Annual report and accounts 2023 - Flipbook - Page 92
A.G. BARR p.l.c. Annual Report and Accounts 2023
Directors’ Remuneration Report continued
Group performance
• Revenue increased by 18.2% to £317.6m.
• Adjusted profit before tax of £43.5m, an increase
of 13.3% on the prior year.
• Net cash at bank* at year end of £52.9m.
Shareholder experience
• An interim dividend of 2.5p per share paid in
October 2022 and a proposed final dividend for the
2022/23 financial year of 10.6p.
• The share price at the end of the financial year of
£5.24 was c.6% higher than at the start of the year.
Employee experience
• The Group paid bonuses for the 2021/22 financial
year to employees based on strong individual
performance.
• The Group increased salaries for the workforce in
April 2022 by an average of 3% and made specific
cost of living payments to the majority of the
workforce in August 2022 and January 2023.
• Flexible working arrangements continued in
2022/23 to support employees, with particular focus
on mental wellbeing.
Customer experience
• Strong support provided to the Group’s customers
notwithstanding the volatile market backdrop and
global supply chain issues.
Pay for performance in 2022/23
The Remuneration Committee remains committed
to a responsible approach to executive pay and
believes that variable pay should only be earned
for achievement against stretching targets.
Achievement against annual bonus targets – bonus
to be paid for strong performance
The executive directors were set a stretching target for
profit before tax (“PBT”), which accounts for 80% of
bonus opportunity for each executive director. The PBT
target range of £40m to £47m reflected the ambitions
for growth of the business set against challenging
external conditions, including the ongoing cost of living
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crisis and worldwide supply chain challenges. By
meeting and overcoming these external challenges, the
executive directors delivered strong growth in revenue
and achieved adjusted PBT* of £43.5m. In assessing
bonuses to be awarded, the Remuneration Committee
decided to adjust the profit outturn in the year for
c.£1.5m of adjusting items, primarily two exceptional
and unbudgeted cost of living allowances paid to the
vast majority of employees during the year; this was
wholly consistent with how wider workforce bonuses
were assessed. The Remuneration Committee
concluded that the executive directors will receive 75%
of the PBT portion of the bonus. The executive directors
did not receive either of the cost of living payments.
Each of the executive directors was also set stretching
individual strategic objectives tailored to their role and
responsibilities, which account for 20% of bonus
opportunity for each director. The Remuneration
Committee reviewed each of the directors’ strategic
objectives in turn, to fully understand the extent to
which each strategic objective had been achieved. The
Remuneration Committee was satisfied that strong
progress had been achieved by each of the executive
directors towards their strategic objectives and agreed
to award 75% of the maximum of 20% available for this
part of the bonus to each of the directors, resulting in
total bonus of 93.75% of basic salary for each director.
Further details of bonus awards can be found on pages
94 and 95.
Achievement against LTIP targets – 2020 LTIP
awards vest at 71.1%
The 2020 LTIP used the performance metrics of
cumulative Earnings Per Share (“EPS”) and Total
Shareholder Return (“TSR”) to assess the long-term
performance of the executive directors, with 50% of the
LTIP assessed on EPS and the balancing 50% assessed
on TSR. The cumulative EPS over the three years ended
29 January 2023 was 76.4p, which compared to the
EPS target range set in November 2020 of 65.0p to
75.0p. As a result, subject to the LTIP rules the EPS
element of the LTIP will vest in full in November 2023.
In respect of TSR, the Company delivered a TSR over
the assessed period which was above the median
performance but below the upper quartile performance
of the agreed peer set of companies in the FTSE 250.
As a result, subject to the LTIP rules the TSR element of
the LTIP will vest at 42.2%. Therefore, overall 71.1% of
the LTIP award will vest on the three year anniversary of
the award in November 2023. Further details can be
found on page 96.
The Committee has reviewed the outcomes arising
from the application of the Remuneration Policy during
the year and considers these outcomes to be fair and
appropriate. In particular, the Committee considered
the impact of any windfall gains over the vesting period.
However as the grant was deferred until November
2020 by which time share prices had stabilised
following the initial volatility caused by the start of the
pandemic, the Committee determined that there is no
evidence of any significant gain to account for when
the award vests. The Committee is confident that the
Remuneration Policy has operated as intended during
the year.
Other pay decisions in respect of 2022/23
Set out below are the other decisions made during the
year in respect of remuneration.
Base salary increases – in line with wider workforce
The Remuneration Committee reviewed executive
director salaries during the year and awarded increases
of 3% in line with the increases awarded to the wider
workforce.
Bonus awards – pay out at 125% for 2021/22
The Committee confirmed in March 2022 that the
bonuses payable in respect to the 2021/22 financial
year were a full award at 125% of base salary. As a result,
bonuses totalling £1.3m were paid to the executive
directors in April 2022.
