Following the introduction of the fifth Capital Requirements Directive, rules were introduced to the General Organisational Requirements, Senior Management Functions and Remuneration parts of the PRA Rulebook and the Senior Management Arrangements, Systems and Controls manual of the FCA Handbook. These require the Group to include a compliance statement on our website in relation to these rules. Our explanation of how we meet these requirements can be found in the document below, which covers (1) Governance (2) Remuneration and (3) Reporting. Further relevant details may be found in our latest Annual Report and Accounts and in our Directors’ biographies, all of which are on this website.
Virgin Money UK PLC
Registered Office: Jubilee House, Gosforth, Newcastle Upon Tyne, NE3 4PL
Registered in England and Wales No. 09595911
Legal and Privacy
Virgin Money UK PLC is registered in England and Wales under the company number: 09595911, and has its registered office at Jubilee House, Gosforth, Newcastle Upon Tyne, NE3 4PL.
Virgin Money UK PLC and Clydesdale Bank PLC are members of the Virgin Money UK group of companies (the "Group"). When we say 'Group' we mean Virgin Money UK PLC; Clydesdale Bank PLC; Clydesdale Bank Asset Finance Limited; CYB Intermediaries Limited; Yorkshire Bank Home Loans Limited; Yorkshire and Clydesdale Bank Pension Trustee Limited; YCBPS Property Nominee Company Limited; Virgin Money Retirement Savings Plan Trustee Limited; CGF No. 9 Limited; Salary Finance Loans Limited; Red Grey Square Funding LLP; St Vincent (Equities) Limited; Yorkshire Bank Limited; Northern Rock Limited; Eagle Place Covered Bonds LLP; Virgin Money Holdings (UK) Limited; Virgin Money Unit Trust Managers Limited; Virgin Money Nominees Limited; Virgin Money Personal Financial Service Limited; Virgin Money Management Services Limited; Virgin Money Limited; Virgin Money Giving Limited; The Virgin Money Foundation; and each other subsidiary or holding company of Virgin Money UK PLC from time to time and each other subsidiary from time to time of any such holding company. An up to date list of the companies in our Group is available on request.
Clydesdale Bank PLC, which trades as Clydesdale Bank, Yorkshire Bank, B and Virgin Money, is registered in Scotland under the company number: SC001111, and has its registered office at 177 Bothwell Street, Glasgow, G2 7ER.
Clydesdale Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register No. 121873. The VAT number of Clydesdale Bank PLC is 261377066.
Virgin Money Limited is registered in England and Wales with registered number 06952311 and has its registered office at Jubilee House, Gosforth, Newcastle Upon Tyne, NE3 4PL.
Please note: this Site is the website for Virgin Money UK PLC which is the holding company of Clydesdale Bank PLC. If you wish to access the banking and financial services of either Clydesdale Bank or Yorkshire Bank please visit www.cbonline.co.uk Link opens in a new window or https://www.ybonline.co.uk
Virgin Money UK PLC
Virgin Money UK PLC, and its subsidiary undertakings comply with the Prudential Regulation Authority's (PRA) Rulebook Remuneration and the Financial Conduct Authority's Senior Management Arrangements, Systems and Controls Handbook (SYSC) 19D & 19E. These rules aim to ensure that firms have risk-focused remuneration policies, which are consistent with and promote effective risk management and do not expose them to excessive risk.
The Remuneration disclosures in respect of the 2023 performance year are set out at the end of the remuneration disclosure section of the 2023 Pillar 3 Report.
These disclosures deliver the requirements of CRR Article 450.
VMUK PLC operates a company-wide remuneration policy, approved by the Virgin Money UK PLC Remuneration Committee. The sections on this page set out a summary of the policy and describe our overarching principles and practice.
About the All Colleague Remuneration Policy
The Remuneration Policy (“Policy”) is subject to independent oversight and control by the Group Remuneration Committee (the “Committee”) for Virgin Money UK PLC (VMUK), which is the ultimate parent company of the consolidated group of companies/subsidiaries (the “Group”), including but not exclusively Clydesdale Bank PLC (“CB”).
The Board of VMUK has delegated responsibility to the Committee to oversee the remuneration arrangements; in particular those of the senior management (Executive and non-executive where appropriate) and employees covered by the Prudential Regulation Authority ("PRA") and the Financial Conduct Authority ("FCA") Senior Management Arrangements, Systems and Controls Remuneration Code ("Remuneration Code") across the Group. Therefore; the Policy has been developed to follow the relevant regulations and guidance from the PRA Rulebook, the EBA sound remuneration guidelines, the FCA Remuneration Code for dual regulated firms (SYSC 19D) and, to the extent they are applicable, the UCITS Remuneration Code (SYSC 19E) and the MiFID Remuneration Code (SYSC 19F) as amended from time to time.
VMUK will not adopt remuneration policies, procedures or practices which are inconsistent with the letter and spirit of the Remuneration Code(s) relevant regulations and guidance. Any breach of a rule referred to in the PRA Rulebook 16.1 will be notified to the PRA.
The Group does not believe that the implementation of this Policy and its practices impairs its ability or the ability of its management company subsidiary to comply with its duty to act in the best interests of the UCITS business it manages.
The committee comprises five independent Non-executive Directors; Darren Pope (“Chair”), Geeta Gopalan, Elena Novokreshchenova and Tim Wade and the Board Chair, David Bennett.
More information on the Remuneration Committee’s role, responsibilities and terms or reference can be found in the Remuneration Committee Charter.
The remuneration for all Material Risk Takers (“MRT”), as captured under the regulatory regimes impacting the Group, noted below, is approved by the Committee.
The VMUK Group operates common Remuneration Committees across VMUK and Clydesdale Bank PLC (“CB”), covering their regulated subsidiaries. This is supported by a Prudential Regulation Authority (PRA) Governance Direction which modifies certain Ring-fenced Bodies Rulebook rules, allowing the Chair of the Remuneration Committee be the same for VMUK and CB.
The Group appoints an independent remuneration consultant as advisor to the Committee on remuneration design and compliance with regulatory guidance. During 2022, the Committee took advice from PricewaterhouseCoopers LLP (PwC). The contractual terms for independent third parties are governed by the Group Procurement Policy.
1.2 Remuneration philosophy and business strategy
VMUK’s overall remuneration philosophy (as reflected in our Policy) is designed to support both our culture and our business strategy (including those of any ring-fenced body). It is based on the approach that remuneration should be linked to the performance and behaviour of an individual, business results over the short and long-term, shareholder outcomes and fair customer outcomes. This means that the Group seeks to reward colleagues fairly for their contribution, whilst ensuring they are motivated to always deliver the best outcomes for our customers. To achieve this, colleagues are rewarded in line with best practice in the UK listed Financial Services sector with absolutely no reward for inappropriate risk taking (including any that is inconsistent with the risk profiles of the UCITS funds we manage), to protect customers, corporate partners, shareholders and wider society.
1.3 Risk Management Framework and Compliance
The Group identifies and manages risk using the Risk Management Framework, which is the totality of systems, structures, policies, processes and people that identify, measure, evaluate, control or mitigate, monitor and report all internal and external sources of material risk. It supports the Board of Directors’ (the “Board”) aim of achieving the long-term and sustainable growth of the Bank. Included within the overall governance framework are several Committees with a specific Risk Management focus, although all Committees will consider appropriate management of risk as part of their wider remit.
The remuneration policy is consistent with the Group’s Risk Framework and its risk appetite, which includes key risk types (e.g. credit, market, operational, liquidity and reputational risk). The remuneration policy does not encourage any risk taking that would undermine its ability to comply with relevant regulations (including any ring-fencing obligation).
1.4 Conflicts of Interest
The Group operates established processes and procedures that are designed to identify, document and manage conflicts of interest. These apply to the Policy and other remuneration matters as they would to all other areas of the business and include requirements for line manager oversight and individual voluntary disclosures to be made and recorded.
The Policy prohibits any employee from being involved in decisions on their own remuneration. Furthermore, all employees are required to adhere to our code of conduct, which encompasses conflicts of interest.
Specific measures are in place to avoid conflicts of interest as regards control functions as set out below.
1.5 Control Functions
The Group ensures that, as appropriate, all colleagues engaged in control functions are independent from the business units they oversee and have appropriate authority to undertake their roles and duties.
Variable remuneration for control function colleagues is determined by the achievement of their own functional objectives. The successful completion of these objectives influences the size of allocation which the function receives from the main bonus pool.
1.6 Identification of Material Risk Takers
VMUK identifies individuals who have a material impact on the risk profile of the Group and individuals who have a material impact on the risk profiles of any regulated entities or the funds managed under the control of the Group as Material Risk Takers (“MRT”). The relevant regulated technical standards are taken into account in identifying MRT.
The Committee is responsible for undertaking a review of the application of the principles under the relevant technical standard no less frequently than annually.
2.1 Remuneration principles
The following overarching remuneration principles are applied to our Policy, which is intended to:
- I. maintain capacity for growth. The Group ensures it remains competitive in the financial services market through regular market reviews and provides competitive, transparent and fair rewards, benefits and conditions that attract, recognise, motivate and retain high performers;
- II. support the Risk Management Framework and ensure a safe approach to remuneration. Risk considerations are a material factor in the determination of pay;
- III. provide a benefits package that supports colleagues and their families whilst enabling them to plan for the future;
- IV. treat colleagues in the same way that it serves customers – with honesty, transparency and fairness.;
- V. align the interests of employees and shareholders through employee share ownership and by utilising appropriate instruments (e.g. VMUK PLC shares) for any deferred variable pay award;
- VI. deliver outcomes over short and long-term horizons with appropriate performance and risk adjustments, ensuring performance assurance principles are applied;
- VII. ensure malus adjustments and clawback can be applied to all variable pay;
- VIII. ensure the approach to senior remuneration is fair, competitive and supportive of the Group’s strategy.
- IX. subject individual employee awards for heads of control functions and Material Risk Takers to Committee review and supervision.
2.2 Elements of remuneration and framework
Employee remuneration is composed principally of fixed and variable elements of reward as follows:
- I. Fixed reward:
a. Fixed remuneration: base salary
b. Benefits (including retirement benefit as appropriate)
- II. Variable Reward:
a. Employees may receive variable pay in non-deferred cash or in deferred awards delivered in appropriate instruments (e.g. VMUK PLC shares).
b. Selected employees may participate in discretionary share award plans, subject to Remuneration Committee review and approval.
Any awards made under such plans include a personal performance underpin to ensure there is no payment for poor conduct or below expected performance.
Ratios of fixed to variable remuneration will be set so as to ensure that fixed and variable components of total remuneration are balanced as well as compliant with regulatory guidance. The overall annual variable pay opportunity for colleagues as a ratio of total fixed will not exceed a ratio of 2:1. As such, the fixed component is a sufficiently high proportion of total remuneration to allow the Group to operate a fully flexible policy on variable remuneration components including paying no variable remuneration component.
2.3 Operation of Remuneration
2.3.1 Base Salary
Purpose and link to strategy
Recruit, reward, retain and recognise role responsibilities
Base salaries are paid monthly and reviewed at least annually in line with economic indicators. Salaries reflect the size, scope and complexity of the role considering responsibilities with reference to market rates and internal relativities. They are also reflective of the skills and experience of the incumbent.
2.3.2 Benefits (including retirement benefit as appropriate)
Purpose and link to strategy
Recruit, reward, retain and contribute towards employee wellbeing and funding for retirement.
Benefits provided may be made up of core benefits (e.g. Holiday, Private Medical) and extra voluntary benefits (as appropriate).
The Group operates a defined contribution pension scheme open to all colleagues. Cash allowances in lieu of an employer pension contribution are provided where annual or lifetime allowances are exceeded.
2.3.3 Group Annual Team Bonus arrangements for eligible employees
Purpose and link to strategy
Designed to reward for team contribution towards Group performance against annual targets.
Performance is measured against a range of key financial metrics together with non-financial metrics which are linked to the Group’s strategic priorities and typically include: strategic, customer, risk, conduct and people indicators.
The Committee review and approve the metrics used and appropriate targets against the Group’s strategic priorities and the risk-adjustment model at the beginning of each year for the financial year ahead.
Individual awards are based on the Group’s performance outcome only (other than for individual conduct or performance adjustments) with the level of award determined by the grade of the role and the size of the variable pay pool.
The variable pay pool (and therefore individual awards), are determined at the end of the performance period (financial year) by the Committee, to ensure that the outcome is fair in the context of overall Group performance and is subject to an overall risk assessment (and where appropriate adjustment for ex-ante or ex post risk events) and to apply qualitative judgements in the final bonus decision.
Awards can be made in cash or appropriate instruments (e.g. VMUK PLC shares) following the financial year. All awards may be subject to deferral at the Group’s discretion.
MRT may be subject to additional deferral and/or retention where remuneration exceeds the de-minimis threshold. Awards are subject to the malus and clawback policy.
2.3.4 Group Annual Discretionary Bonus arrangements for eligible employees
Purpose and link to strategy
Designed to reward for individual contribution towards Group performance against annual targets.
A small number of roles with a high level of strategic and execution responsibilities or key roles from a regulatory or commercial perspective will have bonus determined individually using a discretionary model.
The variable pay pool is determined at the end of the performance period (financial year) by the Committee in line with the ‘Team’ bonus pool approach; however, line manager discretion is then applied with a qualitative judgement on how the pool is distributed amongst this population within a defined range of potential awards.
Awards can be made in cash or appropriate instruments (e.g. VMUK PLC shares) following the financial year end. All awards may be subject to deferral at the Company’s discretion and regulatory holding periods may be applied as necessary.
Where applicable, taken together with the LTIP (see below) and any other relevant awards under all-employee share schemes the total variable opportunity in respect of the financial year is limited by the 2:1 ratio of variable to fixed pay.
Material Risk Takers may be subject to additional deferral and/or retention where remuneration exceeds the de-minimis threshold. Awards are subject to the malus and clawback policy.
2.3.5 Group Annual Leadership Team Bonus arrangements for eligible employees
Purpose and link to strategy
Designed to reward Leadership Team members for Group and personal performance in line with strategic objectives.
Discretionary and based on both Group and individual performance measures (objectives) within the year. Group measures and targets align with those of the annual bonus plan for other colleague populations, with personal performance determined by an assessment of individual objectives set and approved by the Board for the year ahead.
Taken together with the LTIP (see below) and any other relevant awards under all-employee share schemes the total variable opportunity in respect of the financial year is limited by the 2:1 ratio of variable to fixed pay.
Awards can be made in cash or appropriate instruments (e.g. VMUK PLC shares) following the financial year. All awards may be subject to regulatory deferral and/or retention and/or Company deferral at the Group’s discretion and regulatory holding periods may be applied as necessary to comply with the relevant regulatory regime.
Where it is appropriate for some Control Functions (i.e. Risk, Audit & Compliance), business function specific bonus plans may be in place. All bonus plans operate on the same underlying principles as the Group bonus plan(s) but specific plans may include an element of reward for performance in line with the specific strategy and objectives of that particular business function.
2.3.6 Other plans for eligible employees - Long-Term Incentive Plan (“LTIP”)
The Remuneration Committee has responsibility for determining who will be granted Awards under LTIP. The value awarded will be determined by the Remuneration Committee with reference to prior performance.
Purpose and link to strategy
Delivery of the Group’s strategy and growth in shareholder value.
Awards are subject to performance conditions aligned with the Group’s long-term strategic goals and granted as conditional share awards. Performance conditions are normally tested over a period of three financial years. Upon the vesting of shares at the end of the required deferral period, a regulatory holding period may be applied as necessary.
The weighting of metrics used is determined before grant with no more than 25% of the maximum vesting for threshold performance. The Committee has discretion, in exceptional circumstances, to amend targets, measures or weightings if a corporate event takes place (e.g. major transaction, including change of control or capital raising) that in the opinion of the Committee causes the targets, measures or weightings to be no longer appropriate or such adjustments to be reasonable.
The Committee can, at its discretion, apply malus and/or clawback to all or part of any award.
Taken together with the Annual Bonus where applicable and any other relevant awards under all-employee share schemes the total variable opportunity in respect of the financial year is limited by the 2:1 ratio of variable to fixed pay, subject to the LTIP opportunity being at least half of the total variable pay opportunity.
2.3.7 Other All Employee Plans – Free Share Awards
From time to time the Group may award all eligible colleagues a nominal award of Free Shares under the Group Share Incentive Plan (SIP). The Free Shares are held in the SIP Trust on behalf of participants and are subject to retention periods in line with HMRC rules. Free Shares may also be subject to service conditions.
Additional Information for UCITS scheme management
Where a Group company (e.g. Virgin Money Unit Trust Managers Ltd) is a UK UCITS management company, it is acknowledged that the management company has specific obligations to establish and apply remuneration policies and practices for UCITS Remuneration Code staff (broadly, senior management, MRT, staff engaged in control functions and any employees in the same remuneration bracket who have a material impact on the risk profile of the management company or its UCITS) that:
- Are consistent with and promotes sound and effective risk management;
- Does not encourage risk taking that exceeds the level of tolerated risk of VMUTM or that is inconsistent with the risk profiles of the funds it manages;
- Encourages behaviours that are aligned with the business strategy, objectives, values and interests of the management company, the funds, and the investors in the funds, and seeks to avoid conflicts of interest;
- Does not impair VMUTM’s ability to comply with its duty to act in the best interest of its customers and the funds it manages;
- Recognises that remuneration should be competitive and reflect both the financial performance of the company and personal performance. Accordingly, remuneration for Code Staff is made up of fixed pay (salary and benefits, including pension) and variable (performance-related) pay;
- Recognises that fixed and variable components should be appropriately balanced and that the variable component should be flexible enough so that in some circumstances no variable component may be paid at all. Variable pay may also have an element paid in shares and be subject to deferral and clawback requirements and can be made up of both short term and long terms awards (reflecting performance over shorter and longer term periods)1;
- Ensures that the remuneration of the senior officers in the risk management and compliance functions is based on the achievement of objectives linked to their functions, independent of the performance of the business areas that are within their remit;
- Ensures that payments for early termination reflect performance achieved over time and are designed not to reward failure;
- Will not include guaranteed variable remuneration other than in exceptional circumstances and only then in the context of hiring new staff and limited to the first year of engagement;
- Does not allow personal investment strategies to be used by individuals to undermine the risk alignment effects embedded in their remuneration arrangements;
- Is not paid though vehicles or methods that facilitate avoidance of the UCITS remuneration code;
- Is aligned with relevant regulatory obligations, remuneration principles and proportionality provisions of the FCA guidance;
- Is governed by a policy that is subject to annual independent review by the Compliance function and the VMUTM Board;
1Note that the external independent directors receive fixed fees and no variable remuneration
Accordingly, in the application of the principles set forth and in the award (including deferral and/or clawback) of variable pay for its Code Staff, remuneration shall also be governed in line with relevant obligations of SYSC 19E: UCITS Remuneration Code including (where applicable):
- Requirements for at least 50% of variable remuneration to be made in the form of units of the UCITS concerned and/or other appropriate instruments (e.g. VMUK PLC shares)
- Retention periods aligned to the long-term interests of the management company, its UCITS and UCITS investors
- Deferral of awards over appropriate holding periods and of at least three years
- As necessary, performance adjustments of paid or vesting variable remuneration.
2.4 Share Ownership
In line with good corporate governance guidelines, there is a requirement that Executive Directors and members of the Leadership Team maintain a material long-term investment in VMUK shares.
2.5 Code of Conduct
All staff are expected to adhere to the Code of Conduct, and underlying policies, which adheres to the behaviours and expectations set out in the PRA/FCA’s individual conduct standards. In addition to this, the reward for employees in senior management positions within the Group’s corporate governance framework (which includes MRT for the Group and any of its subsidiaries) will be assessed annually through individual performance assessment to ensure the sound and prudent management of the organisation through adherence to the relevant frameworks, procedures, controls and policies.
The input of the Group’s risk and compliance functions is sought where appropriate in setting remuneration. The Risk function has primary responsibility for oversight and challenge of the Remuneration Policy on behalf of the Chief Risk Officer (CRO). This includes ensuring that VMUK establishes, implements and maintains adequate policies and procedures sufficient to ensure compliance with applicable Regulatory Standards. All awards are subject to a comprehensive risk assessment (including conduct risk) before release, with clawback provisions applying thereafter. No individual determines their own remuneration.
2.6 Performance Adjustment
In the interests of ensuring sound risk management for the benefit of the Group as a whole, and to ensure compliance with regulatory obligations, all variable remuneration is subject to malus and clawback provisions. These conditions are set out in the service agreements / contracts for senior colleagues as well as the Annual Bonus Plan and LTIP rules.
The Committee retains discretion to reduce unvested variable remuneration (malus) and to clawback vested variable remuneration (clawback) in circumstances deemed appropriate by the Committee. The circumstances in which the Remuneration Committee may make a malus/clawback determination include but are not limited to:
- I. reasonable evidence of misbehaviour or material error by the Participant (including where the Participant participated in or was responsible for conduct which resulted in significant losses to the Group, or where the Participant failed to meet appropriate standards of fitness and propriety);
- II. a material downturn in the financial performance of the Group, or the business unit in which the Participant is employed;
- III. a material failure of risk management in the Group or the business unit in which the Participant is employed; and
- IV. such other circumstances in which the Group is required to operate malus under the Remuneration Code.
3. Quantitative Disclosures
Quantitative disclosures for VMUK regulated entities are included in the relevant publication in accordance with regulatory guidance:
- I. CRD V/BIPRU firms – Virgin Money UK PLC and other regulated subsidiaries as part of the Group, including but not exclusively Clydesdale Bank PLC (“CB”) in the relevant Pillar 3 disclosure.
- II. UK UCITS management companies – in the Virgin Money Unit Trust Managers Ltd (VMUTM) annual report of the relevant UCITS fund.
Virgin Money Unit Trust Managers LTD
Virgin Money Unit Trust Managers (VMUTM) does not directly employ any staff, other than its two independent non-executive directors. Staff are provided from both Virgin Money UK PLC and Standard Life Aberdeen PLC (the ultimate parent entities) on a secondment basis.
In accordance with the FCA’s UCITS Remuneration Code, VMUTM is required to establish and apply a remuneration policy for certain categories of staff whose activities have a material impact on the risk profile of VMUTM or the UK UCITS funds (“UCITS”) that it manages (UCITS Remuneration Code Staff or “Code Staff”). VMUTM applies the remuneration policies (the “Remuneration Policies”) of the parent entities in the secondment model.
The Remuneration Policies document the remuneration policies, practices and procedures of the parents and are reviewed annually.
Business Ethics at Virgin Money
Code of Conduct
Good business ethics is all about ‘doing the right thing’ for our colleagues, our customers, our partners and suppliers, our communities, and the environment.
But here at Virgin Money, we take things much further than ‘doing the right thing’ by ‘Doing the red thing’. Doing the red thing is what we call our Board approved Colleague Code of Conduct and it’s the Code we live by to make sure we’re all on the same page as an organisation.
It helps everyone to understand who we are, what we stand for (and what we won’t), how we behave and most importantly – how everything fits into our purpose of Making you about happier money.
Together with our broader policy suite and our Great Leadership Framework, the Colleague Code of Conduct ensures we operate ethically in all that we do to ensure we deliver good outcomes for everyone we support.
All new colleagues are required to sign up to the high standards of our Code of Conduct and existing colleagues re-attest each year as part of our Mandatory Learning Plans.
Mandatory Compliance Learning
All colleagues are required to complete annual, mandatory training courses, covering four key themes as part of their learning plans.
|Colleagues & Culture
|I can be me
Health & Wellbeing
Code of Conduct (Doing the Red Thing)
|Data & Information
|Data Protection & Privacy
Be Cyber Smart
|Risks in Banking
|Financial Crime Conflicts of Interest
Preventing Market Abuse
Handling Complaints at Virgin Money
Customers with Vulnerabilities
Freedom of Association and Collective Bargaining
We recognise our colleagues’ right to join an independent trade union and take steps to ensure that no colleague suffers a detriment as a result of being a member of any trade union.
Virgin Money formally recognises Unite the Union and has an established Recognition and Procedural Agreement in place for collective bargaining purposes.
Supplier Code of Conduct
The Group has a Supplier Code of Conduct – this clearly sets out the standards of responsibility and ethical conduct we expect from all suppliers who work with us.