and Directors’ Remuneration
In April 2020 Essentra announced changes to the remuneration of its Directors which were agreed by the Essentra Board on 9 April 2020 in light of the ongoing impacts of the COVID-19 pandemic, and after the finalisation of the Director’s Remuneration Report included in the Annual Report.
1. Paul Forman, Chief Executive Officer, has waived an increase in his base salary at 1 April 2020. Additionally, his salary will be reduced by 20% from 1 April 2020 until further notice.
2. Lily Liu, Group Finance Director, will have a reduction in her salary increase from 9.9% to 7.5% at 1 April 2020. The increase in her base salary is to bring her salary into line with the broader market, as signaled in 2018 and explained in the Directors’ Remuneration Report, but she has waived an annual increase in her base salary at 1 April 2020. Additionally, her salary will be reduced by 20% from 1 April 2020 until further notice.
3. Paul Forman and Lily Liu have both waived their 2020 Long Term Incentive Plan (LTIP) awards. Their next LTIP awards will be in 2021.
4. The Chairman and Non-Executive Directors have accepted a reduction in their basic and supplementary fees of 20% from 1 April 2020 until further notice.
The General Management Committee have also taken a reduction in salary by 20% from the 1 April until further notice and waived their 2020 LTIP awards. These actions demonstrate the Board’s solidarity with the decision to pay any furloughed employees of Essentra a minimum of 80% of their salary irrespective of the country they work in. This helps ensure staff can meet their basic living requirements in the event they are furloughed.
Essentra plc provided an update on the impact of COVID-19 on the Company on 27 March 2020 which reflected the Company’s continued focus on three priorities in managing the response to the pandemic; employee physical and emotional wellbeing, continued high levels of customer support and cash conservation.
Note on Directors’ Remuneration Policy 2018 (the 'Policy')
The Company’s proposed Policy had intended to align the level of annual LTIP awards for Executive Directors (200% of salary) with their minimum shareholding requirement (200% of salary). Notwithstanding the logic of our proposed approach, some feedback indicated that the reduction in the Chief Executive’s minimum shareholding requirement could receive unfavourable reviews in certain Proxy Reports.
Last year, we consulted with our Top 20 shareholders in developing the proposed Policy and of these 14 responded to the consultation, and all of them were supportive. However, our Chief Executive, Paul Forman, does not wish this to be a voting issue and has therefore agreed with the Remuneration Committee that the Chief Executive minimum shareholding requirement should remain at 300% of salary in our new Policy, achievable within six years.