Corporate Governance

2018 Interim Statement

Sophos Group plc (‘Sophos’ or the ‘Company’) is publishing this interim statement in response to the Company’s inclusion in the Investment Association’s Public Register of listed companies who received opposition of more than 20% on any resolution in a General Meeting.

At the AGM in August 2018, the Annual Report on Remuneration received a 32.38% vote against the resolution. In 2017, the same resolution received a vote against of 29.82%. This disappointing result for a second year reflected continued divergence in shareholder views over several of the features of the Company’s executive remuneration arrangements that depart from generally-accepted UK practice but reflect competitive practices in relevant talent markets for the Group.

The Remuneration Policy (the ‘Policy’) was originally approved by shareholders in 2016 and remains broadly unchanged from that outlined in the Company’s IPO prospectus. Remuneration opportunities are benchmarked regularly and remuneration packages have been structured to attract and retain executives in the relevant geographies with the right skills and experience to ultimately drive the long-term success of the Company.

The current Policy will shortly be reaching the end of its three-year term. The Committee is currently conducting a comprehensive review of the Policy, in advance of putting it to a binding shareholder vote at the AGM in September 2019.

In conducting its review, the Committee is taking account of developments in remuneration governance and market practice over the past three years and considering the most appropriate linkage between Group performance and executive remuneration going forward. The Committee will be seeking the views of the Company’s major shareholders and their representative bodies in advance of publishing the Directors’ Remuneration Report for the year ending 31 March 2019 and, on behalf of the Committee, I look forward to engaging with shareholders during this process.

For and on behalf of Sophos Group Plc

Paul Walker
Chairman of the Remuneration Committee

25 February 2019


2017 Interim Statement

Sophos Group plc (‘Sophos’ or the ‘Company’) is publishing this interim statement in response to notification of the Company’s inclusion in the Investment Association’s Public Register of listed companies who received opposition of more than 20% on any resolution in a General Meeting.

At our AGM in September 2017, our Annual Report on Remuneration received 29.82% opposition.  The Remuneration Committee (the ‘Committee’) consulted with a number of our major shareholders in advance of the AGM to provide additional context surrounding our remuneration arrangements, recognizing that a number of features are out of line with typical UK market practice.  We believe that this divergence in opinion contributed the majority of the votes against our Annual Report on Remuneration resolution this year.

The Committee values all feedback received and provided additional rationale for our remuneration arrangements in the 2017 Annual Report on Remuneration.  However, the Committee notes that the Remuneration Policy (the ‘Policy’) under which we implement our executive remuneration arrangements was approved by our shareholders at the 2016 AGM and remains broadly unchanged from that outlined in our IPO prospectus. The IT security market is global, our opportunity is global, and so are the Company’s executives. Sophos remuneration packages have therefore been calibrated to be competitive globally, including in the UK where our CFO is located and on the US West Coast where the CEO, and many of the Company’s executives are located. Remuneration opportunities are benchmarked regularly, and we believe our remuneration packages have been structured in an appropriate way to attract and retain executives in the relevant geographies with the right skills and experience to drive the long-term success of the Company.

In particular, the Committee believes that the Policy measures and rewards the performance of the Group’s executives against the best measures of the Group’s performance given its current size and stage of growth. The Committee feels these metrics are appropriate now for focusing the Group’s executives on growing the business and establishing a strong customer base from which to build on. However, the Committee remains committed to keeping this under review and recognises that as Sophos matures as a business, it may become appropriate to look at a different, possibly broader, selection of metrics with which to focus the Group’s executives on delivering in additional areas.

The Policy is next due for shareholder approval in 2019 and the Committee will continue to review developments in market practice in advance of its renewal. In the meantime, the Committee and the Board welcome all opportunities to engage with shareholders on the Company’s remuneration arrangements.

For and on behalf of Sophos Group plc

Paul Walker
Chairman of the Remuneration Committee

24 November 2017

DATE DOCUMENT NAME FORMAT
12 JUL 2019 CFO Remuneration Disclosure

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