47153 AG Barr Annual Report 2025 AW4 SQ WEB - Flipbook - Page 89
Strategic Report
Employee engagement
The Committee recognises the importance of
culture and effective employee engagement
in the creation of a healthy and productive
workplace. We review workforce remuneration,
the related policies and the alignment of
incentives and rewards with culture, and take
these into account when determining the policy
and practice for executive director remuneration.
The Board’s role is to ensure that effective
processes and procedures are in place for
gathering workforce views and engaging in
meaningful dialogue with employees. All
members of the Committee were able to speak
directly to colleagues at workforce engagement
sessions across Company locations that were
planned throughout the year. In addition, the
Board receives regular updates on wider
workforce engagement initiatives throughout the
year; the topic regarding how executive directors’
remuneration aligns with wider Company pay
policy is included as a specific discussion item at
workforce engagement sessions at least once
per annum. During the year the Chair of the
Committee was able to attend several of the
sessions to discuss this topic. Further information
on employee engagement is included in the
Corporate Governance Report on pages 72 to 74.
Looking forward – implementation of
Policy for 2025/26
Set out below are the decisions anticipated to be
made during 2025/26 in implementing the Policy.
2025/26 Base salary increases –
reflecting roles and responsibilities
Effective from 1 April 2025, Euan Sutherland
will receive a 3% salary increase, in line with the
average salary increase for the wider workforce.
I wrote to shareholders in early 2025 to explain
the rationale for Stuart Lorimer receiving the
3% annual pay award plus a further 13.3%
exceptional salary increase effective from 1 April
Corporate Governance
2025. This proposed additional increase followed
a market benchmarking exercise commissioned
by the Committee in Autumn 2024 and reflects
his expanded role and responsibilities as Chief
Finance and Operating Officer, a desire to close
a significant gap to the market in base salary as
well as recognising his proven competence and
contribution to the Company over his 10 year
tenure. Historically, all of Stuart Lorimer’s base
salary increases have been below or aligned to
the wider workforce increases and the Committee
felt it was important to reflect his new role and
contribution from 1 April 2025. The Committee
considered both the fixed and variable pay
implications of this award and felt satisfied that,
relative to the accountabilities of the Chief Finance
and Operating officer, internal differentials,
external market data and Stuart Lorimer’s
expertise and value to the Company, this award
would be appropriate.
The new total target remuneration opportunity as
a result of the increase to base salary positioned
the Chief Finance and Operating Officer below
the market median for the FTSE 250 and a
size-adjusted comparison to the closest +/- 50
companies to ensure consideration of the relative
size of the Company against peers in the
Committee’s decision-making.
Further details can be found on page 90.
2025/26 Pension contributions –
aligning to the wider workforce for all
executive directors
Euan Sutherland receives a pension contribution
in line with the Policy of 8% of salary. From 1 April
2025, Stuart Lorimer will also receive a pension
contribution of 8% of salary (previously 24% of
salary) to bring his rate in line with that available
to the wider workforce.
Further details can be found on page 97.
Accounts
2025/26 Annual bonus – to be operated
in line with Policy
The Committee intends to operate the bonus
scheme for the year ending 31 January 2026 in
line with the Policy, with maximum awards at 125%
and continuing to be subject to a combination
of Adjusted PBT* targets and individual
strategic objectives.
Details of bonus and performance measure
weightings are provided on page 94.
Performance targets and ranges for these
bonus awards will be disclosed retrospectively
in the Annual Report on Remuneration for the
year ending 31 January 2026.
2025/26 LTIP – awards at normal level
of opportunity with targets based on
cumulative EPS, TSR and environmental
sustainability measures
In line with the Policy, the Committee intends
to grant LTIP awards at the normal maximum
opportunity of 150% of base salary in April this
year. These LTIP awards will be assessed
cumulatively over the following three years
based on stretching targets set across three
performance measures: EPS, TSR and
environmental sustainability.
EPS is a key performance indicator for the
Company and shareholders, and remains a highly
credible measure of long term performance.
However, the overall impact of any future Deposit
Return Scheme (‘DRS’) is very challenging to
assess with acceptable accuracy at this early
stage. As such, the EPS targets have been set
specifically not taking into account the future
impact of the introduction of any DRS. The
Committee has resolved to monitor the impact
of any DRS post its implementation with the
expectation that the EPS targets set in 2025
will be considered ahead of the vesting period.
This will enable any tangible DRS impact to be
considered and potentially included in the
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