122 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 123 G DIRECTORS’ REMUNERATION POLICY O VE R NAN The following sets out the proposed ITV Directors’ Remuneration Policy C BENEFITS E (the Policy). The Policy is subject to a binding shareholder vote at ITV’s Purpose and link to strategy Ensures the overall package is competitive and provides financial protection for employees and their families. AGM on 2 May 2024 and, if approved, will apply from this date.OperationThe Company provides a range of market competitive benefits, which may include travel-related benefits, participation in all-employee share schemes, private medical insurance and other insurance benefits. Additional benefits may also be provided in certain circumstances, if required for business needs. For example (but not The previous Policy was last renewed at the 2021 AGM, when the Company implemented a new Restricted Shares structure.limited to), relocation expenses, housing allowance and education support. Maximum potential Set at a level which the Committee considers to be appropriately positioned taking into account typical market levels for The Committee discussed the current Policy over a series of meetings throughout 2023 and early 2024, debating its continued paymentcomparable roles, individual circumstances and the overall cost to the business. effectiveness given the strategic priorities of the business, the cyclical nature of the sector, evolving market trends and investor guidance. While there is no maximum monetary value for benefits, any benefits provided will be reasonable in the context of relevant We also engaged with major investors in order to better understand their views around our pay approach. Input was sought from the market practice, individual circumstances and overall cost to the business. management team, while ensuring that conflicts of interest were suitably mitigated. An external perspective was provided by the Committee’s independent advisers. The Committee undertook an extensive consultation process with major shareholders before finalising In addition, the Company may reimburse relocation expenses and/or provide for tax equalization arrangements. Participation the Policy. The key features of our approach were also assessed against the principles of clarity, simplicity, risk management, predictability, in any tax-approved all-employee share plans will be limited by the maximum permitted under the relevant legislation. proportionality and alignment to culture. As noted in the Chair’s statement, the Committee determined that the existing Restricted Shares structure continues to be an appropriate and effective long-term incentive vehicle for ITV, recognising that the first awards under this structure will vest in 2024 and will not be released Variable pay policy for Executive Directors until 2026. The Policy presented for shareholder approval at the 2024 AGM therefore contains no significant changes from the 2021 Policy. ANNUAL BONUS SCHEME (BONUS) AND DEFERRED SHARE AWARD PLAN (DSA) Minor updates have been made to the detail of the Policy to ensure it continues to operate as intended. The proposed Policy retains the key best practice features as applied under the Policy approved in 2021.Purpose and link to strategyIncentivises executives and colleagues to achieve key strategic outcomes on an annual basis. Focus on key financial metrics and corporate objectives to deliver the business strategy. Executive Director Remuneration Policy Table The element of the Bonus compulsorily deferred into shares rewards delivery of sustained long-term performance, provides Fixed pay policy for Executive Directors alignment with the shareholder experience and supports the retention of executives. Operation Measures and targets are set annually, normally based on business plans at the start of the financial year and pay-out levels BASE SALARY are determined by the Committee following the year end based on performance against objectives. Purpose and link to strategyReflects the individual’s skills, responsibilities and experience. Supports the recruitment and retention of Executive Paid once the results have been audited. Financial results used for bonus calculation will be subject to suitable review (e.g. Directors of the calibre required to deliver the business strategy within the competitive media market.sign-off by Audit and Risk Committee) before consideration by the Committee. OperationNormally reviewed annually and paid monthly in cash. Consideration is typically given to a range of factors when determining The Committee has the discretion to amend the bonus outcome if any formulaic assessment of performance is considered salary levels, including: to be inappropriate taking into account factors such as a balanced view of overall business or individual performance for the year, and the original intentions of the plan. • Personal and Company-wide performance • Scope of role and experience Not more than two-thirds of the Bonus is delivered in cash with the balance deferred into shares under the DSA normally for a period of three years. • Typical pay levels in relevant markets for each executive whilst recognising the need for an appropriate premium to attract and retain superior talent, balanced against the need to provide a cost-effective overall remuneration packageDuring the deferral period share awards may be reduced or cancelled in certain circumstances. Dividends or equivalents may • The wider employee pay review be earned on deferred shares. Maximum potential Ordinarily salary increases will be in line with the average increase awarded to other employees in the Company. Increases Maximum potential The maximum Bonus opportunity for any Executive Director will not exceed 200% of salary. paymentmay be made above this level to take account of individual and business circumstances, which may include factors such as: paymentThe current maximum Bonus opportunities are 180% of salary for the Chief Executive and 165% of salary for the Group an increase in size or scope of the role or responsibility; or an increase to reflect the individual’s development and CFO & COO. Increases above the current opportunities, up to the maximum limit, may be made to take account of individual performance in the role. circumstances, which may include: an increase in size or scope of the role or responsibility; a change in business While there is no maximum, salary levels for each individual are responsibly set taking into account the factors described circumstances; or an increase to reflect the individual’s development and performance in their role. above. Performance metrics Performance measures and targets are set by the Committee each year based on corporate objectives closely linked to Performance metricsNone, although overall individual and business performance is considered when setting and reviewing salaries.strategic priorities of the business. The majority of the Bonus opportunity will be based on corporate and financial measures. The remainder of the Bonus will be based on performance against individual and/or strategic objectives. Details of the performance criteria for the Bonus are set out in the Annual Report on Remuneration. The payment schedule for each metric will be scaled based on the stretch of the underlying target. Normally, up to 20% of the maximum opportunity RETIREMENT BENEFITS will be received for threshold performance. Purpose and link to strategyTo provide competitive post-retirement benefits or cash allowance as a framework to save for retirement. Supports the recruitment and retention of Executive Directors of the calibre required to deliver the business strategy within the competitive media market. OperationExecutives can choose to participate in the ITV defined contribution scheme, receive a cash allowance or receive payments into a personal pension or a combination thereof. Contributions are set as a percentage of base salary. Post-retirement benefits do not form part of the base salary for the purposes of determining incentives. Maximum potential The maximum benefit will normally be capped at a level comparable to the benefit available to the wider employee base. This paymentis currently 9% of salary. Performance metricsNone