1. Remuneration Committee
This report sets out the Company’s remuneration policy and practice for executive and non-executive directors and provides details of their remuneration and share interests for the year ended 31 December 2007.
1.1 Role of the Remuneration Committee and Terms of Reference
The Remuneration Committee (the Committee) is responsible for considering and making recommendations to the Board on:
- the Company’s general policy on executive and senior management remuneration;
- the specific remuneration packages for executive directors of the Company, including basic salary, performance-based short- and long-term incentives, pensions and other benefits; and
- the design and operation of the Company’s share incentive schemes.
The full Terms of Reference of the Committee can be found on the Anglo American website www.angloamerican.co.uk and copies are available on request.
The Committee met four times during 2007.
1.2 Membership of the Committee
The Committee comprised the following non-executive directors during the year ended 31 December 2007:
- Sir Rob Margetts (chairman);
- David Challen;
- Chris Fay; and
- Sir Mark Moody-Stuart.
The Company’s chief executive attends the Committee meetings by invitation and assists the Committee in its considerations, except when issues relating to her own compensation are discussed. No directors are involved in deciding their own remuneration. In 2007, the Committee was advised by Russell King and Chris Corrin (Group Human Resources) and the Company’s Finance function. It also took external advice as shown in Figure 1.
Certain overseas operations within the Group are also provided with audit and non-audit related services from PwC’s, Mercer’s and Deloitte’s worldwide member firms.
A summary of the letter from Mercer containing the conclusions of their review of the Committee’s executive remuneration processes for 2007 is set out at independent remuneration report review, while the full letter can be found on the Company’s website.
EXTERNAL ADVICE PROVIDED TO THE REMUNERATION COMMITTEE
|Advisers||Services provided to the Committee||Other services provided to the Company|
|PricewaterhouseCoopers LLP (PwC)||Appointed by the Company, with the agreement of the Committee, to provide specialist valuation services||Investment advisers, actuaries and auditors for various pension schemes; advisers on internal audit projects and the adoption of International Financial Reporting Standards; taxation, payroll and executive compensation advice|
|Linklaters LLP (Linklaters)||Appointed by the Company, with the agreement of the Committee, to provide legal advice on long-term incentives and directors’ service contracts||Legal advice on certain corporate matters|
|Mercer Limited (Mercer)||Engaged by the Committee to review the Committee’s processes on an annual basis, in order to provide shareholders with assurance that the remuneration processes the Committee has followed are in line with the stated policy as set out below and that the Committee has operated within its Terms of Reference||Investment advisers and actuaries for various pension schemes|
|Towers Perrin||Appointed by the Company, with the agreement of the Committee, to provide market remuneration data|
|Deloitte & Touche LLP (Deloitte)||In their capacity as Group auditors, Deloitte undertakes an audit of sections 10 and 11 of the remuneration report annually. However, they provide no advice to the Committee|