Directors' remuneration policy
The current Directors’ remuneration policy was approved by the shareholders of Schroders plc at the 2023 AGM, on 27 April 2023, and is expected to apply for three years from that date. It is set out on pages 92 to 98 of our 2022 Annual Report and Accounts.
Prior to the approval of the new policy at the 2023 AGM, we continued to manage remuneration in line with the Directors’ remuneration policy as detailed in the 2022 Directors Remuneration Report on pages 76 to 107 of our 2022 Annual Report and Accounts. This included the executive Directors’ annual bonus awards in respect of 2022 performance and the LTIP awards granted to them in March 2023. The previous policy in full is available on pages 82 to 92 of our 2019 Annual Report and Accounts.
Our remuneration philosophy
Our purpose is to provide excellent investment performance to clients through active management. By serving clients, we serve wider society. Channelling capital into sustainable and durable businesses accelerates positive change in the world. Paying our people based on the value we create for our stakeholders will secure our ability to deliver our purpose. This is why the remuneration principles underpinning how all our people are paid is centred on creating alignment with our key stakeholder groups.
How our approach to remuneration creates alignment with our key stakeholders
Our remuneration principles | Our executive Director remuneration approach |
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Aligned with clients A proportion of variable remuneration for higher-earning employees and material risk takers is granted as fund awards, which are notional investments in funds managed by the Group. This aligns the interests of employees and clients. |
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Aligned with shareholders A proportion of variable remuneration for higher-earning employees and material risk takers is granted in the form of deferred awards over Schroders shares. This aligns the interests of employees and shareholders. Executive Directors and other members of the GMC are required, over time, to acquire and retain a significant holding of Schroders shares or rights to shares. Vested share-based awards from bonuses are unable to be exercised until the requirement has been met. |
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Aligned with financial performance Our ratio of operating compensation costs to net operating income guides the total spend on remuneration each year. This is recommended by the Committee to the Board. |
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Designed to promote the long-term, sustainable success of the Group Sustainable leadership is key to our business and flows from our long-term outlook. Performance against sustainability goals is considered in the annual compensation review for individuals who have the ability to influence our investment and business operations, ensuring alignment with our commitment to responsible practices. |
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Competitive Employees receive a competitive remuneration package, which is reviewed annually and benchmarked by reference to the external market. This allows us to attract, retain and motivate highly talented people, regardless of gender, age, race, sexual orientation, disability, religion, socio- economic background or other diversity facet. |
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Designed to encourage retention Deferred variable remuneration does not give rise to any immediate entitlement. Awards normally require the participant to be employed continuously by the Group until at least the third anniversary of grant in order to vest in full. |
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