Report
Expert Corporate Governance Service (ECGS)
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Etude de l'AG du 04/05/2017

Items 3 - 12: Re-elect the Board. There is insufficient independent representation on the Board. The level of executives on the Board exceeds market practice. The level of gender diversity does not meet ECGS guidelines.

Item 15: Approve the Remuneration Policy. With the exception of the reduction in the pension contribution, the changes proposed to the Remuneration Policy worsen the alignment between pay and performance as they increase the size of recruitment awards and remove the sustainability performance period. The changes also do not address the main concerns over variable remuneration which are the lack of disclosure for some of the STI targets and the use of EPS to determine the entire LTI.

Item 16: Approve the Remuneration Report. The structure is unsatisfactory, though it is weighted more towards rewarding long-term performance. Disclosure of performance targets for the STI prevents analysis of the extent to which the payout is adequately aligned with performance. The LTI is wholly dependent on EPS, which is not considered appropriate given that executives could potentially manipulate the payout. Accelerated vesting in the event of a change of control is possible.

Underlying
GKN PLC

GKN plc is a global engineering company. The Company is engaged in the design, manufacture and service of systems and components for original equipment manufacturers. The Company operates in four segments: GKN Aerospace, GKN Driveline, GKN Powder Metallurgy and GKN Land Systems. The GKN Aerospace segment is a supplier of airframe and engine structures, landing gear, electrical interconnection systems, transparencies and aftermarket services. The GKN Aerospace segment is a supplier of airframe and engine structures, landing gear, electrical interconnection systems, transparencies and aftermarket services. The GKN Powder Metallurgy segment is a manufacturer of sintered components and a producer of metal powder. The GKN Land Systems segment is a supplier of power management products and services. It designs, manufactures and supplies products and services for the agricultural, construction and utility vehicle markets and industrial segments.

Provider
Proxinvest
Proxinvest

Founded in 1995, Proxinvest is an independent proxy firm supporting the engagement and proxy analysis processes of investors. Proxinvest mission is to analyse corporate governance practices and resolutions proposed at general meetings of listed firms.

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Analysts
Expert Corporate Governance Service (ECGS)

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