Georgia Healthcare Group PLC Annual Report 2018 Governance Remuneration Committee Report continued The Remuneration Committee believes this to be an equitable proposal for both shareholders, CEO and future Executive Directors and one What is in this report? which can retain and incentivise Executive Directors to deliver on our This Directors’ Remuneration Report describes the strategic objectives whilst being reasonable and proportionate in terms implementation of Company’s Directors’ Remuneration Policy of monetary value. Subject to the approval of our shareholders, the cash and discloses the amounts earned relating to the year ending salary and cap with respect to discretionary deferred shares increases 31 December 2018. will take effect from the date of the AGM 2019. The Remuneration Committee does not intend to consider any further increases to the The report complies with the provisions of the Companies CEO’s compensation before the Policy is next due for renewal. Act 2006 and Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations Finally, the Remuneration Committee is cognisant of shareholder 2008. The Remuneration Report has been prepared in line with feedback on our remuneration report and is committed to being the recommendations of the new UK Corporate Governance transparent in the level of disclosure associated with Executive Code 2018 and the requirements of the UKLA Listing Rules. Directors performance targets where this does not risk disclosing commercially sensitive information. This report details the new Policy which will be voted on at the 2019 AGM, and how it differs from the 2016 Policy. Subject to The new Policy is set out in full on pages 90 to 99. approval by shareholders, the new Policy will apply from the 2019 AGM. The full 2016 policy can be found on pages 96 to 101 Pay for performance in 2018 of the Annual Report 2017: http://ghg.com.ge/uploads/files/ The Remuneration Committee made its annual determination of the GHC%2028272%20Annual%20Report%202017%20WEB.pdf. discretionary remuneration for the CEO and for senior management. We measured Mr Gamkrelidze’s performance against the KPIs set The Annual Report on Remuneration (set out on pages 89 to by the Remuneration Committee. Alongside Group financial targets 107), which includes the Annual Statement by the Chairman the Remuneration Committee considered a number of stretching of the Remuneration Committee set out on pages 89 and 90, individual targets with key achievements including the leading role will be subject to an advisory vote at the 2019 AGM. he has played in driving the completion of the substantial three-year investment programme and business roll-out in all key areas of the healthcare system covered by Georgia Healthcare Group. DIRECTORS’ REMUNERATION POLICY As a consequence of the performance summarised above, the Subject to Shareholder approval, this Policy will take effect from the Remuneration Committee approved an award of 50% of maximum date of 2019 AGM on 22 May 2019 and will become formally effective opportunity which the Remuneration Committee consider to be for three years following that date. a fair reflection of the his and the Company’s performance. Full detail on the performance targets set in respect of 2018 and the level It is a provision of this Policy that the Group will honour all pre-existing of performance achieved can be found on pages 101 and 102. obligations and commitments that were entered into prior to this Policy taking effect. The terms of those pre-existing obligations and We have provided more detail this year, having listened to shareholder commitments may differ from the terms of the Policy and may include feedback. We trust that shareholders will find this detail meets the (without limitation) obligations and commitments under service desired level of transparency. agreements (as detailed in more information below), deferred share remuneration schemes and pension and benefit plans. After the Policy Other activities of the Remuneration Committee becomes effective after the 2019 AGM, the Group will either amend • Considered the revised UK Corporate Governance Code 2018 and the existing terms of the service contracts of, or enter into new the impact on role and remit of the Remuneration Committee. service contracts with, the Group’s sole executive director and • Actively engaged with workforce during site visits across CEO, Nikoloz Gamkrelidze to incorporate the terms of the new Policy. the country. • Reviewed and recommended updated Terms of Reference The Remuneration Committee retains its discretion under the of the Committee. new Policy to make minor amendments to the Policy for regulatory, • Reviewed the Group companies remuneration structure. exchange control, tax or administrative purposes or to take account • Reviewed changes to pension provision following the of a change in legislation without obtaining prior shareholder approval. introduction of Georgian state pension legislation. Executive Directors’ Remuneration Policy Looking forward The Policy provides for an Executive Director’s remuneration package The Committee have devoted a considerable amount of time to be comprised of the elements set forth below. For the avoidance to reviewing the executive remuneration framework and subject of doubt, all references to Executive Directors refer to the Executive to shareholder approval, it is our intention that the new Policy will Directors of GHG PLC and currently covers the present Executive operate for the next three years as the CEO and Executive Directors Director, Nikoloz Gamkrelidze. The compensation structure of the and the Executive Management Team continue to focus on delivering Executive Management Team (a group of about 5-10 people who long-term value to you, our shareholders. We hope that the new serve on the management board of the Group, but who are not Policy will meet with your support at the upcoming 2019 Annual Executive Directors of GHG PLC) is set by the Remuneration General Meeting. Committee and is modelled on this Policy but the Remuneration Committee is not bound by the Policy when setting their remuneration packages. The Remuneration Committee can set different vesting Tim Elsigood terms and conditions for the Executive Management Team as it Chairman of theRemuneration Committee thinks appropriate. 2 April 2019 90