Travis Perkins PLC — Remuneration Information 2013

May 3, 2013

Chairman's Office Lodge Way House, Lodge Way Harlestone Road, Northampton NN5 7UG Registered in England 824821

Replacement Deferred Share Bonus Plan 2013 19th April 2013

Dear Shareholder

We indicated to you in 2011 our intention to review the Group's executive remuneration framework to consider how it might be adapted to better support the Company's business strategy following the acquisition of the BSS group of businesses. We sought views from shareholders at the time of the acquisition and felt that major changes were not appropriate until the BSS group had been successfully integrated. Now that this integration has been successfully achieved and the synergy targets exceeded, we have taken time to review the current reward structure which has served us well over the last five years. It is vital that both our short and long-term incentives reward our leaders in maintaining the focus on the strategies described earlier in the CEO's section of the report on pages 20 to 29. The goal, for each of our businesses, is that they equal the highest operating margin and return on capital of any business operating in their segment.

As part of the review, we sought independent advice to consider both the appropriate external benchmarks to be taken into account when setting the overall levels of remuneration, and the appropriate amount and mix of fixed and variable pay.

Following independent advice, in terms of external benchmarks when considering the overall level of remuneration, we took into account companies ranked in the FTSE 75-125 and other companies that operate in our markets.

The Committee recognises that changes in remuneration structures should not be a frequent occurrence and therefore, has tried to ensure that any proposals will be appropriate for the next 4 to 6 years. This is in line with the forthcoming requirement for a forward looking policy statement on remuneration.

We are very conscious of the current environment for pay in listed companies and have closely monitored government consultations on executive pay.

Having considered all the relevant information, we have limited change to the annual bonus scheme which will have more deferred and risk adjusted elements built into it. We have tried to keep matters simple.

We believe that our proposals will improve the alignment of executives with the long-term interests of shareholders.

The main features of the proposals to alter the structure of executive remuneration and introduce both clawback and forfeiture mechanisms are as follows:

• • The current annual bonus plan would be replaced. At present, bonus levels are 120% for the CEO and 100% for other directors, with 25% of the actual bonus deferred in shares for 3 years with no further performance targets;

• • A new bonus plan would be introduced which maintains the level of cash bonus potential but provides an opportunity for an increased deferred share bonus;

• • This deferred share bonus element would be subject to both clawback (to protect shareholders from unearned rewards) and forfeiture triggers (to better align these awards to absolute returns enjoyed by shareholders);

• • This means directors' ability to earn from annual bonuses would be subject to meeting annual performance targets, no malfeasance, and to sustained performance for shareholders;
• • These represent more stringent, more aligned and more long-term features than current bonus arrangements. We believe that the separate double forfeiture test being applied to annual bonus awards, described in the schedule attached represents a significantly more stringent shareholder approach than found elsewhere;
• • In line with the benchmarked post-BSS market position of the Company, annual bonuses would be increased to 180% for the CEO and 150% for other directors. 50% of the actual bonus would be deferred in shares, in the new bonus bank, and subject to clawback and forfeiture.
• • The shareholding requirement for executive directors will be increased to two times basic salary which will further align shareholder and executive interests.

We believe that the introduction of a new forfeiture measure based on absolute shareholder return criteria – which means the executives cannot earn all their variable pay unless shareholders gain – is in shareholders' interests. There is more detail on the new bonus plan in the attached schedule.

These proposals create a stronger link between pay, individual performance and corporate performance. The shift in emphasis from annual bonuses with a small deferred element to a much heavier weighting on longer-term shareholder return criteria with increased deferral via a 'bank' means that the focus of the incentive package becomes more long-term. It is also a responsible approach to both fixed and variable remuneration for a business which has significantly increased in size since the last remuneration framework review in 2007, and which continues to grow and deliver increased shareholder returns. In the 5 years since that review, increases in base salary for directors have been well below inflation, averaging just under 2% per annum. We are not proposing any above inflation increases to basic pay as we move forward except when there is a significant change to the scope and responsibilities of a role.

I take this opportunity to thank the shareholders we consulted for their constructive feedback and I am pleased that, following the refinements we made to our original proposals, that the majority of shareholders consulted to date have indicated their support for the new incentive arrangements set out in the attached schedule (The Replacement Deferred Share Bonus Plan).

Robert Walker Chairman