Directors' Remuneration Report

1. Annual Statement (unaudited)

This part of the report has been prepared in accordance with Part 3 of The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 and 9.8.8R of the Listing Rules.

This year has been a busy year for the Remuneration Committee with the implementation of new legislation and a review of the Company's Executive Remuneration Policy.

The Directors' Remuneration Report has been divided into the following three sections:

  1. This Annual Statement: summarising and explaining the major decisions and any changes in respect of Directors' Remuneration Policy;
  2. Directors' Remuneration Policy: which sets out the basis of remuneration for the Group's directors which will become effective following approval at the AGM to be held on 19 September 2014; and
  3. Annual Report on Remuneration: which sets out the remuneration earned by the Group's directors in the year ended 26 April 2014 and explains how the remuneration policy set out in the previous section will be implemented.

The Directors' Remuneration Policy will be subject to a binding shareholder vote and Annual Statement and the Annual Report on Remuneration will be subject to an advisory shareholder vote at the forthcoming AGM on 19 September 2014. In the future, the Directors' Remuneration Policy will be subject to a binding vote every three years (sooner if changes are made to the policy) and the Annual Statement and Annual Report on Remuneration will be subject to an annual advisory vote.

Performance and reward

As a result of this year's Group performance, all executive directors (with the exception of Julian Dunkerton and James Holder who have waived their respective awards) will receive annual bonus payments of 90% of salary out of a maximum of 100% of salary for the year ended 26 April 2014. No long-term incentive awards held by executive directors are due to vest in 2014 in respect of performance periods which ended in the year to 26 April 2014 (the first vesting date for awards held by executive directors is not until 2015).

Summary of key decisions in the year

The Remuneration Committee has continued to review the Directors' Remuneration Policy to ensure it promotes the attraction, motivation and retention of the executives required to successfully drive the strategy of SuperGroup.

The Company continues to experience fast paced growth and is relatively young having only become public in 2010. This has led to a need, over the last few years, to attract and retain executives capable of building sound infrastructure whilst simultaneously driving and managing the pace of growth; as well as protecting the entrepreneurial, innovative culture which has underpinned its success. The approach to remuneration has therefore needed to develop to ensure that SuperGroup attracts and retains the most talented executives in what is a highly competitive marketplace.

The Remuneration Committee is confident that the Directors' Remuneration Policy that has been proposed should incentivise the delivery of strong and sustainable financial results and create shareholder value.

Approved and signed on behalf of the Board.

Keith EdelmanRemuneration Committee Chairman 9 July 2014

2. Directors' Remuneration Policy (unaudited)

In formulating the remuneration policy, full consideration has been given to the principles set out in the Code. The Remuneration Committee regularly reviews the policy to ensure it takes account of best practice and serves the needs of SuperGroup. As part of the regular review, the Remuneration Committee encourages dialogue with major shareholders and considers their feedback, alongside guidance from the major shareholder representative bodies. Details of votes cast for and against the resolution to approve last year's remuneration report and any matters discussed with shareholders during the year are set out in the Annual Report on Remuneration.

This section sets out the Directors' Remuneration Policy which will be put forward for shareholder approval and become effective at the AGM on 19 September 2014 in accordance with section 439A of the Companies Act 2006.

Policy overview

The Company aims to provide a remuneration structure and approach that enables the attraction, retention and motivation of high calibre people with the capability to drive continued growth of the business and which is aligned to shareholder interests.

Where the Remuneration Committee has discretion in implementing the remuneration policy, that discretion will be exercised diligently and in a manner aligned with shareholder interests. Discretion will only be exercised within the boundaries and limits set out in the Directors' Remuneration Policy.

The Remuneration Committee will not seek to make changes to any element of executive director remuneration to compensate participants for changes in their personal tax status.

Summary of the Executive Director Remuneration Policy

Element

Base Salary

Purpose and link to strategy

Set at levels to attract and retain talented executive directors of the high calibre required to develop and deliver the growth strategy. Base salary will reflect the individual skill, experience and role of the executive within the Group whilst reflecting that paid to executives of comparable companies.

Operation

When determining base salary the Committee typically takes into account:

  • business and individual performance;
  • salary levels at companies of a similar size, industry, global scope and complexity; and
  • the salaries paid to other employees across the Group.

Base salary is normally paid on a monthly basis in cash. The base salary for each executive director is normally reviewed annually in May by the Remuneration Committee although an out of cycle review may be conducted if the Remuneration Committee determines it appropriate. A salary review will not necessarily lead to an increase in salary.

Maximum opportunity

There is no prescribed maximum base salary level or maximum annual increase.

Salary increases will typically be in line with the general level of increase awarded to other employees in the Group and/or the director's country of employment.


In exceptional circumstances (e.g. where there is an increase in scale, scope and/or responsibility, to reflect the development and success of the individual within the role, and/or to take account of relevant levels/market movements) a higher increase may be awarded.


Current salaries are detailed in the Annual Report on Remuneration.

Performance measures

Individual and business performance is taken into consideration when deciding salary levels.

ElementRetirement Benefits
Purpose and link to strategy

To provide retirement benefits which are market competitive and to enable the Group to attract and retain executive directors of the right calibre.

Operation

Executive directors can choose to participate in the Group personal pension plan relevant to the country where they are employed, or to receive a cash allowance, or a combination of the two. The Group personal pension plan is a defined contribution plan.

Maximum opportunity

The maximum Company contribution to an executive director's pension (or equivalent cash allowance) may not exceed 15% of base salary.

ElementOther Benefits
Purpose and link to strategy

To ensure a competitiveness with broader market practice.


To support personal health and well-being.

Operation

Benefit provision is set at an appropriate market level taking into account the executive director's home jurisdiction, the jurisdiction where they are based, market practices at similar companies and the level/type of benefits provided elsewhere in the Group.


The benefits to which executive directors are entitled include (but are not limited to) a bi-annual health assessment, private medical insurance (for the individual and their family), company sick pay, holiday pay, life assurance, car allowance and staff discount on SuperGroup products. Other benefits may be provided where appropriate.


In country and global relocation support may also be provided where appropriate.


Executive directors are eligible to participate, on the same basis as other employees, in the Company's sharesave scheme and will be entitled to participate in any other all-employee share plan operated in the future.

Maximum opportunity

There is no maximum level of benefits provided to an individual executive director.


Participation by executive directors in the sharesave scheme, and any other all-employee share plan operated in the future, is limited to the maximum award levels permitted by HM Revenue and Customs.

ElementAnnual Performance Bonus
Purpose and link to strategy

To encourage and reward the achievement of challenging financial and strategic performance targets during a financial year. The performance measures set each year align to the strategy of the business and shareholder value creation.

Operation

Bonus payments are normally awarded in cash and are not pensionable. An individual executive director may choose to defer bonus awarded into the Group personal pension plan.


The Remuneration Committee may defer part of an executive director's annual bonus into SuperGroup shares for a specified period of time.

Maximum opportunity

Up to 150% of base salary.

Performance measures

Performance is normally assessed over one financial year.


The annual performance bonus may be based on a mix of financial, personal and/or strategic business objectives relevant to the particular performance year and is aimed at securing a sustainable long-term business model.


The performance criteria and performance targets are determined by the Remuneration Committee each year and include threshold levels for minimum award (below which no bonus will be awarded), on-target award and maximum award.


The Remuneration Committee will set demanding performance targets to encourage stretch performance. These targets are considered to be commercially confidential and will therefore be disclosed in due course after the performance period has ended.


A straight-line sliding scale between threshold (0% of opportunity), target (50% of opportunity) and maximum (100% of opportunity) is used to determine the level of award.


Malus and clawback provisions apply.

ElementPerformance Share Plan ("PSP")
Purpose and link to strategy

To incentivise and reward executive directors to develop and deliver strategic plans that create long-term value through the setting of strategic targets; and to ensure a strong link between reward, underlying Group financial performance and total shareholder returns.


To support recruitment, long-term retention and collaborative working through share ownership.

Operation

Awards are granted on a discretionary basis and normally vest subject to performance and continued employment at the end of a three year performance and vesting period. Awards may be structured as conditional awards or nil or nominal cost options.


Executive directors may benefit, in the form of cash or shares, from the value of any dividend paid over the vesting period to the extent that awards vest.

Maximum opportunity

Maximum award limit: 200% of salary.


Exceptional circumstances* award limit: 300% of salary (*for recruitment or retention).

Performance measures

Normally based on a three year performance period.


Performance measures will be based on financial metrics – (e.g. Earnings Per Share ("EPS")) and/or relative total shareholder return ("TSR").


25% of an award vests for threshold performance increasing to 100% vesting for maximum performance.


Malus and clawback provisions will apply.

ElementShare Ownership Guidelines
Purpose and link to strategy

To increase alignment between management and shareholders.

Operation

Executive directors not holding shares worth at least 100% of their base salary will be expected to retain 50% of any PSP awards which vest (net of tax) granted until such time as this level of holding is met.

Maximum opportunity

Minimum of 100% of base salary.

Financial performance measures (e.g. EPS) and TSR are used for the PSP's performance criteria. The Group's Key Performance Indicators, as set out in the Strategic Report, contribute to the delivery of profit before tax, EPS and TSR. The combination of EPS and TSR performance conditions for the PSP provides a balance between rewarding management for growth in sustainable profitability and stock market outperformance. TSR is a clear indicator of the relative success of the Group in delivering shareholder value and, as a performance measure, firmly aligns the interests of directors and shareholders. The EPS target range will require significant levels of growth and the TSR condition will be based on relative outperformance of selected listed companies. Performance against the TSR and EPS targets will be independently calculated and reviewed by the Remuneration Committee.

In approving this Directors' Remuneration Policy, authority is given to the Company to honour any commitments entered into with current or former directors. Details of any payments to former directors will be set out in the Annual Report on Remuneration as they arise.

Remuneration arrangements across the Group

The reward philosophy is consistent across the Group, namely that reward should support the business strategy and be sufficient to attract and retain high performing individuals. Within this framework, there are differences for a range of objective reasons, including global location, culture, best practice, employment regulation and the local talent market.

  • Salaries and benefits – a range of factors are considered including business performance, individual capability and performance, the pay of other employees and external market data.
  • Annual Performance Bonus – consistent with the policy for executive directors, annual bonuses that are in place across the Group are typically linked to business performance with a focus on underlying Group profit, although the Company retains the right to void a bonus award in circumstances where it deems an individual has not performed to an acceptable level or has acted inappropriately during the performance period.
  • PSP – a small number of the management team who provide significant strategic input or lead a significant function within the Company, and more junior employees who have made an exceptional contribution, may be invited to participate in the PSP in any year.
  • Sharesave scheme – in the UK the Company operates a sharesave scheme which is open to all eligible employees. Employees can elect to save up to £500 each month for a fixed period of three years. At the end of the savings period, individuals may use their savings to buy ordinary shares in the Group at a discount capped at up to 20% of the market price set at the launch of each scheme.
  • Retirement benefits – in line with local country practices, the Company encourages all employees to contribute appropriate savings toward their retirement. In the UK, the Company operates pension arrangements within the Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010.

Executive directors' service agreements

The following table sets out a description of any obligations on the Company, contained in the executive directors' service contracts, which could give rise to, or impact, remuneration payments or payments for loss of office.

ElementTerms
Notice period

A maximum of 12 months by the Company and 12 months by the executive director.

Contract date

Julian Dunkerton – 12 March 2010
Susanne Given – 19 March 2012
James Holder – 12 March 2010
Hans Schmitt – 17 June 2013
Shaun Wills – 19 March 2012

Expiry date

No fixed expiry date.

Base salary

Contractual entitlement to receive a base salary and for a salary review to take place each year. The Company is not obliged to increase an executive director's salary following a review.

Pension contributions

Employer pension contribution.

Contractual benefits

Contractual entitlement to:


  • private medical insurance;
  • company sick pay;
  • life assurance;
  • holiday pay;
  • car allowance; and
  • discount on SuperGroup products.
Annual bonus

Contractual entitlement to participate in the annual performance bonus scheme, subject to the Company's policy in relation to such a scheme and to the approval of the Committee.

Long-term incentive plan
(PSP)

Contractual entitlement to be considered for participation in the PSP, subject to the Company's policy in relation to such a scheme and to the approval of the Remuneration Committee.

The service contract for a new executive director will not include any provision that is more generous than those listed above.

All executive director service contracts and letters of appointment are available for inspection at the Company's registered office during normal hours of business and will also be available at the Company's AGM to be held on 19 September 2014.

With the consent of the Board, where an appointment can enhance an individual executive director's experience and add value to the Company, executive directors are able to accept non-executive appointments outside the Company. Retention of any fees received by the executive director is at the discretion of the Remuneration Committee.

On 6 March 2014, Shaun Wills was appointed as a non-executive director of Anatwine Limited, a company in which SuperGroup Plc holds a 35% investment. No remuneration is currently paid in connection with this role.

Discretions retained by the Committee

The Remuneration Committee will operate the annual bonus plan and PSP according to their respective rules (or relevant documents) and in accordance with the Listing Rules where relevant. The Remuneration Committee retains certain discretions, consistent with market practice, with regard to the operation and administration of these plans. These include, but are not limited to, the following in relation to the PSP: the participants; the timing of grant of an award; the size of an award; the determination of vesting; discretion required if dealing with a change of control or restructuring of the Group; determination of the treatment of leavers; adjustments required in certain circumstances (e.g. rights issues, corporate restructuring events and special dividends); reviewing performance measures and weighting; and targets for the PSP from year to year.

In relation to the annual bonus plan, the Committee retains discretion over: the participants; the timing of grant of a payment; the determination of the bonus payment; dealing with a change of control; determination of the treatment of leavers based on the rules of the plan and the appropriate treatment chosen; the annual review of performance measures and weighting; and targets for the annual bonus plan from year to year.

In relation to both the Company's PSP and annual bonus plan, the Remuneration Committee retains the ability to adjust the targets and/or set different measures if events occur (e.g. material acquisition and/or divestment of a Group business) which cause it to determine that the conditions are no longer appropriate and the adjustment is required so that the conditions achieve their original purpose and are not materially less difficult to satisfy. We have used EPS as a determining measure since inception for the PSP; it is therefore consistent and transparent to participants and shareholders. The Remuneration Committee will exercise discretion if required to adjust EPS to reflect what it considers to be a fairer outcome for shareholders and executive directors. In both the current and prior year, the Remuneration Committee has excluded re-measurements and exceptional items from both the PSP and the annual bonus plan. Any use of the above discretions would, where relevant, be explained in the Annual Report on Remuneration and may, as appropriate, be the subject of consultation with the Company's major shareholders.

The operation of the Company's sharesave scheme will be as permitted under HM Revenue and Customs' rules and the Listing Rules. Details of share awards held by executive directors at the end of the financial year are set out under Directors' interests in shares (audited). These remain eligible to vest based on their original award terms.

Illustrations of application of the Directors' Remuneration Policy

The Group's remuneration arrangements have been designed so that a substantial proportion of reward is dependent on the achievement of stretching short and long-term performance targets. The charts below show the value of the current executive directors' packages under three reward scenarios (minimum, on-target and maximum).

Supergroup Scenario Charts 1

The chart above is based on the following assumptions:

  • Base salary as at 1 May 2014.
  • Estimated value of benefits.
  • On-target bonus taken to be 50% of the maximum potential (100% of salary).
  • On-target PSP award (excluding the Chief Executive Officer and Brand Design Director who, although eligible to participate in the PSP, do not currently receive annual awards) is taken to be 50% of the maximum potential (100% of salary).
  • Consistent with the disclosure requirements, no share price appreciation has been assumed.

Approach to the recruitment and retention of executive directors

Principles

When hiring a new executive director or promoting to the Board from within the Group, the Remuneration Committee will offer a package that is sufficient to attract, retain and motivate the right talent, whilst at all times aiming to pay no more than is necessary. In determining an appropriate remuneration package, the Remuneration Committee will take into consideration all relevant factors including but not limited to the impact on other existing remuneration arrangements, the candidate's location and experience, external market influences and internal pay relativities.

The remuneration package for a new executive director would be set in accordance with the terms of the Company's prevailing approved remuneration policy at the time of appointment and take into account the skills and experience of the individual, the market rate for a candidate of that experience and the importance of securing the relevant individual.

Salary would be provided at such a level as required to attract the most appropriate candidate and may be set initially at a below mid-market level on the basis that it may progress towards the mid-market level once expertise and performance has been proven and sustained. The annual bonus potential would be limited to 150% of salary and grants under the PSP would be limited to 200% of salary (300% of salary in exceptional circumstances).

In addition, the Remuneration Committee may offer additional cash and/or share-based elements to replace deferred or incentive pay forfeited by an executive director leaving a previous employer. It would seek to ensure, where possible, that these awards would be consistent with awards forfeited in terms of vesting periods, expected value and performance conditions.

For an internal executive director appointment, any variable pay element awarded in respect of the prior role may be allowed to pay out according to its terms. In addition, any other ongoing remuneration obligations existing prior to appointment may continue.

For external and internal appointments, the Remuneration Committee may agree that the Company will meet certain relocation and/or incidental expenses as appropriate.

Policy on payment for loss of office

The Company is committed to ensuring a consistent approach so that it does not pay more than is necessary in circumstances leading to loss of office. In the event of an early termination of a contract, the policy is to seek to minimise any liability. When managing such situations the Remuneration Committee takes a range of factors into account including contractual obligations, shareholder interests, organisational stability and the need to ensure an effective handover. Executive directors may be entitled to a payment in lieu of notice ("PILON") if notice is served by the Company. In the normal course of events, the executive director would work their notice period. In the event of termination for cause (e.g. gross misconduct or negligence) neither notice nor PILON would be given and the executive director would cease to perform services immediately.

In the event of termination for reasons other than cause (for example resignation) where the individual is requested by the Company to cease working before the end of the notice period, PILON may be payable. If a portion of the notice period is served, the PILON payment will be reduced on a pro-rata basis. Payments may be made on a phased basis. Alternatively, rather than making a PILON, the Company may place an executive director on garden leave for the duration of some or all of their notice period.

Where an executive director leaves during a financial year, the annual bonus may be payable with respect to the period of the financial year worked although it will be pro-rated for time and paid at the normal payment date.

Any share-based entitlements granted to an executive director under the Company's share plans will be determined based on the relevant plan rules.  The default treatment under the PSP is that any outstanding awards lapse on cessation of employment.  However, in certain prescribed circumstances, such as death, ill-health, injury, disability, retirement, sale of the employing company or business outside the Group or any other circumstances at the discretion of the Remuneration Committee, 'good leaver' status may be applied.  For good leavers, awards will normally vest on their normal vesting date, subject to the satisfaction of the relevant performance conditions at that time and will be reduced pro-rata to reflect the proportion of the performance period actually served.  However, in the event of the death of an executive director, the Remuneration Committee has discretion to determine that awards vest at cessation, subject to performance targets, with no service pro-rata reduction.

Payment may also be made in respect of accrued benefits, including untaken holiday entitlement.

In addition, as is consistent with market practice, the Company may pay a contribution towards an executive director's legal fees for entering into a statutory agreement and may pay a contribution towards fees for outplacement services as part of a negotiated settlement.

There is no provision for additional compensation on termination following a change of control, nor liquidated damages of any kind.

Consideration of conditions elsewhere in the Company

The Remuneration Committee has oversight of the main compensation structures throughout the Group and actively considers the relationship between general changes to employee remuneration and executive director reward. When considering changes to executive director remuneration, the Remuneration Committee is provided with comparative employee information (for example average salary review) across the Group.

The Remuneration Committee does not consider it appropriate to consult directly with employees when formulating executive director reward policy. However, it does take into account information provided by the Director of HR.

Consideration of shareholder views

The members of the Remuneration Committee are always available to discuss any issues or concerns with shareholders.

Summary of the Non-Executive Director Remuneration Policy

The Board aims to recruit high calibre non-executive directors with broad commercial, international or other relevant experience. The remuneration policy is as follows:

ElementBase Salary
Purpose and link to strategy

Fees are set at an appropriate level to attract and retain high calibre non-executive directors. Reflects time commitment and responsibilities of each role and fees paid in other companies of a similar size, industry, global scope and complexity.

Operation

Fees are normally reviewed annually.


Fees are normally paid in cash.


Each non-executive director is paid a basic fee for undertaking non-executive director and Board duties. A higher fee is typically paid to the Chairman of the Board and the Senior Independent Director. Additional fees may also be payable for taking on Committee responsibilities and other Board duties.


Non-executive directors also receive staff discount on SuperGroup products.

Maximum opportunity

As is the case for the executive directors, there is no prescribed maximum fee or maximum fee increase.

Performance measures

Individual and business performance is taken into consideration when deciding fee levels.

When recruiting a new non-executive director, the remuneration arrangements offered will be consistent with the policy presented above.

Non-executive directors are appointed for an initial period of three years. This period may be renewed. Appointments may be terminated by either the Company or the non-executive director giving three months' notice or in the case of the Chairman, 12 months' written notice. Save in respect of retirement by rotation, a non-executive director being removed from office will be entitled to compensation equal to the fee during any remaining notice period.

NameDate of appointment or re-appointmentExpected date of expiry of current term
Peter Bamford29 January 201328 January 2016
Keith Edelman29 January 201328 January 2016
Ken McCall29 January 201328 January 2016
Minnow Powell1 December 201230 November 2015
Euan Sutherland1 December 201230 November 2015

All non-executive director service contracts and letters of appointment are available for inspection at the Company's registered office during normal hours of business and will also be available at the Company's AGM to be held on 19 September 2014.

3. Annual Report on Remuneration

The following part of the Directors' Remuneration Report, together with the Annual Statement, will be subject to an advisory vote at the AGM to be held on 19 September 2014 and sets out how the Directors' Remuneration Policy will be implemented in 2015, and how it was implemented in 2014. This part of the report has been prepared in accordance with Part 3 of The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 and 9.8.8R of the Listing Rules.

The following sections of the Annual Report and Accounts are identified as audited or unaudited as appropriate.

Implementation of the Remuneration Policy for 2015

Base salary (audited)

Executive directors' base salaries are normally reviewed annually, taking into account business and individual performance, salary levels at companies of a similar size, industry, global scope and complexity and the salaries paid to other employees across the Group.

Current base salary levels are as follows:

From 27 April 20141From 29 April 20131
Julian DunkertonChief Executive Officer£400,000£400,000
Susanne GivenChief Operating Officer£350,000£350,000
James HolderBrand and Design Director£300,000£300,000
Hans Schmitt2MD Wholesale & International£330,000
Shaun WillsChief Financial Officer£330,0003 £250,000
  1. On appointment if later.
  2. Hans Schmitt was appointed to the Board on 1 May 2014.
  3. Shaun Wills' base salary was set at below market levels on his appointment in 2012. Following a review of his role and responsibility levels and considering his performance in the role after a period of circa two years, the Committee increased his salary from £250,000 to what it considers to be the market level (£330,000) with effect from 1 May 2014.

Benefits in kind and pension (audited)

Benefits will continue to include a bi-annual health assessment, private medical insurance (for the individual and their family), sick pay, holiday pay, life assurance, car allowance and staff discount on SuperGroup products. Other benefits may be provided where appropriate.

The Group will continue to contribute 7.5% of salary into the Group personal pension plan for the Chief Operating Officer, Chief Financial Officer and MD Wholesale & International, subject to the relevant individual contributing 5% of base salary.

Annual bonus (audited)

The Company will continue to operate an annual bonus plan for FY15 based on the achievement of challenging financial metrics and personal/strategic objectives. Specific targets will not be disclosed in advance as they are commercially confidential, but will be disclosed in due course. The maximum bonus opportunity for the current executive directors will be 100% of base salary for FY15.

Long-term incentives (audited)

The SuperGroup PSP enables the Company to incentivise and reward participants appropriately for contributing to the delivery of the Company's strategic objectives and to provide an appropriate level of long-term performance related pay.

For FY15, the normal grant policy for the current executive directors (excluding Julian Dunkerton and James Holder) will be 100% of salary. Although Julian Dunkerton and James Holder are eligible to participate in the PSP, the Committee believes that their significant shareholdings in the Company are sufficient to incentivise them and align interests with longer term Company performance at the current time.

Consistent with the FY14 awards, performance for FY15 awards will be 70% based on sliding scale EPS and 30% based on TSR relative to a selected group of retailers as measured over the three year period ending the 2017 financial year end:

  • 25% of the EPS related component of the award will vest for average annual EPS growth of 9.5% p.a. in excess of the Retail Price Index ('RPI'), increasing on a straight-line basis to 100% vesting for EPS growth of at least 14.5% p.a. in excess of RPI; and
  • 25% of the TSR related component of the award will vest if the Company's TSR is ranked at the median of a comparator group increasing on a straight-line basis to 100% vesting at the upper quartile of the group. The comparator group for the FY15 awards will comprise the companies listed in the following FTSE AllShare subsectors: Apparel Retailers, Broadline Retailers, Clothing and Accessories, Furnishings, Home Improvement Retailers, Recreational Products & Services, Restaurants & Bars, Speciality Retailers and Toys at the start of the TSR performance period.

In addition to the TSR performance condition, the Remuneration Committee must also be satisfied that there has been an improvement in the Company's underlying financial performance.

Non-executive directors (audited)

Fee levels for FY15 are as follows:

NameBase
Fee
Audit/
Remuneration Committee Chairmanship
Senior Independent DirectorFrom
27 April
2014
Financial
Year
2014
Peter Bamford£165,000£165,000£165,000
Keith Edelman£50,000£10,000£10,000£70,000£70,000
Minnow Powell£50,000£10,000£60,000£60,000
Ken McCall£50,000£50,000£50,000
Euan Sutherland£50,000£50,000£50,000

Directors' remuneration (audited)

The detailed emoluments received by the directors for the year ended 26 April 2014 are detailed below:

DirectorBase
salary/
fees
Benefits1 Pension
contributions2
Annual bonusLong-term incentivesOther paymentsTotal
Executive Directors
Julian Dunkerton2014£400,000£19,412£419,412
2013£400,000£19,406£419,406
Susanne Given2014£350,000£23,063£26,250£315,00006£714,313
2013£350,000£47,635£26,250£350,000£773,885
James Holder2014£300,000£15,766£315,766
2013£300,000£15,629£315,629
Shaun Wills2014£250,000£15,766£18,750£225,00006£509,516
2013£250,000£76,166£17,188£75,000£418,354
Non-Executive Directors
Peter Bamford2014£165,000£165,000
2013£150,000£150,000
Keith Edelman2014£70,000£70,000
2013£62,500£62,500
Ken McCall2014£50,000£50,000
2013£50,000£50,000
Minnow Powell2014£60,000£60,000
2013£23,958£23,958
Euan Sutherland2014£50,000£50,000
2013£20,833£20,833
Former Directors
Theo Karpathios32014
2013£85,386£5,504£334,616£425,506
Steven Glew42014
2013£44,802£44,802
Indira Thambiah52014
2013£37,917£37,917
  1. Benefits for 2014 comprised a car allowance and medical insurance for all the executive directors and an accommodation allowance for the COO.
  2. The COO and CFO are eligible to participate in the Company's Group personal pension plan under which the executive director contributes 5% of base salary and the Company contributes 7.5% of base salary.
  3. Theo Karpathios stepped down from the Board on 14 August 2012. Details of payments made were disclosed in last year's Directors' Remuneration Report.
  4. Steven Glew resigned as a director on 4 February 2013.
  5. Indira Thambiah resigned as a director on 11 February 2013.
  6. There are no long-term incentive awards which vested or will vest in respect of a performance period ending in the year under review.

Additional information in respect of the remuneration table

Annual bonus

For FY14 the maximum annual bonus opportunity for executive directors was 100% of salary. The actual bonus payment represented 90% of the maximum opportunity and was determined by performance targets which are not disclosed as they are considered to be commercially confidential, but they are considered by the Remuneration Committee to be demanding. These targets will be disclosed in due course.

Performance share plan

No awards vested under the PSP in the year or will vest in respect of a performance period ending in the year under review, for executive directors.

Payments for loss of office (audited)

No director left office in the year and accordingly no compensation for loss of office was paid.

Payments to past directors (audited)

No payments were made to past directors during the year.

Post year end Board appointment (audited)

Hans Schmitt, Managing Director, Wholesale & International, was appointed to the Board of SuperGroup with effect from 1 May 2014. The main elements of his package, which will be consistent with the remuneration policy set out in the Directors' Remuneration Policy Report, are as follows:

  • Salary: £330,000 p.a.;
  • Pension: 7.5% of salary p.a. (subject to the individual contributing 5% of salary);
  • Annual bonus: 100% of salary p.a. maximum; and
  • PSP awards: 100% of salary p.a.

Scheme interests awarded during the year (audited)

PSP awards granted in the year

On 15 August 2013 the Chief Operating Officer and Chief Financial Officer received awards under the PSP. These awards were in line with the policy set out in the Policy Report and details of these awards are set out below.

ExecutiveNumber of
PSP awards1
BasisFace value2Performance conditionPerformance period
Susanne Given31,278100% of base salary£350,000Vesting will be determined by
EPS and TSR over the performance
period
Three financial
years ending
2015/16
Shaun Wills22,341100% of base salary£250,000
  1. PSP awards are structured as nil-cost options.
  2. Based on a share price of £11.19 which was the 10 day weighted average share price.

The performance condition for these awards is set out below:

Performance condition% of award subject to conditionTargets% of PSP award which will vest
Average annual earnings per share (EPS) growth in excess of the
Retail Prices
Index (RPI)
70%Average annual EPS growth of
12% in excess of RPI
25%
Average annual EPS growth of
18% in excess of RPI
100%
Between 12% and 18% average annual EPS growth in excess of RPIStraight-line between 25% and 100%
Total Shareholder Return (TSR) against comparator group of companies130%Median25%
Upper quartile100%
Between median and upper quartileStraight-line between 25% and 100%
  1. The Committee retains the ability to adjust the EPS condition if events occur (e.g. material acquisition and/or divestment of a Group business) which cause it to determine that the condition is no longer appropriate and amendment is required so that the condition achieves its original purpose and is not materially less difficult to satisfy.
  2. TSR comparator group: those companies listed in the following FTSE AllShare subsectors: Apparel Retailers, Broadline Retailers, Clothing and Accessories, Furnishings, Home Improvement Retailers, Recreational Products & Services, Restaurants & Bars, Speciality Retailers and Toys.

Directors' interests under the sharesave scheme

The Company operates an HM Revenue and Customs approved save as you earn (SAYE) scheme. All eligible employees, including the executive directors, may be invited to participate on similar terms for a fixed period of three years. During the previous year the following executive directors opted to participate in the scheme.

ExecutiveNumber of optionsBasisFace value1Exercise pricePerformance conditionVesting date
Shaun Wills1,734£250 per month contribution over a 3 year period£11,227.651N/A awards vest subject to continued employment01/12/2015
  1. The share price used to determine the face value is based on the mid-market value on the day prior to when the option price was set.

Directors' interests in shares (audited)

The tables below set out details of the executive directors' outstanding share awards (which will vest in future years subject to performance and/or continued service).

ExecutiveSchemeAt
28 April 2013
Granted during
the year
Exercised during
the
period
At
26 April 2014
Date of
award
Perform-
ance
period
Normal vesting date/ exercise periodShare price
on date
of grant
£
Exercise
price
£
Share price on date of exercise
Susanne GivenPSP241,615241,61516/08/123 financial years
ending 2014/15
16/08/15£4.44
PSP31,27831,27815/08/133 financial years
ending 2015/16
15/08/16£11.35
TOTAL:241,61531,278272,893
Shaun WillsPSP115,054115,05416/08/123 financial years
ending 2014/15
16/08/15£4.44
PSP22,34122,34115/08/133 financial years
ending 2015/16
15/08/16£11.35
SAYE1,7341,73423/10/123 years01/12/15£6.54£5.19
TOTAL:116,78822,341139,129

All awards granted under the PSP are subject to continued employment and the satisfaction of the performance conditions set out above. The PSP awards are all structured as conditional awards.

In addition to the above, Hans Schmitt (appointed to the Board on 1 May 2014) currently holds PSP awards over 54,813 shares (vesting in 2016) and a restricted share award (structured as a nil cost option) over 10,742 shares, the latter of which was granted in order to retain and incentivise him as a key below Board employee at a time thought to be critical to the Group's future growth and strategy.

Share ownership

The beneficial and non-beneficial interests of the directors in the share capital of SuperGroup at 26 April 2014 are set out below:

DirectorInterests in ordinary sharesShareholding guideline achievedInterests in sharesTotal
28 April 201326 April 2014PSPSAYE
Executive Director
Julian Dunkerton26,088,94426,088,944Yes26,088,944
Susanne GivenNilNo272,838272,838
James Holder11,850,0039,850,003Yes9,850,003
Shaun Wills1,2541,254No137,3951,734139,129
Non-Executive Director
Peter Bamford6,0006,0006,000
Keith Edelman4,0004,0004,000
Ken McCall5,0005,0005,000
Minnow Powell1,4961,4961,496
Euan Sutherland1,4961,4961,496

The following sections of the Annual Report and Accounts are unaudited.

Relative importance of the spend on pay (unaudited)

The following table sets out the percentage change in distributions to shareholders and employee remuneration costs.

2014
£m
2013
£m
change
Employee remuneration costs (£m)60.148.124%
Dividends (£m)nilnilnil

Percentage increase in the remuneration of the Chief Executive Officer (unaudited)

The table below shows the movement in salary, benefits and annual bonus for the Chief Executive Officer between the current and previous financial year compared to the average of all employees of the Group.

Element of remuneration% change
SalaryChief Executive Officernil
Employees1.12%
Taxable benefitsChief Executive Officernil
Employeesnil
Annual bonusChief Executive Officernil
Employeesn/a*

* Bonus payments are only made to a small group of senior leaders and wholesale sales roles.

Performance graph (unaudited)

The graph below shows the total cumulative shareholder return (TSR) for the Group compared with the TSR of the FTSE 250 (excluding Investment Trusts) over the period from the initial public offer to 26 April 2014. The FTSE 250 (excluding Investment Trusts) was selected as this is the index of which the Group was a constituent for the period shown. The table beneath the chart sets out the Chief Executive Officer single figure over the past five years.

Supergroup TSR 2014

Single figure table (unaudited)

Year endingChief ExecutiveTotal remunerationAnnual bonus
(% of max)
Long-term incentives
(% of max)
2014Julian Dunkerton£419,412nilnil
2013Julian Dunkerton£419,463
2012Julian Dunkerton£419,463
2011Julian Dunkerton£418,745
2010Julian Dunkerton£59,8841
  1. For six week period to 2 May 2010.

Julian Dunkerton joined the annual bonus plan in FY13 but waived his award in FY14.

Membership and attendance

During the year ended 26 April 2014, the Remuneration Committee consisted of the following non-executive directors:

Keith Edelman
Euan Sutherland
Minnow Powell

Executive directors attend Remuneration Committee meetings by invitation of the Committee, except where their own remuneration is being discussed. Julian Dunkerton (Chief Executive Officer), Shaun Wills (Chief Financial Officer), Lindsay Beardsell (Group General Counsel) and Andrea Cartwright (Director of HR) attended Remuneration Committee meetings during the Period under review and provided advice to assist the Committee.

Adviser to the Committee

During 2014 the Remuneration Committee received advice from New Bridge Street ('NBS') (a trading name of AON plc) on senior executive remuneration and employee share schemes. Neither NBS nor AON plc provided other services to the Company during the Period. NBS is a member of the Remuneration Consultants Group and complies with its code of conduct. The Remuneration Committee is comfortable that NBS's advice remains objective and independent. For the year under review NBS's total fees charged were £39,943.

Dilution

In accordance with shareholder guidelines, the Remuneration Committee applies a limit on the amount of shares which can be issued to satisfy employee share plan awards of 10% of the Company's issued share capital in any rolling ten year period. Of this 10%, only half can be issued to satisfy awards under the discretionary arrangements (i.e. the PSP).

Statement of shareholder voting

At last year's AGM the Directors' Remuneration Report received the following votes from shareholders:

ForAgainstVotes castVotes withheld
Total number of votes57,421,5906,833,31564,254,90535,320
% of votes cast89.4%10.6%100%

Approved and signed on behalf of the Board.

Keith EdelmanRemuneration Committee Chairman 9 July 2014