TIDMSTAN

RNS Number : 3328B

Standard Chartered PLC

30 September 2022

STANDARD CHARTERED PLC

UPDATE FROM THE REMUNERATION COMMITTEE

In accordance with Provision 4 of the UK Corporate Governance Code, we are providing an update on our statement of 4 May 2022 regarding the AGM votes on Resolution 3, to approve the annual report on directors' remuneration contained in the Directors' Remuneration Report for the year ended 31 December 2021, and Resolution 4, to approve the new directors' remuneration policy contained in the Directors' Remuneration Report for the year ended 31 December 2021.

While both resolutions were passed, with majorities of 73.2% and 68.8% respectively, in recognition that there were a number of votes opposing these resolutions, we announced on 4 May 2022 that we would continue to engage with shareholders to understand their concerns and committed to publish an update on that engagement within six months of the AGM.

The Remuneration Committee Chair invited shareholders representing approximately 70% of the Group's issued share capital to re-engage and share their views on the outcome. A number of these shareholders took up this invitation to meet with the Committee Chair and other Committee members, and the Committee has considered carefully the views shared at these meetings.

With respect to Resolution 3 on the annual report on remuneration contained in the Directors' Remuneration Report, the main concern related to our response to the fine imposed on the Group by the Prudential Regulation Authority ("PRA") relating to reporting and governance failings.

We acknowledge that our Remuneration Report could have provided more information on the significant steps taken by the Committee in reviewing this matter. In particular, we could have included further detail on the Committee's decision making, the remuneration actions that were taken, and the conclusion of the review following the formal PRA findings, that no new issues, themes or individual shortcomings had been identified that had not been considered at the time of the initial review in 2019.

The detailed review of the issues at the end of 2019 when the matter was first identified, and which was revisited in 2021 when the fine was issued, resulted in remuneration actions being taken at both the individual and collective level. Having reflected on the views expressed by shareholders, and as discussed with them during the engagement process, we are satisfied that the remuneration adjustments made were appropriate.

With respect to Resolution 4, on the directors' remuneration policy, the key issue for the opposing votes was the provision which provides the Committee with the flexibility to disapply time proration on the vesting of long-term incentive plan awards for retiring executive directors.

We recognise that this provision is not standard practice in the UK, and confirmed during shareholder engagement that application of this provision will not be automatic. The minimum criteria included in the policy are to provide a guide and gateway for Committee determination of eligibility. However, the Committee would consider carefully each case taking into account all of the circumstances at that time.

If the Committee did decide to disapply pro-ration of outstanding LTIP awards, the relevant directors' remuneration report would include detailed disclosure of the rationale behind the decision and of the resulting outcome. Shareholders would have the opportunity to vote on the appropriateness of its use through the AGM resolution on the relevant directors' remuneration report.

A final update on these matters will be included in our next directors' remuneration report. We would like to thank our shareholders and their representative bodies for taking time to engage with us further.

30 September 2022

For further information, please contact:

Shaun Gamble, Director, Group Media Relations +44 (0) 20 7885 5934

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