This third section of the Compensation Committee report (entitled the Implementation report) contains details of how the Company’s Executive Remuneration Policy was implemented in 2013. First, we present the details of the Compensation Committee – those setting and implementing the Executive Remuneration Policy – along with contextual information that has been made available to the committee. We then present a summary of the 2013 executive remuneration together with a summary of pay across the Group.

Governance in relation to compensation

Compensation Committee members

No. of meetings attended in 2013

1 Appointed to the committee on 12 June 2013.

2 Stepped down from the committee on 31 December 2013.

3 Appointed to the committee on 12 September 2013.

Jeffrey Rosen (chairman) 7
Roger Agnelli1 3
Jacques Aigrain1 3
Colin Day 7
Esther Dyson2 6
Philip Lader2 7
Ruigang Li1 2
Daniela Riccardi3 2
Hugo Shong1 2
Tim Shriver 7
Sol Trujillo1 3

Dr John Hood and Ms Nicole Seligman were appointed as non-executive directors of the Company and members of the committee with effect from 1 January 2014, subject to the confirmation of their appointment by share owners at the AGM.

During 2013, the Compensation Committee met seven times on a formal basis, as noted above, with additional ad hoc meetings held as needed. These largely related to formalising policies as required under the new remuneration reporting regulations.

None of the committee members has any personal financial interest (other than as a share owner) in the matters to be decided by the committee, potential conflicts of interest arising from cross-directorships or day-to-day involvement in running the Group’s businesses.

The terms of reference for the Compensation Committee are available on the Company’s website and will be on display at the AGM, as set out in the Notice of AGM.

Advisors to the Compensation Committee

The Compensation Committee regularly consults with Group executives. In particular, the committee will invite certain individuals to attend meetings, including the Group chief executive (who is not present when matters relating to his own compensation or contracts are discussed and decided), the Company Secretary, the chief talent officer and the worldwide compensation and benefits director. The latter two individuals provide a perspective on information reviewed by the committee and are a conduit for requests for information and analysis from the Company’s external advisors.

External advisors

The committee continued to retain Towers Watson throughout 2013 as independent advisors. Towers Watson is engaged to provide advice to the Compensation Committee and to work with management on matters related to our Executive Remuneration Policy and practices. Towers Watson is a member of the Remuneration Consultants Group and has signed up to the code of conduct relating to the provision of advice in the UK. In light of this, and the level and nature of the service received, the committee remains satisfied that the advice is indeed objective and independent. No other services are provided by Towers Watson at a Group level, although some of the operating companies may engage at a local level. In 2013, Towers Watson received fees of £144,575 in relation to the provision of advice to the committee. The committee also receives external legal advice, where required, to assist it in carrying out its duties.

Chapter 9 of 13