Whilst the Group continued to make good progress on the opening of new venues to expand its footprint, the severe weather conditions in March and the extended spell of high temperatures throughout May and June 2018 adversely impacted like-for-like sales in the second half of the year. The challenges in the Finance function, which were well documented in last year’s annual report, and the approaches made to the Group by two potential offerors culminating in a formal offer from Stonegate Pub Company Limited, and following the rejection of that offer the immediate resignation of the Chief Executive Officer (“CEO”), were disruptive events that clearly impacted management focus and business results. Consequently, performance under adjusted EBITDA and adjusted profit before tax bonus targets was below the threshold level and as such no bonuses are payable to any of the Executive Directors or senior management team.

Given the underperformance of the business, the Committee decided that it was not appropriate to undertake salary reviews in July 2018 for the Executive Directors or the majority of the senior management team, although certain individuals’ salaries were reviewed during the course of the year to increase alignment with benchmark rates for their roles, particularly where this included expanded responsibilities.

The first tranche of awards granted on IPO was due to vest based on performance to 30 June 2018. On his resignation, the majority of Mark McQuater’s outstanding LTIP awards lapsed in full, although a minority of the first tranche, amounting to 29,159 shares, vested during the period. The vesting calculation was performed by Mercers and reflected the performance conditions and full time pro rating. No other Executive Directors held any LTIP awards that were eligible to vest during the year.

As stated above, Mark McQuater resigned from the Board effective 17 October 2017. Mark was placed on garden leave from that date and, under the terms of his service contract, will continue to receive salary, benefits and pension payments over his 12-month notice period.

Rob Pitcher was appointed as his successor and joined the Board as CEO on 25 June 2018. His salary was set on appointment at £350,000, taking into account his experience, the market rate for this role at similar companies and the salary of his predecessor. Benefits and pension contributions are provided in line with the remuneration policy as described on the following pages. Rob Pitcher is eligible for a maximum annual bonus of 100 per cent of salary and a long-term incentive award of 300 per cent of salary that will be allocated in two parts, the first part equivalent to 200 per cent salary shortly after the preliminary announcement of the 2018 results and the second part equivalent to 100 per cent salary shortly after the preliminary announcement of the 2019 results.

In order to ensure a smooth transition, and to minimise disruption to the day-today operations of the business, during the period between the resignation of Mark McQuater and appointment of Rob Pitcher, Keith Edelman took up the position of Executive Chairman. The Committee approved supplementary remuneration to account for the additional responsibilities and time commitment, increasing his annual fee to £330,750 over the period in question. His fee reverted to its previous level of £90,000 on resumption of his former role.

As described on the following pages, we are submitting a revised remuneration policy for approval at the 2018 AGM. The Committee reviewed the policy during the year and concluded that it remains appropriate and fit for purpose, and as such no material changes to the policy are proposed.

Executive Directors will continue to receive salary, benefits and pension payments as defined in the policy. Both will be eligible for a bonus payment of Michael Shallow Chairman of the Remuneration Committee PROMOTING A STRONG AND SUSTAINABLE PERFORMANCE CULTURE Revolution Bars Group plc Annual Report and Accounts 2018 39 up to 100 per cent of salary, contingent on the satisfaction of stretching EBITDA, PBT and personal performance targets as in prior years.

The CEO will receive an LTIP award in the coming year with a face value of 200 per cent of salary. This award will vest after a three-year performance period, based on EPS and TSR performance targets. A further award with a face value of 100 per cent of salary is to be issued after the preliminary announcement in 2019. Awards made in 2018 and thereafter will also be subject to appropriate recovery and withholding provisions, in line with best practice.

The Committee met four times during the year. As well as the routine matters set aside for the Committee, as set out under Directors’ remuneration policy on page 40, its primary business was to consider and agree:

• whether outstanding awards under the Long Term Incentive Plan would vest contingent upon the Board recommended offer for the Group from Stonegate;
• the terms of the severance package offered to Mark McQuater who resigned from the business on 17 October 2017 following shareholders’ vote to reject Stonegate’s offer for the business;
• an adjustment to the remuneration for Keith Edelman who temporarily relinquished his role as Non-executive Chairman to become ExecutiveChairman until a replacement CEO was able to commence employment;
• the remuneration package for Rob Pitcher who joined as the Group’s new CEO on 25 June 2018; and
• awards under the Long Term Incentive Plan (“LTIP”) to Mike Foster and new members of the senior management team as well as small top-ups to other members of the senior management team to ensure comparability between team members.

Mercer was engaged on 1 July 2017 to provide advice to the Committee in relation to the vesting of LTIP awards in connection with the proposed offer for the Group and Aon was engaged to provide support on the accounting calculations in respect of LTIP awards and other matters.