COVID-19 has continued to severely impact the performance of the business following ongoing forced closures, tier systems and significant restrictions on trade. When permitted to trade, the business has performed well. Management is also pleased with the return of customers and sales since the reopening of hospitality on 12 April 2021, which again was restricted by outdoor trading until 17 May 2021, and then social distancing restrictions for the remainder of the period. Pent-up demand continues to entice our young customer base back, and the Group remains hopeful for a sustained return to normality and positive trading through FY22.

Due to lengthy closure periods and restrictions on trading, the priorities of the senior team shifted to ensuring the survival of the business through careful cash management, engaging with all stakeholders including suppliers and landlords to elicit support, ensuring that the Group was able to take maximum advantage of the many forms of Government support, and improving cash liquidity through agreeing a substantial increase in debt funding facility and two equity fundraises.

This has continued to be a period like no other in the Group’s history, and one that has stretched the senior management team to new limits. Rarely does such good underlying business progress and high personal performances go without reward. However, the management team, working closely with the Committee throughout this difficult period, agreed significant salary reductions to support the business and to show solidarity with many other stakeholders who have provided support through this challenging period, and concluded that it was not appropriate to operate an annual bonus plan for the FY21 financial period notwithstanding the management team’s strong personal performance.

In respect of operating the Remuneration Policy in FY22:

• no changes, aside from a cost of living increase, will be made to base salaries of the Executive Directors, benefits or pension provisions. Any new executive Board appointments would receive a workforce-aligned pension provision;
• annual bonus provision for FY22 will be capped at 100% of salary for Executive Directors with a majority based on sliding scale profit-related targets and a minority based on strategic targets. While the profit and strategic targets are currently commercially sensitive, details of the targets and performance against the targets will be disclosed in next year’s Directors’ Remuneration Report;
• the Committee intends to grant Restricted Share Awards (“RSAs”) in line with the Remuneration Policy approved by shareholders in 2020 which will:
  • be set at no more than 100% of salary for Executive Directors;
  • vest after three years from the grant date, subject to continued employment, satisfactory individual performance and a positive assessment against a performance underpin. No shares can be disposed of by Executive Directors until at least five years from grant, other than those required to settle any taxes directly related to the vesting of those shares.

Further details in respect of the RSA grant for 2021 are set out in the Annual Report on Remuneration.

• shareholding guidelines will continue to operate at 200% of salary; and
• the two Non-Executive Directors (not including the Chairman) both received a £5,000 fee uplift for FY22.

The Committee met seven times during the year. The Committee’s main activities were to:

• determine the Chairman’s fee and the framework and policy for the remuneration of the Executive Directors and other members of the Executive Committee and ensure that they remained appropriate in light of Covid-19;
• advise on the design of, and to determine and agree, the total individual remuneration package of each of the Executive Directors and other members of the Executive Committee, giving due regard to any relevant legal requirements, the provisions and recommendations set out in the prevailing Code and the AIM Rules and associated guidance;
• consider and approve the design of, and targets for, the annual bonus (which was initially postponed and then ultimately cancelled for FY21) and long-term share schemes operated for the Executive Directors and other members of the Executive Committee; and
• oversee remuneration and benefit structures and policies throughout the Group’s business and to give advice on any major changes.

Clarity: Our Policy is understood by our senior executive team and has been clearly articulated to our shareholders and representative bodies (both on an ongoing basis and when changes are proposed).

Simplicity: The Committee is mindful of the need to avoid overly complex remuneration structures which can be misunderstood and deliver unintended outcomes. Therefore, a key objective of the Committee is to ensure that our executive remuneration policies and practices are straightforward to communicate and operate.

Risk: Our Policy has been designed to ensure that inappropriate risk-taking is discouraged and will not be rewarded via: (i) the balanced use of annual and long-term pay; (ii) the significant role played by equity in our remuneration arrangements; and (iii) malus/clawback provisions.

Predictability: Our incentive plans are subject to individual caps and our share plans are also subject to market standard dilution limits.

Proportionality: There is a clear link between individual awards, delivery of strategy and our long-term performance, together with the structure of the Executive Board Directors’ service contracts, to ensure that poor performance is not rewarded.

Alignment to culture: Our executive pay policies are fully aligned to Revolution’s culture through the use of metrics in our annual incentive plans that measure how we perform against our KPIs.