Audit Committee
The Audit Committee comprises four Non-Executive Directors, all of who are considered by the Board to be independent. At the present time, its members are Russell Walls (Chairman), Janet Morgan, Ewan Brown and Iain Duffin. Of the members of the Audit Committee, Russell Walls is a former Finance Director of a FTSE 100 company and Ewan Brown is currently the chairman of an audit committee of a FTSE 100 company. The Committee has significant recent and relevant financial expertise and is appropriately qualified to undertake its duties in an effective manner.
It receives reports from all of the Group’s major business functions including the Risk Assurance Function. It also receives reports from the external auditors. It considers the scope and results of the audit, the interim and annual accounts and the accounting and internal control systems in place throughout the Group. The Audit Committee reviews the cost effectiveness, independence and objectivity of the internal and external auditors.
View the Terms of Reference for Stagecoach Group plc Audit Committee in PDF format (67kb)
Remuneration Committee
The Remuneration Committee makes recommendations to the Board for ensuring that the Executive Directors’ remuneration is appropriate to attract, motivate and retain Executive Directors of the quality needed to run the Group’s business successfully. The constitution and operation of the Remuneration Committee complies with the principles and provisions of the Combined Code. During the year ended 30 April 2005, Iain Duffin chaired the Remuneration Committee and the other members were Russell Walls and Janet Morgan, all three of whom are independent Non-Executive Directors.
View the Terms of Reference for Stagecoach Group plc Remuneration Committee in PDF format (51kb)
Remuneration Policy
The Remuneration Policy is consistent with our prior year policy, which was approved by the shareholders at the 2004 Annual General Meeting. However, the Committee has, with the assistance of the Group’s advisers, KPMG LLP (UK), been reviewing the structure of remuneration for Executive Directors and senior management. Proposals will be submitted to shareholders at the 2005 Annual General Meeting to make changes to the various elements of remuneration in the context of the overall objectives of the Remuneration Policy. The Remuneration Committee follows Schedule A of the Combined Code in designing performance-related remuneration schemes.
In determining appropriate levels of remuneration for the Executive Directors, the Remuneration Committee aims to provide overall packages of terms and conditions that are competitive in the UK and will attract, retain and motivate high quality executives capable of achieving the Stagecoach Group’s objectives and to ensure that they are fairly rewarded for their individual responsibilities and contributions to the Group’s overall performance. The Remuneration Committee believes that such packages should contain significant performance-related elements and that these performance-related elements should be designed to align the interests of the Executive Directors and other senior managers with the interests of shareholders. Performance targets are established to achieve consistency with the interests of shareholders, with an appropriate balance between short- and long-term targets. Performance targets include traditional financial indicators and personal targets, successful investment, innovation, staff development, customer satisfaction and achievement of regulatory requirements, including health and safety and environmental targets.
To this end, the Remuneration Committee reviews the existing remuneration of the Executive Directors, in consultation with the Chief Executive, making comparisons with peer companies of similar size and complexity and with other companies in the public transport industry in the UK and overseas. Proposals for the forthcoming year are then discussed in the light of the prospects for the Group. The Remuneration Committee is also kept informed of the salary levels of other senior executives employed by the Stagecoach Group and of average earnings for all employees. With regard to pensions, the Remuneration Committee has access to reports from the trustees and scheme actuaries regarding the cost of pension obligations.
The Committee has taken advice during the financial year from a firm of independent executive remuneration consultants, Inbucon Consulting. Also, KPMG LLP (UK) provided guidance on the implementation of the proposed changes to the remuneration arrangements as described later in this report. Inbucon has no other relationship with the Group. KPMG LLP (UK) has from time to time provided other consultancy services to the Group and is the auditor of the Stagecoach Group Pension Scheme (‘‘SGPS’’).
Shareholders are invited to specifically approve all new long-term remuneration plans (whether share-settled or cash-settled plans) and any significant changes to existing plans, except where otherwise permitted by the Listing Rules.
The Remuneration Committee believes that remuneration packages should reward the efforts of all staff since a motivated workforce is a key element of Group performance. The Committee recognises that Executive Directors bear the greatest responsibility for delivering corporate strategy that underpins long-term sustainable performance. While the Remuneration Committee’s report focuses on incentive schemes for senior executives, there are also a number of performance-related bonus schemes within group companies, in addition to the UK-only SAYE scheme.
Nomination Committee
The Nomination Committee currently comprises two Non-Executive Directors – Robert Spiers, Chairman of the Company and Ewan Brown (who acts as Chairman) that the board considers to be independent and one Executive Director, Brian Souter. The Committee is responsible for evaluating the balance of skills, knowledge and experience of the Board, and where appropriate suggesting new appointments.
View the Terms of Reference for Stagecoach Group plc Nomination Committee in PDF format (68kb)
Health, Safety and Environmental Committee
The Health, Safety and Environmental Committee is chaired by an independent Non-Executive Director, Janet Morgan, and during the financial year comprised one other independent Non-Executive Director, Iain Duffin who joined the Committee in May 2004 and one Executive Director, Graham Eccles. Ann Gloag joined the Committee from June 2005. It was established to discuss health, safety and environmental issues across the Group and to report regularly to the Board on these matters. It has access to internal safety executives and also external consultants. The Committee met twice during the year and again in June 2005.
Individual director participation at meetings
The following is a table of participation in full Board meetings and meetings of committees by directors during year ended 30 April 2005:
| PARTICIPATION IN MEETINGS | Full Board meetings | Audit Committee | Remuneration Committee | Health, Safety and Environmental Committee | Nomination Committee |
| No. of meetings | 6 | 3 | 4 | 2 | 1 |
| Robert Speirs | 6 | n/a | n/a | n/a | 1 |
| Brian Souter | 6 | n/a | n/a | n/a | 1 |
| Martin Griffiths | 6 | n/a | n/a | n/a | n/a |
| Graham Eccles | 6 | n/a | n/a | 2 | n/a |
| Ewan Brown | 6 | 3 | n/a | n/a | 1 |
| Iain Duffin | 6 | 3 | 4 | 2 | n/a |
| Ann Gloag | 6 | n/a | n/a | n/a | n/a |
| Janet Morgan | 6 | 3 | 4 | 2 | n/a |
| Russell Walls | 6 | 3 | 4 | n/a | n/a |
