In order to comply with schedule C of the UK Combined Code on Corporate Governance, Diageo must make the following information available:
- Summary of Non-Executive Directors' terms and conditions of appointment
- Terms of reference of the Audit, Nomination and Remuneration Committees
- Statement on independent remuneration consultants' connections with Diageo
Summary of Non-Executive Directors' terms and conditions of appointment
||Commencement date of initial letter of appointment||Expiration of current letter of appointment|
|PB Bruzelius||April 2009||AGM 2018|
|Lord Davies||September 2010||AGM 2019|
|Ho KwonPing||October 2012||AGM 2018|
|Susan Kilsby||April 2018||AGM 2018|
|BD Holden||September 2009||AGM 2018|
|NS Mendelsohn||September 2014||AGM 2020|
|AJH Stewart||September 2014||AGM 2020|
Summary of terms
Appointments are for an initial period of three years and are terminable by the company or the director without notice or compensation. The appointments are renewable by mutual agreement. Going forward, the term of the Letters of Appointment will be set so as to match the period for which directors are elected by shareholders.
There are no other service agreements or material contracts, existing or proposed, between the company and the directors. There are no arrangements or understandings between any director or executive officer and any other person pursuant to which any director or executive officer was selected to serve. There are no family relationships between the directors.
Further information on directors' share interests can be found in the Directors' Remuneration Report for the financial year ended 30 June 2016.
Statement on independent remuneration consultants' connections with Diageo plc
During the year ended 30 June 2016, the Remuneration Committee received independent advice from Kepler Associates (a brand of Mercer) – appointed by the committee in December 2013 following a tendering process – on remuneration best practice and senior executive remuneration.
Kepler Associates is a signatory to, and abides by, the Remuneration Consultants Group Code of Conduct. Further details can be found at remunerationconsultantsgroup.com. Kepler’s parent company, Mercer, provides unrelated services to the company in the areas of all-employee reward and retirement benefits.
The Remuneration Committee is satisfied that the advice it receives from Kepler is independent. During the year, Kepler supported the committee in preparing this Directors’ Remuneration Report, provided remuneration benchmarking survey data to support the salary review for the Executive Committee, provided advice on the design of the long-term incentives, and calculated the total shareholder return of Diageo and its peer companies for the 2012 and 2013 Performance Share Plan (PSP) awards and provided periodic updates on all outstanding performance cycles. The fees paid to Kepler in relation to advice provided to the committee were £137,935 and are determined on a time and expenses basis.
During the year, Linklaters provided advice on the Directors’ Remuneration Report. Fees paid in relation to this advice, again on a time and expenses basis, were £6,000. Linklaters also provide other legal advice from time to time on certain corporate matters.
The committee is satisfied that the Kepler and Linklaters engagement partners and teams that provide remuneration advice to the committee do not have connections with Diageo that may impair their independence. The committee reviewed the potential for conflicts of interest and judged that there were appropriate safeguards against such conflicts.
Clifford Chance provided advice on the operation of share plans during the year.
New York Stock Exchange (NYSE) corporate governance rules
Under applicable SEC rules and the NYSE’s corporate governance rules for listed companies, Diageo must disclose any significant ways in which its corporate governance practices differ from those followed by US companies under NYSE listing standards.
Diageo believes the following to be the significant areas in which there are differences between its corporate governance practices and NYSE corporate governance rules applicable to US companies.