The Terms of Reference of Johnson Matthey's Management Development and Remuneration Committee
1. Purpose and Duties
(1) The purpose of the Committee is:
(a) to determine on behalf of the Board fair remuneration for the Chief Executive, the Executive Directors and the Chairman, which, while set in the context of what the Company can reasonably afford, recognises their individual contributions to the Company’s overall performance, and
(b) to assist the Board in ensuring that the current and future senior management of the Group are recruited, developed and remunerated in appropriate fashion.
(2) The Committee shall:
(a) Determine the remuneration and terms and conditions of employment (including in respect of pension entitlement) of the Chief Executive and the Executive Directors and the remuneration and terms of appointment of the Chairman.
(b) Review the proposals of the Executive for recommendation to the Board on:
- share option schemes
- executive bonus/incentive schemes
- employee share participation schemes
(c) Review training, development and succession plans for senior management of the Company.
(d) Review the disclosure to be made of directors’ remuneration in the Annual Report.
2. Constitution and Membership
(1) The Committee is a Committee of the Board.
(2) Members of the Committee shall be appointed by the Board.
(3) All members of the Committee shall be independent non-executive directors of the Company.
(4) The Chairman of the Committee shall be appointed by the Board.
(5) The Chairman of the Committee shall be an independent non-executive director.
(6) The Committee shall be made up of at least three members.
(7) Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Chairman, the Chief Executive, the Director of Human Resources and external advisers may be invited to attend for all or part of any meeting as and when appropriate.
3. Secretary
The Director of Human Resources shall act as the Secretary of the Committee.
4. Quorum
The quorum necessary for the transaction of business shall be two.
5. Frequency of Meetings
The Committee shall meet at least twice a year and at such other times as the Chairman of the Committee shall require.
One of the meetings shall be held prior to the normal 1 August remuneration review date for directors and senior management.
6. Notice of Meetings
(1) Meetings of The Committee shall be summoned by the Secretary of the Committee at the request of any of its members.
(2) Unless otherwise agreed, notice of each meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each member of the Committee, any other person invited to attend (which will normally include the Chief Executive and the Director of Human Resources) and all other non-executive directors, before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees as appropriate, at the same time. Other executives shall attend at the request of the Committee.
7. Minutes of Meetings
(1) The Chairman of the Committee shall make an oral report of the findings and recommendations of the Committee to the Board at the next Board meeting after each Committee meeting.
(2) The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance.
(3) Minutes of Committee meetings shall be circulated to all members of the Committee and, once agreed, to all other members of the Board.
8. Annual General Meetings
The Chairman of the Committee shall attend the Annual General Meeting prepared to respond to any shareholder questions on the Committee’s activities.
9. Advice
The Committee shall have the authority to seek any information that it requires from any officer or employee of the Company or its subsidiaries. In connection with its duties the Committee is authorised by the Board to take such independent advice (including legal or other professional advice, at the Company's expense, as it considers necessary, including requests for information from or commissioning investigations by external advisers. The Committee will inform the rest of the Executive as necessary of such requests.