Remuneration report

The following report by the Remuneration Committee has been approved by the Board for submission to the shareholders at the 2011 Annual General Meeting. Deloitte LLP has audited the following items stipulated in law for their review:

Members of the Committee during the year are set out in Corporate governance. The Committee’s Terms of Reference are available from the Company’s website at www.aegisplc.com.

During the year, the Committee obtained ad-hoc advice on executive remuneration matters from independent remuneration consultants, Deloitte LLP. These services comprised the provision of market data benchmarks in relation to specific executive roles, an update on current market practice and trends, advice on certain corporate governance aspects with respect to executive remuneration and review of this report. As noted previously, Deloitte are also the Company’s auditors and have provided remuneration services in compliance with the Ethical Standards of the Auditing Practices Board. Both the Company and Deloitte are satisfied that appropriate measures and controls are in place to ensure no conflicts arise from providing these services. The Committee also received advice where appropriate from the director of group human resources and the company secretary. No individual is involved in decisions relating to their own remuneration.

Remuneration policy /

The Company aims to balance the need to attract, motivate and retain high calibre talent with the need to be cost effective, reward exceptional performance and create shareholder value. The Committee reviews remuneration strategies and policies to balance these factors whilst also taking into account general macro-economic conditions impacting the Company, changes in business strategy, investor expectations and the wider compensation context of employees across the Group. During the 2010 reviews the design of the annual cash bonus schemes was extensively revised to incorporate more demanding annual and year on year performance measures; enhanced controls to ensure equitable profit share between management and shareholders; greater transparency to incentivize performance and some linkage of the share schemes to the annual bonus arrangements for senior managers. The resulting reward policy for the Executive Directors and senior management has an enhanced focus on delivery of a high performance culture.

The Committee reviews base salaries in the context of total remuneration and determines remuneration levels to be aligned with relevant market practice plus the experience, performance and retention value of the individual. It also assesses the ratio of fixed and performance-based remuneration with a view to strengthening the link between remuneration and performance, the mix of short and long term reward, the level of challenge of financial targets and the leverage of incentive arrangements so that the higher levels of reward are focussed on the high performing individuals.

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