134 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 135 REMUNERATION REPORT CONTINUED G O VE R NAN Restricted Share awards made in 2023 – Audited Remuneration Policy application in 2024 C On 28 March 2023 awards were made under the ITV plc Executive Share Plan (the ITV ESP) to Carolyn McCall and Chris Kennedy as set out Executive Directors E below. The following section provides details of how the Policy will be implemented in 2024. Number of Salary share options Performance Performance measure% salary awarded(nil cost)1Value at award date period endsHolding periodRelease date Salaries are paid in line with the Policy. Both Executive Directors received an increase of 3% from 1 January 2024 which is in line with other Carolyn McCall132.51,643,105£1,338,80228 March 20262 years28 March 2028senior executives, but below the 5-6% increase applied for the majority of employees. When considering salary increases for the wider Chris Kennedy112.5998,114£813,26328 March 20262 years28 March 2028workforce, the overall aim was to provide all employees with a meaningful increase to their base salary which reflected the broader economic 1. Nil cost options were granted based on the average share price on the three trading days preceding the award which was 81.48 pence. context. While the high inflationary environment was impacting all employees, it was recognised that lower paid employees were being impacted more acutely. Salary increases for the more senior roles were reduced to help fund more meaningful increases for employees at lower pay levels. The salary increases therefore were scaled from 6% for lower paid employees, 5% for mid-low tier roles, 4% for mid-high tier The awards are over restricted shares with grant levels reduced by 50% compared to the annual LTIP awards granted in previous years. roles and 3% for the more senior executives. Awards will normally vest after three years following the date of award subject to the satisfaction of a performance underpin assessed at 2024 Salary 31 December 2025. As the awards have a performance underpin, there are no performance condition weightings applicable, nor is there a Carolyn McCall £1,040,729 threshold-max vesting range. Any vested awards would then be subject to a two year holding period.Chris Kennedy £744,587 For the awards granted in 2023, the Committee will retain the ability to reduce vesting of the Restricted Shares (including to nil) where:Taxable benefits and pension • Adjusted Return on Capital Employed is below the Company’s cost of capital; and/or These are provided in line with the Policy. Both Executive Directors receive private medical cover, car-related benefits, and a cash allowance in lieu of participation in any ITV pension scheme. • There is a material weakness in the underlying financial health or sustainability of the business Both Executive Directors receive a cash allowance in lieu of pension of 9% of salary, which is aligned with the wider employee group. When assessing the latter, the Committee will consider all factors deemed relevant at the time, including for example, progress against execution of the strategy, performance against financial and non-financial KPIs and the nature of the wider trading environment. In line with Annual Incentive – Bonus (cash and shares) best practice, the Remuneration Committee will retain the discretion to adjust any incentive awards where vesting outcomes are considered The maximum bonus opportunity for 2024 remains unchanged: Carolyn McCall – 180% of salary; and Chris Kennedy – 165% of salary. Awards to be inappropriate. Further detail on the assessment of the performance underpin will be disclosed at the time of vesting in 2026.made to Executive Directors through the bonus will be paid two-thirds in cash and one-third deferred into shares under the DSA. As a further safeguard malus and clawback provisions may be operated at the discretion of the Committee in respect of any element of these The targets that will apply for the 2024 annual bonus have been set taking into account internal and external forecasts for company and awards. Under malus, unvested share awards (including any portion of the award subject to a post-vesting holding period) can be reduced market performance and continued strategic investments. Cost savings objectives have been included for 2024, recognising the strategic (down to zero if considered appropriate) or be made subject to additional conditions. Clawback allows for repayment of shares previously importance of reshaping the business for the future. The Board considers the actual targets for 2024 to be commercially sensitive at this time, received following vesting or release from a holding period if applicable. Malus/clawback can be operated up to six years from the relevant date however, envisage providing retrospective disclosure of these targets in next year’s report. of grant for Restricted Share awards. The circumstances in which the operation of these provisions would be applied may be considered from time to time but currently include material misstatement of financial results, gross misconduct or fraud and material reputational damage. The Committee may adjust bonus targets or outcomes to reflect significant one-off events (e.g. major transactions), foreign exchange The Committee maintains sufficient scope in the ITV ESP rules to exercise discretion and judgement in line with the spirit of the Code.movements or material changes to assumed plan conditions to ensure that the plan continues to reward performance fairly. Chair and Non‑executive Directors – AuditedThe Committee may amend the bonus pay-out should any formulaic assessment of performance not reflect overall performance in the year. The table below sets out in a single figure the total remuneration for Non-executive Directors for the financial year. The annual fee for the Chair was £400k which is unchanged from appointment. For 2023 , the Non-executive Directors received a 4% increase to the base fee, Restricted Share awards which was the first increase to fees paid to Non-executive Directors since 2016. No increases were made to the other fees. Awards in 2024 will be made to the Executive Directors with a value of 132.5% of salary for Carolyn McCall and 112.5% of salary for Chris Kennedy. These levels remain unchanged from the awards made in 2023. FeesTaxable benefits1Total 202320222023202220232022Awards will normally vest after three years following the date of award subject to the satisfaction of a performance underpin. Any vested Notes£000£000£000£000£000£000 Andrew Cosslett (Chair)24001241–401124awards would then be subject to a two year holding period. Dawn Allen318–––18– For 2024 awards, in line with the performance underpin that applied to awards made in 2023, the Committee will retain the ability to reduce Salman Amin7370117471 vesting of the Restricted Shares (including to nil) where: Peter Bazalgette (former Chair)4–336–6–342 Edward Bonham Carter5102951110396• Adjusted Return on Capital Employed is below the Company’s cost of capital; and/or Graham Cooke7370117471 • There is a material weakness in the underlying financial health or sustainability of the business Margaret Ewing8885118986When assessing the latter, the Committee will consider all factors deemed relevant at the time, including for example, progress against Marjorie Kaplan623–––23–execution of the strategy, performance against financial and non-financial KPIs and the nature of the wider trading environment. In line with Mary Harris72577242781 best practice, the Committee will retain the discretion to adjust any incentive awards where vesting outcomes are considered to be Gidon Katz868301236953 inappropriate. Further detail on the assessment of the financial underpin will be disclosed at the time of vesting. Anna Manz95276115377 Sharmila Nebhrajani108880–18881Malus and clawback: Malus and clawback provisions may be operated at the discretion of the Committee in respect of any cash and deferred share elements of the bonus and Restricted Share awards. Under malus, unvested share awards (including any Restricted Share awards Duncan Painter116770116871subject to a post-vesting holding period) can be reduced (down to zero if considered appropriate) or be made subject to additional conditions. 1,0771,11310401,0871,153Clawback allows for repayment of bonuses previously paid and/or shares previously received following vesting or release from a holding period 1. The amounts disclosed in the table above relate to the reimbursement of taxable relevant travel and accommodation expenses (and associated taxes) for attending Board if applicable. Malus/clawback can be operated up to four years following the start of the relevant bonus year for bonuses (for cash and shares), meetings and related business. In addition, Peter Bazalgette received private healthcare for the time he served as a director.and up to six years from the relevant date of grant for Restricted Share awards. The circumstances in which the operation of these provisions 2. Andrew Cosslett joined the Board on 1 June 2022 as a Non-executive Director. He was appointed the Chair of the Board on 29 September 2022. He received the basic would be applied may be considered from time to time but currently include material misstatement of financial results, gross misconduct or NED fee up until his appointment as Chair. Following his appointment as Chair his annual fee is £400,000. 3. Dawn Allen joined the Board and Audit & Risk Committee on 2 October 2023.fraud and material reputational damage. The Committee maintains sufficient scope in the ITV plc Executive Share Plan rules to exercise 4. Peter Bazalgette stepped down from the Board on 29 September 2022.discretion and judgement in line with the spirit of the Code. 5. Edward Bonham Carter became a member of the Remuneration Committee in April 2023. 6. Marjorie Kaplan joined the Board on 1 September 2023. 7. Mary Harris stepped down as Chair of the Remuneration Committee on 29 April 2022 and from the Board on 3 May 2023. 8. Gidon Katz joined the Board on 18 July 2022. 9. Anna Manz stepped down from the Board on 31 August 2023. 10. Sharmila Nebhrajani was appointed Chair of the Remuneration Committee on 29 April 2022. 11. Duncan Painter stepped down from the Board on 30 November 2023.