1. Introduction
At Chesnara, we believe that the implementation of sound remuneration policies and schemes is essential to attract, motivate and retain high-calibre individuals with the required skills and experience needed to contribute to the success of the group.
2. Our Remuneration Principles
We recognise that effective remuneration policies are essential to rewarding the success of individuals as well as ensuring the sound, prudent, and effective management of our business. This is why we have a number of group principles which, along with jurisdictional rules and regulations, inform our approach to remuneration across the group. These are:
- Remuneration will be aligned to the business and risk management strategy of the individual’s entity and take account of long-term interests of the business;
- Remuneration policies and schemes will take into account all roles that involve significant influence and/or risk taking;
- Remuneration schemes will consider an appropriate balance between fixed, variable, and deferred remuneration as appropriate to legislation of each territory to promote good risk behaviours and avoid conflicts of interest;
- Governance and oversight will be provided by a Remuneration Committee, or such similar body/individual as designed by the appropriate board;
- The remuneration policy will be adequately disclosed to all relevant stakeholders; and
- The remuneration policy will comply with the Solvency II Directive, including the local regulators’ interpretation of Solvency II.
3. How is remuneration attributed at Chesnara?
The directors of Chesnara Plc are remunerated in line with the assessment of the Remuneration Committee (the ‘Committee’). The Committee is an independent committee responsible for the evaluation, review, and reporting relating to remuneration matters of our directors and our wider workforce. The Committee is made up of at least three members and is comprised of not less than three independent non-executive directors. The Committee receives independent external advice on a number of matters where it considers it appropriate to do so. As part of the Committee’s responsibilities, an annual Directors’ Remuneration Report is produced to shareholders forming part of the Annual Report of the group. The annual Directors’ Remuneration Report can be found within all annual reports, available here.
The Directors’ Remuneration Report outlines a full breakdown of both our executive directors’ and non-executive directors’ remuneration. The assessment of the Committee is underpinned by our strategic focus across three key areas: maximising value from existing business, acquiring life and pension businesses which meet our strategic criteria, and enhancing value through profitable new business generation. The extent of remuneration to directors is assessed against, among other things, the financial performance of the group in the year.
Executive directors are remunerated through three primary means:
- Firstly, a basic salary is set by the Remuneration Committee having regard to external factors such as inflation or industry peers as well as internal factors such as enlargement of the group.
- Next, executive directors are awarded through our Short-Term Incentive Scheme (STIS) which is based upon three core measures: cash generation, total EcV earnings and group strategic objectives. These measures work together to encourage sensible executive behaviour and reflect an overall assessment of financial performance. The objectives assigned to each director are tailored to their roles and include major regulatory or business development initiatives that the Committee considers key to delivery of the business plan.
- Finally, the Long-Term Incentive Plan (LTIP) focuses specifically on incentivising executive directors’ long-term performance. Remuneration is determined against an executive directors’ work to increase shareholder value, aligning executive director reward and shareholder value.
Together, the STIS and LTIP work together to achieve a strong alignment between the interests of stakeholders and executive directors. To see the most recent figures, please refer to the Directors’ Remuneration Report found in the ‘Reports and Presentations’ section of our website.
Non-executive directors are remunerated through a fixed base fee with role-specific uplifts. Information on the current fee of our non-executive directors, can be found within our annual Directors’ Remuneration Report.
4. ESG Considerations
The effective consideration of ESG within our business practices is essential to us and we incorporate ESG considerations directly into the measures which our executive directors are assessed against in terms of remuneration. Incorporating ESG factors in this manner encourages the proper consideration and action of those matters important to our sustainability strategy.
Specifically, the amount awarded under the STIS requires the effective execution of the group’s strategic objectives. Accordingly, our executive directors must effectively achieve ESG objectives, such as continuing to develop appropriate environmental/ climate, people and sustainability policies and practices. The current percentage/ weight of ESG considerations can be found in the annual Directors’ Remuneration Report.
5. Review and Reporting
As detailed in the Directors’ Remuneration Report, the Remuneration Committee annually reviews the extent of remuneration as a whole, including the base salary/ fees of directors as well as their variable rates of pay, such as STIS. The report is subject to an advisory shareholder vote at the AGM, and the Committee actively encourages shareholder feedback on the approach to remuneration and its outcomes.
