Directors’ Remuneration Report
Letter to Shareholders from the Chairman
of the Remuneration Committee
Dear Shareholder
This report sets out the remuneration policy for the Directors and discloses amounts due to them in respect of 2012. In response to the UK
Government’s proposed new legislation regarding the reporting of directors’ remuneration, the Remuneration Committee has adopted a number of
the proposals early. LSL is not expected to or required to report formally under the new legislation until October 2013 (such reporting to commence
with the Annual Report and Accounts 2013). This report has therefore been divided into the following two sections:
• Remuneration Policy Report: which includes a forward-looking report detailing LSL’s current remuneration policy and that proposed for 2013
together with details of the Non Executive Directors’ remuneration; and
• implementation Report: which sets out what is payable and awarded/vested during 2012, the year under review.
LSL will be seeking Shareholder support for each part of this Remuneration Report by way of a single advisory vote at the forthcoming AGM on
2nd May 2013. Please see the Notice of Meeting and accompanying notes for further information.
Summary of key decisions in the year
The Remuneration Committee continually reviews LSL’s Senior Executive Remuneration Policy to ensure that it promotes the attraction, motivation
and retention of high quality executives who are key to delivering LSL’s strategy.
The Committee’s most recent conclusions are that the existing Senior Executive Remuneration Policy remains appropriate and should continue to
operate for 2013. Specifically:
• During 2012, Executive Director basic salary positioning remained well below midmarket levels for similarly sized listed companies. The base salary
levels which were set in 2010 were reviewed at the end of 2012, and base salaries were increased by 3% with effect from 1st January 2013 in line
with an increase granted to the management population;
• The increase in David Newnes base salary from £140,000 to £175,000 is to reflect his previous salary being significantly below benchmark and also
reflects the strong performance of the Estate Agency Division in 2012 as well as the Board’s expectations for this Division in 2013;
• The structure and quantum of the annual bonus works well and should continue to be operated for 2013; and
• The long term incentive grant policy, whereby nil-cost awards are granted annually with vesting based on Adjusted Basic Earnings Per Share (70%)
and relative Total Shareholder Return (TSR) (30%) performance conditions and continued service provide a strong alignment between the senior
executive team and Shareholders. Grant levels and performance targets will continue to be reviewed in advance of each award.
In conclusion, the Remuneration Committee believes that LSL’s Senior Executive Remuneration Policy continues to incentivise the delivery of strong
yet sustainable financial results and the creation of shareholder value.
Mark Pain
Chairman of the Remuneration Committee
40 ANNUAL REPORT AND ACCOUNTS 2012