Georgia Healthcare Group PLC Annual Report 2018 Governance Remuneration Committee Report continued Key performance measure “KPI” 2018 target 2018 performance MANAGEMENT DEVELOPMENT AND STAKEHOLDER ENGAGEMENT Continuing to strengthen the depth of • Additions to and development of the team. • Oversaw substantial restructuring of the management across the Group, especially Company, which created additional personal at senior and middle management level. development and succession opportunities, and was completed in 2018. • Strengthened the second tier of management by hiring and promoting individuals within clinical, polyclinics and IT. • Extended individual development programme to middle management. • Involved most of the senior executives in an individual coaching programme. Maintaining good relations with our • Demonstrated action toward the goals. • Provided free flu vaccinations and turned stakeholders in Georgia. polyclinics into 24/7 to provide support during a measles outbreak. In addition to the KPIs listed in the table above, the Committee considers non-tangible factors such as leadership and forward-looking strategy development when determining Mr Gamkrelidze’s discretionary compensation. Mr Gamkrelidze’s KPIs largely track the Group’s KPIs as he is expected to deliver on the Group’s strategy, so that more information on the performance against the KPIs can be found in other sections of this Annual Report. The Committee concluded that, in respect of 2018, Mr Gamkrelidze performed well against the significant majority most of the KPI targets. The Committee recognises that Mr Gamkrelidze has played a leading role in driving the completion of a substantial three-year investment programme and business roll-out in all key areas of the healthcare system. Of particular note include, the successful roll-out of the flagship hospitals, the completion of Mega Lab project, which is an important new business and revenue opportunity for the Group, and introduction of dental services into the polyclinics network to support the development of new and more diverse revenue streams. There have also been improvements in quality of care over the year driven by the Group’s key strategic priorities. Mr Gamkrelidze has driven a number of important operational changes, including reorganising senior management’s organisational structure to better align with the business structure. Other such changes include the development and implementation of IT strategy for the Group, introduction of the Quality Culture indicators within the Group and improvements in the way we develop and retain talent. All of these changes will have a material impact in improving the way the business operates over the short and longer term. The Committee also recognises that, against a backdrop of difficult market conditions and more general economic headwinds, the Group’s performance against a number of financial key performance indicators was at the lower end of expectations. As a result, the Committee determined that Mr Gamkrelidze’s performance was generally in line with expectations and determined that Mr Gamkrelidze should be awarded discretionary deferred share compensation of 111,301 shares valued at US$338,511. This amounted to 50% of his maximum opportunity. The Committee remains of the view that the strong deferred remuneration element for the Executive Director is an effective mechanism for aligning management and shareholder interests. Section 4.2(b) of the 2016 Policy describes why the Remuneration Committee steers away from strict weighting of the performance measures and the discretion it retains in respect of determining the number of discretionary deferred shares that may be granted. 102