Sage Group PLC

Remuneration Information • Feb 14, 2019

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RNS Number : 0526Q

Sage Group PLC

14 February 2019

The Sage Group plc. (the Company)

14 February 2019

Proposed amendment to Directors’ remuneration policy (the 2019 Policy)

In advance of the Company’s Annual General Meeting (the AGM) to be held at noon on 27 February 2019, at Sage, North Park, Newcastle upon Tyne, NE13 9AA, and following consultation, the Company wishes to confirm a change to the 2019 Policy which will be put to a shareholder vote at the AGM.

On approval of the 2019 Policy, and thereafter for the life of the Policy, the Company proposes to reduce the “on target” bonus payout for executive directors from 70% to 50%.  As a result, the disclosure made by the Company on page 112 of the 2018 Annual Report and Accounts (the Annual Report) under the heading “Illustration of our remuneration policy for 2019” should be read as follows. No changes are proposed to the “Below threshold performance” and the “Maximum” scenarios set out in the table on page 112.

Performing in line with expectations	- 87.5% of salary payout in annual bonus (50% of maximum opportunity).  PSP vested shares equivalent to 100% of salary (50% of total shares available)

In addition, the section of the 2019 Policy table on page 109 of the Annual Report should be considered to be amended to read (new wording added in italics).

Alignment with strategy / purpose	Operation	Maximum opportunity	Performance measures
Annual bonus Rewards and incentivises the achievement of annual financial and strategic targets. An element of compulsory deferral provides a link to the creation of sustainable long-term value creation.	Measures and targets are set annually and payout levels are determined by the Remuneration Committee after the year-end based on performance against those targets. The Remuneration Committee may, in exceptional circumstances, amend the bonus payout should this not, in the view of the Remuneration Committee, reflect overall business performance or individual contribution. A minimum of one-third of any annual bonus earned by Executive Directors is delivered in deferred share awards with the remainder delivered in cash. The deferral period will usually be a minimum of three years.	175% of salary Up to 50% of the bonus can be paid for delivering a target level of performance	– At least 70% of the bonus will be determined by measure(s) of Group financial performance; - No more than 30% of the bonus will be based on pre­determined financial, strategic or operational measures appropriate to the individual Director. The measures that will apply for the financial year 2019 are described in the Directors’ Annual Remuneration Report

Clarification of performance measures to be used during the 2019 Policy

On page 124 of the Annual Report the use of annualised recurring revenue growth (ARR) as the relevant measure for both the long- and short-term incentive plans in FY19 is proposed. The Remuneration Committee (the Committee) has determined that a focus on ARR is the most appropriate measure in order to drive operating performance and ultimately to enhance enterprise value. The Committee acknowledges that the use of this measure across both plans will need to be monitored as the business evolves and as such commits to review the continued applicability of ARR throughout the three-year period of the 2019 Policy.

A copy of the Annual Report is available to download from the Company’s website here: https://www.sage.com/investors/annual-report/

No other disclosures in the Annual Report are affected. There is no change to the contents of the AGM Notice, which was mailed to shareholders on 22 January 2019.  A copy of the AGM is available to download from the Company’s website here: https://www.sage.com/investors/investor-downloads/other-downloads/

Enquiries

The Sage Group plc

+44(0) 191 294 3457

Jonathan Howell, Chief Financial Officer

Lauren Wholley, Investor Relations

Amy Lawson, Media

FTI Consulting +44(0) 20 3727 1000

Charles Palmer

Dwight Burden

About Sage

Sage is the global market leader for technology that helps businesses of all sizes manage everything from money to people - whether they're a start-up, scale-up or enterprise. We do this through Sage Business Cloud - the one and only business management solution that customers will ever need, comprising Accounting, Financials, Sage Intacct, Enterprise Management, People & Payroll and Payments & Banking.

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