The Policy is subject to independent oversight and control by the Group Remuneration Committee (the “Committee”) for Standard Life Aberdeen plc (the “Company”), which is the ultimate parent company of the Standard Life Aberdeen group of companies (the “Group”).
1.1 The Committee
During 2019 the Remuneration Committee was made up of independent non-executive Directors: Richard Mully (Chairman until 14 May 2019), John Devine (acting Chair between 14 May 2019 and 1 October 2019), John Asquith (joined as Chairman on 1 October 2019), Jutta af Rosenberg, Cathleen Raffaeli and Cecilia Reyes (from 1 September 2019).
The role of the Committee is to consider and make recommendations to the Board in respect of the Policy across the Group, including:
- rewards for the executive Directors, senior employees and the Chairman
- the design and targets for any employee share plan
- the design and targets for annual cash bonus plans throughout the Group
- changes to employee benefit structures (including pensions) throughout the Group.
During 2019, the Committee met 8 times. Details of the Committee meetings are provided in the Group’s 2019 Annual Report and Accounts. More information on the Committee’s terms of reference can be found in the Board Charter.
The remuneration for all material risk takers, as captured under the regulatory regimes impacting the Group, noted below, is approved by the Committee.
Remuneration Committees are in place for Standard Life Savings Limited (SLSL) and Elevate Portfolio Services Limited (EPSL). The role of the Committees is to consider and make recommendations to the Group Remuneration Committee in respect of remuneration policy and practice across SLSL and EPSL.
1.2 Risk management and business strategy
The Group ensures that the Policy is in line with business strategy, objectives, values and long-term interests by including representatives from independent third parties and other operating committees as advisors to the Committee where appropriate. Business unit heads may be consulted if appropriate and provided that any such consultation adheres to the principles and guidelines of regulations that apply to the Group.
The Group ensures that the Policy promotes sound and effective risk management and does not encourage risk taking in excess of the Group’s levels of tolerated risk by regular review of the Policy by the Committee. This ensures that arrangements and awards reflect risk awareness and compliance. In addition, awards are subject to Committee receipt of a report from the Risk and Capital Committee, as appropriate. Individual employee awards for heads of control functions and Material Risk Takers are subject to Committee review and supervision.
The Group appoints an independent remuneration consultant as advisor to the Committee on remuneration design and compliance with regulatory guidance. During the year, the Committee took advice from Deloitte LLP (a member of the Remuneration Consultants Group), who were appointed as external advisors to the Committee on 19 September 2017. The contractual terms for independent third parties are governed by the Group Procurement Policy.
1.3 Conflicts of interest
The Policy is designed to avoid conflicts of interest between the Group and its clients.
The Policy should at all times adhere to local legislation, regulations or other provisions. In circumstances or in jurisdictions where there is any conflict between this Policy and local legislation, regulations or other provisions then the latter prevail. In such case any amendments and the scope of such amendments will be set out in an attached appendix to the Policy and will adhere as closely as possible to the underlying principles of the Policy.
Where the Committee receives input from management on the remuneration arrangements in operation across the Group this never relates to their own remuneration.
Specific measures are in place to avoid conflicts of interest as regards control functions as set out below.
1.4 Control Functions
The Group will ensure that, as appropriate, senior employees engaged in a control function are independent from the business units they oversee and have appropriate authority to undertake their roles and duties.
Where scorecards are used to determine remuneration, employees have a meaningful portion of any bonus based on independent scorecards linked to performance of the respective functions. Variable remuneration for control function staff is determined by the achievement of their own functional objectives. The successful completion of these objectives influences the size of allocation which the function receives from the main bonus pool.
1.5 Identification of Code Staff
Standard Life Aberdeen identifies individuals who have a material impact on the risk profile of the Company and individuals who have a material impact on any regulated entities or funds managed under the control of the Company (“Code Staff”). The relevant regulated technical standards are taken into account in identifying Code Staff.
The Committee is responsible for undertaking a review of the application of the principles under the relevant technical standard no less frequently than annually.