118 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 119 REMUNERATION REPORT CONTINUED G O VE R NAN As our strategic transformation continues Salary increases were scaled from 6% for Incentive outcomes Remuneration Committee C and given that the Restricted Share scheme The Company’s resilient performance lower paid employees, 5% for low-mid tier E is only in its third year of operation, the despite economic headwinds was reflected roles, 4% for mid-senior roles and 3% for the WHO IS ON THE COMMITTEE Remuneration Committee has concluded in the incentive outturns. The 2023 annual more senior executives. As detailed in last that the current remuneration structure bonus was based on adjusted EBITA (60%), year’s report, a similar approach was taken The Committee is composed The current members are:Anna Manz and Duncan Painter stepped down as continues to support our strategic goals and for the 2023 salary increases, with uplifts of independent • Sharmila Nebhrajani (Chair) members of the Committee in the year. Edward Bonham enables the business to remain agile in a cash conversion (10%), individual strategic of up to 6% applied for lower paid staff. Non-executive Directors.Carter joined as a Committee member in April 2023 targets (20%), as well as a scorecard of • Salman Amin dynamic and cyclical sector where viewer ESG priorities (10%). Financial targets were In January 2023, a one-off cost of living • Andrew Cosslett Full details of attendance at Committee meetings can behaviours continue to evolve. We therefore payment was made providing £1,000 to • Edward Bonham Carter be found in the table on page 82 propose to roll forward the previous policy set in the context of advertising market all our staff earning up to £75,000. Although uncertainty, with targets set to be Detailed biographies can be found on pages 77 and 78 with only minor amendments. stretching but realistic. the 2023 Employee Bonus outcome of £764 for wider staff was lower than prior years, As part of the policy renewal process we While adjusted EBITA achievement was at reflecting the lower than expected EBITA, engaged with a number of our major the lower end of the targeted range, cash management elected to make a one-off OUR ROLE investors. Consistent with the messaging conversion was ahead of planned results additional payment to staff of £636. This received in prior years, it was clear that while combined payment of £1,400 reflects the Following each meeting, the The main role of the Committee is to: the majority of investors and mainstream and progress was made against our ESG exceptional levels of commitment shown by Committee communicates its • Review the ongoing appropriateness, relevance and effectiveness of the Remuneration Policy, including in relation proxy voting agencies continue to support scorecard measures. As noted above, the employees in delivering the transformation main discussion points and to retention and development, whilst taking into account workforce remuneration and related policies, and the business also made significant progress on findings to the Board. alignment of incentives and reward our approach to pay, a minority of investors executing our strategic goals in response to of the business. retain reservations. Although we are mindful The Committee’s terms of • Propose to shareholders changes to the Remuneration Policy as appropriate of the diverse views of our investors, we have the evolving marketplace. The overall bonus Reflecting our broader ethos, ITV remains reference can be accessed on • Approve the implementation of remuneration arrangements for the Chair, Executive Directors, Management outcome for the Executive Directors was committed to ensuring all colleagues earn our website www.itvplc.com/Board and other senior executives (together the Senior Executive Group) considering arrangements for the wider opted to retain the current pay approach as it 56.41% of maximum, with one-third of the investors/governance continues to support our strategy. The 2021 at least the real Living Wage. The Company employee group policy represented a major shift in approach bonus award deferred into shares for three remains similarly committed to Diversity and • Approve the design of the Company’s annual bonus arrangements and long-term incentive plans, including the and the first Restricted Share awards under years. This represents a significantly lower in addition to its gender pay gap data, ITV has performance criteria that apply for the Senior Executive Group this policy will not be released until 2026; outturn than the 81.72% achieved by both voluntarily published its ethnicity pay gap • Determine the award levels for the Senior Executive Group based on performance against annual bonus targets it therefore feels premature to make further directors for 2022, primarily reflecting information since 2018, one of only a small and long-term incentive conditions radical change at this stage. the economic backdrop impacting number of FTSE companies to do so. ITV has financial performance. also been calculating its disability and The Board continues to maintain dialogue This is also the first year in which the LGBTQ+ pay gaps since 2020 and published MEETINGS IN 2023 with investors, and the Remuneration Restricted Share awarded to our Executive this information for the first time in 2023. Committee has engaged with them on Directors will vest. Although the single figure In addition to Committee January September numerous occasions over recent years. includes a value for the first award granted in Concluding remarksmembers, the Executive • Indicative LTIP and PSP performance• Financial performance update In many cases remuneration proposals Directors, Chief People • Annual review of the Chair’s fees • Employee reward framework, including review have been adapted in direct response to 2021, in practice these awards will only be As a Committee, we are committed to Officer, General Counsel and released in 2026 following completion of a making responsible and measured decisions Company Secretary, Group • Pay gap reporting and CEO pay ratiosof remuneration and related policies and their feedback. In line with our normal two year holding period. Under this pay around pay. I hope this report provides clear Reward Director and • Compliance with shareholding guidelinesremuneration trends approach, we will continue to keep the model, long-term incentive award levels and transparent disclosure, including the independent adviser Deloitte • 2023 AGM season update effectiveness of our approach to pay, attend meetings as required.February • Remuneration Policy and Shareholder developments in the market, and evolving were reduced by 50%, but with performance wider context informing these decisions. • Bonus outcomes for 2022 alignment primarily provided via the share As a Committee we will continue to engage Attendees do not take part Engagement update investor sentiment under review.price. While the short-term share price in decisions relating to their • Performance outcomes for 2020 LTIP and PSP awardsDecember with shareholders whenever possible to • Bonus targets for 2023 performance has been disappointing, listen to feedback and discuss pay matters. own remuneration and • Review of 2023 bonus performance In terms of implementing the policy for both Executive Directors maintain sizeable In the meantime, I look forward to your potential conflicts are • Financial underpin target for 2023 ESP awards 2024, the Committee has approved a salary suitably mitigated. • 2024 Bonus framework and targets interests in ITV shares, in excess of the support for both the Remuneration Policy • Remuneration Report and compliance against the • 2024 Remuneration Policy Renewal increase of 3% for both the Chief Executive requirement under the Shareholding and the Report at the upcoming AGM. Remuneration Policy and Group CFO & COO which is in line with • Review of the Senior Executive Group • Annual pay review other senior executives but below the Guidelines, and have personal financial exposure that mirrors that of our investors. SHARMILA NEBHRAJANI OBE • Adviser independence 5%-6% increase applied for the majority of As noted above, the strategic transformation CHAIR, REMUNERATION COMMITTEE • Gender and ethnicity pay gap reporting and CEO employees. Incentive opportunities for both of the business continues and the Board 7 March 2024pay ratios executives will be consistent with prior years. remains confident that the investments June The performance measures and weightings made today will be reflected in the • Approach for Remuneration Policy review for the 2024 annual bonus are similar to long-term performance of the business. • 2023 awards under the executive and SAYE plans 2023 with the addition of a cost savings • Committee terms of reference review metric (worth 10% of the award) to reflect Wider workforce the scale and importance of this priority, The Committee continues to focus on wider with 50% linked to adjusted EBITA. workforce pay, recognising that the cost of Consistent with prior years the targets for living continues to be a real concern for a ANNUAL REVIEW the annual bonus have been set to reflect number of our colleagues. In relation to 2024 A review of the performance • In 2023 an internally facilitated Board evaluation was undertaken, which included a review of the Committee. internal and external forecasts for the salary increases, the overall aim was to of the Committee is The results are summarised on pages 100 to 101 Company, including significant budgeted provide all employees with a meaningful conducted each year.• Overall, the evaluation concluded that the Committee is working effectively and responding appropriately to its cost savings and critical investment spend. increase to their base salary which reflected terms of reference We remain mindful of the impact of share economic realities. While the high • The Committee recommended a focus on wider comparatives in relation to international remuneration price volatility on future share awards and inflationary environment impacts everyone, investor concerns regarding potential the Committee recognises lower earning windfalls. The Committee will consider this employees suffer the consequences more at the point of grant and at vesting. Where acutely. Salary increases for more senior necessary, the Committee retains the ability roles were therefore reduced to help fund to adjust vesting outcomes to ensure they more meaningful increases for employees at are appropriate.lower pay levels.