Expert Corporate Governance Service (ECGS)
EUR 500.00 For Business Accounts Only

GB Group PLC, 25 July 2019

Contrary to UK market practice, the Company does not have annual elections of directors. Elections are staggered and only two directors are standing in the current year. There are concerns over the composition of the Board. The Chairman, Mr. Rasche, undertakes some general and operational consultancy for the business through his consultancy business Rasche Consulting Ltd, for which he is given expenses by the Company. Furthermore, 50% of the Board are executives and only 33% are independent. There is insufficient independent representation on the Board.

Item 5: Approve the Remuneration Report The structure is generally acceptable. The main concern with pay at the Company is that it is overly reliant on EPS. Basing incentive pay on EPS is not considered appropriate as the metric can potentially be directly manipulated by executives, which is even more of a concern given that both the STI and the LTI are almost entirely determined by this metric. EPS can be positively influenced through share buybacks, fluctuations in foreign exchange, or amendments made to accounting rules & regulations. Performance is not measured against a peer group or other relevant benchmarks. We recommend shareholders oppose.

Item 6: To re-appoint as auditors, Ernst & Young LLP The auditor's tenure exceeds our tenure limit of 10 years. Ernst & Young LLP has served as the Companyns external auditor since 1995. The Company has conducted during the financial year an audit tender, but they have proposed the re-appointment of Ernst & Young. Both annual and three-year aggregate non-audit fees exceed guidelines. Given that the auditor's tenure exceeds the limits set out in our guidelines and non-audit fees are considered excessive and may undermine auditor independence, we recommend that shareholders oppose this resolution.

GB Group PLC

GB Group is engaged in the provision of identity data intelligence services. Co. has two operating segments: Identity Proofing, which provides electronic ID Verification services for combating ID fraud, money laundering and under-age gambling, ID Employ & Comply services for employee authentication and screening, and ID Fraud & Risk Management services; as well as Identity Solutions, which provides ID Registration, ID Engage and ID Trace & Investigate software and services that provide consumer information and facilitate understanding, targeting and retention of profitable consumers. Between them, the segments have six complementary lines of business including ID Verification and ID Engage.


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Expert Corporate Governance Service (ECGS)

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