Georgia Healthcare Group PLC Annual Report 2018 Governance Remuneration Committee Report continued Shareholding of executive management The following table sets forth the respective GHG shares held by the top members of our Executive Management Team as at 31 December 2017 and 2018. As at 31 December 2017 As at 31 December 2018 Number of Total vested and Number of Total vested and Number of vested unvested unvested Number of vested unvested unvested GHG shares GHG shares GHG shares GHG shares GHG shares GHG shares Irakli Gogia – 204,784 204,784 – 226,612 226,612 David Vakhtangishvili – 199,056 199,056 – 224,615 224,615 Giorgi Mindiashvili – 197,763 197,763 – 216,619 216,619 Enrico Beridze – – – – 29,182 29,182 As mentioned in the Chairman’s Statement, the structure of the Policy as it applies to currently Mr Gamkrelidze equally applies to Executive Management Team. Irakli Gogia, David Vakhtangishvili and Giorgi Mindiashvili receive a modest cash salary, deferred salary shares that vest over five years and the potential to earn discretionary deferred shares that vest over a three-year period. The figures in the table above reflect deferred share salary and discretionary deferred shares granted in 2018 in respect of the 2017 work year. The predominance of deferred shares defines our remuneration structure. Like Mr Gamkrelidze, the Executive Management Team is focused on long-term value creation. Committee effectiveness review and 2019 priorities An external evaluator performed a review of the effectiveness of the Committee. The evaluation principally addressed the composition of the Committee, the structure and effectiveness of the Remuneration Policy and the performance evaluation process. Overall, the performance of the Remuneration Committee was rated highly, with the Committee viewed as working effectively. The Committee is satisfied that good progress has been made on the priority areas identified from the previous Committee effectiveness review. Our priorities for 2019 include implementation of the Company’s revised Remuneration Policy, and in view of the feedback from the Committee effectiveness review, a greater focus on succession planning. The Remuneration Committee will work closely with the Nomination Committee to look at successionplanning processes in place for future senior management positions within the Group. Statement of implementation This sections sets out information on how the Remuneration Policy will be implemented in 2019 if approved by shareholders at the 2019 AGM. Shareholder approval for the existing Directors Remuneration Policy was last received at the 2016 AGM. The Company has proposed changes to the existing Directors Remuneration Policy, and will present the revised Policy (set out on pages 90 to 99) to shareholders for approval at the 2019 AGM. If the new Policy is approved by shareholders, the Company intends to implement the new Policy in 2019 as shown below. a) For Nikoloz Gamkrelidze Summary of planned implementation of the Remuneration Policy during 2019 The figures below are pro-rated given the new Remuneration Policy would be implemented after the AGM. Policy element Commentary Implementation of the Remuneration Policy during 2019 Cash Salary Combined GHG, JSC GHG and JSC Evex US$312,500 Deferred JSC GHG US$486,500 share salary Pension The Executive Director and the Company each contribute 2% of JSC GHG In line with Georgian pension legislation remuneration, and the Georgian government between 0-2% of an Executive in effect since 1 January 2019. Director’s pay. Benefits Details of benefits received by the Executive Director are on page 93. No change to current arrangements is proposed in 2019. Discretionary Maximum 150% of total salary (including cash salary and deferred share salary). Increase in maximum opportunity deferred Awarded annually after the end of the work year in respect of which the award is proposed for the current CEO. compensation is made over a number of GHG shares to be determined by the Remuneration Committee, based on the performance of the Group and the achievement of the Two year holding period for KPIs set for the Executive Director by the Remuneration Committee for the work vested shares. year. Awards vest 33.33% in each of the second, third and fourth years following the work year. Vested deferred shares must then be held for a further two years. At vesting (upon exercise of the nil-cost options), the Executive Director receives (in addition to the vested shares) cash payments equal to the dividends paid on the underlying shares between the date the award was made and the vesting date. 106