HomeServe : Statement re AGM Voting on Remuneration Report

HOMESERVE PLC

AGM VOTING UPDATE

At HomeServe's Annual General Meeting held on 19 July 2019, the Remuneration Report was supported by a substantial majority of shareholders but received less than 80% support. In accordance with the UK Corporate Governance Code, HomeServe published a statement at the time and today provides this further update which is required within six months of the AGM.

As a result of engagement with shareholders prior to the AGM, the Remuneration Committee understands that some shareholders had concerns around payments made to two directors who left in 2018 and whose departures were announced prior to the start of their notice periods. While the payments were in accordance with HomeServe's remuneration policy and considered to have helped facilitate an orderly handover of responsibilities, the Committee acknowledges that it is considered good practice that notice be served at the time of announcement.

During the latter half of 2019, the Committee consulted with shareholders on changes to the Directors' Remuneration Policy which must be put to a vote at the 2020 AGM. As part of its proposals, the Committee stated that the Policy would be amended to specify that if notice is served to an executive director, this will commence at the date of announcement and therefore allow for no more than 12 months' pay from the date of announcement. Feedback from the consultation is that shareholders recognise this change would prevent the situation which caused concern from occurring again and on that basis are fully supportive of this change.

The dialogue with shareholders on the Remuneration Policy also covered other proposals, principally changes in market practice where governance has evolved in the three years since the last Policy. The proposed new Policy will be published in this year's Annual Report and be subject to a vote at the AGM on 17 July 2020.

The Remuneration Committee thanks shareholders who gave time to comment on the proposals through this process.

23 December 2019