Proposed changes to the Company’s Remuneration Policy

Gemfields Group Limited (“Gemfields”, the “Company” or “GGL”) is pleased to advise that it has completed an external review of its Remuneration Policy.

On 7th July 2020, Gemfields announced that it had set up a telephone conference call on 16th July 2020 with the Company’s Remuneration Committee and invited shareholders to attend.

Representatives from a number of shareholders and shareholder groups attended that call. Points raised included salaries, annual bonus structure and outstanding long-term incentive awards.

Click here to view the document that was used at the 16th July 2020 shareholder engagement session. The purpose of the document was to provide shareholders in Gemfields with background information relating to remuneration paid to the two incumbent executive directors on the GGL Board in respect of the 2019 financial year ending 31 December 2019.

Further to that shareholder engagement, the Company’s Remuneration Committee began a detailed examination of the best way forward in order to address shareholder concerns and requirements. To that end, the Committee engaged the services of h2glenfern Remuneration Advisory, an independent remuneration consultancy with extensive experience advising international resources companies.

A further shareholder call took place on 14th December 2021 in order to receive feedback on the Committee’s suggested changes to the Remuneration Policy, which would become effective 1st January 2021.

Click here to view the Remuneration Committee’s note as used at the 14th December 2020 shareholder engagement session.

Representatives from a number of shareholders and shareholder groups attended that call. During the call on 14th December 2020, shareholders’ points included the following:

  • Shareholders were supportive of a balanced scorecard approach. There was some debate about whether the number of criteria was too many.
  • Some shareholders expressed concern about the approach of measuring metrics against the previous year and the previous three years, rather than setting specific forward targets.
  • Shareholders noted the importance of getting the Free Cash Flow definition correct.
  • Shareholders suggested a Return on Capital criterion be considered.
  • Shareholders agreed that bonuses should be subject to malus and clawback provisions.
  • Shareholders asked whether bonus deferral had been considered.

Click here to view a note which sets out the Company’s further response to points and questions put by shareholders on its annual bonus proposals during the 14th December 2020 call.

The Remuneration Committee is very grateful to the shareholders who participated in the remuneration feedback sessions, and for their views which have assisted in shaping adjustments to remuneration policy.