Remuneration Committee terms of reference

Approved on 14 June 2023

Membership

The Remuneration Committee (Committee) shall comprise at least three Commissioners. Appointments to the Committee shall be made by the Board.

Only members of the Committee have the right to attend Committee meetings. However, other individuals such as the Director General, Chief Operating Officer, the Executive Director of People & Culture and external advisers may be invited to attend for all or part of any meeting, as and when appropriate.

The Committee Chair will not be the Chair of the Board. In the absence of the Committee Chair and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting from those who would qualify under these terms of reference to be appointed to that position by the Board.

Secretary

The Commission Secretary, or their nominee, shall act as the secretary of the Committee and will ensure that the Committee receives information and papers in a timely manner to enable full and proper consideration to be given to issues.

Quorum

The quorum necessary for the transaction of business shall be two.

Frequency of meetings

The Committee shall meet at least twice a year and otherwise as required.

Notice of meetings

Meetings of the Committee shall be called by the Commission Secretary at the request of the Committee Chair or any of its members.

Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member of the Committee and any other person required to attend no later than five working days before the date of the meeting. Supporting papers shall be sent to Committee members and to other attendees, as appropriate, at the same time.

Minutes of meetings

The Commission Secretary shall minute the proceedings and decisions of all Committee meetings, including recording the names of those present and in attendance.

Draft minutes of committee meetings shall be circulated to all members of the Committee for review.

Engagement with stakeholders

Activities of the Remuneration Committee and its membership shall be reported in the JFSC’s Annual Report.

A member of the Staff Forum shall be invited to attend a Remuneration Committee meeting on an annual basis.

Duties

The Committee shall:

• Have delegated responsibility for setting remuneration for the JFSC’s Chair and Director General;
• Monitor the level and structure of remuneration for senior management (directors at Grade 9 and above) including individual performance against objectives;
• Support the Chair with the annual performance review of the Director General and make recommendations about the procedure for the performance review;
• Provide advice and counsel to the JFSC’s Executive in the production of remuneration policies and practices to support strategy and promote long-term sustainable success, with remuneration aligned to the JFSC’s purpose and values, clearly linked to the successful delivery of the JFSC’s long-term strategy, and that enable the use of discretion to override formulaic outcomes and to recover and/or withhold sums under appropriate specified circumstances.
• Consider clarity, simplicity, risk mitigation, predictability, proportionality and alignment to culture when determining remuneration policy and practices,
• Ensure that no director or manager shall be involved in any decisions as to their own remuneration outcome.
• Take into account all other factors which it deems necessary In determining remuneration policy. The objective of such policy shall be to attract, retain and motivate management of the quality required to run the company successfully without paying more than is necessary, having regard to views of other stakeholders.
• Review the ongoing appropriateness and relevance of the remuneration policy.
• Have full authority to appoint remuneration consultants and to commission or purchase any reports, surveys or information which it deems necessary at the expense of the JFSC. However, the committee should avoid designing pay structures based solely on benchmarking to the market or on the advice of remuneration consultants.
• Review workforce remuneration and related policies.
• Consider People Strategy matters, in relation to the JFSC’s strategic anchor ‘to develop our people, systems and capability to be a high performing organisation’
• Be kept informed of all negotiated staff exits under compromise (or settlement) agreements. If a proposed payment is greater than the maximum payment that could be awarded by the Jersey Employment Tribunal, the matter shall be referred to the Committee for approval.
• Work and liaise as necessary with other Board committees, ensuring the interaction between Committees and with the Board is reviewed regularly.

Reporting responsibilities

The Committee Chair shall report to the Board after each meeting on the nature and content of its discussion, recommendations and action to be taken.

The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed, and adequate time should be available for Board discussion when necessary.

The Committee shall provide a description of its work in the annual report.

If the Committee has appointed remuneration consultants, the consultant should be identified in the annual report alongside a statement about any other connection it has with the company or individual directors.

Other matters

The Committee shall:

• Have access to sufficient resources in order to carry out its duties, including access to the Commission Secretariat for advice and assistance as required.
• Be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members.
• Ensure that a periodic evaluation of the Committee’s own performance is carried out.
• At least annually, review its constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the Board for approval.

Authority

The Committee is authorised by the Board to obtain, at the JFSC’s expense, outside legal or other professional advice on any matters within its terms of reference.