Johnson Service Regulatory News (JSG)

20 September 2021

AIM: JSG

Johnson Service Group PLC (the 'Company' or the 'Group')

NOTIFICATION OF TRANSACTIONS OF DIRECTORS/PERSONS DISCHARGING MANAGERIAL RESPONSIBILITY AND CONNECTED PERSONS

Targets for Long-Term Incentive Plan Awards Granted in 2021

and 2021 Annual Bonus Target

As announced on 22 March 2021, the Company granted nil cost options over ordinary shares of 10 pence each in the Company under the Johnson Service Group 2018 Long-Term Incentive Plan (the '2021 LTIP Award'). The number of options granted to each of the Executive Directors was as follows:

The above options may be exercised on or after 22 March 2024, subject to the satisfaction of performance conditions over the three financial years ending 31 December 2023.

As disclosed in the 22 March 2021 announcement and in the 2020 Directors' Remuneration Report, the Remuneration Committee (the 'Committee') felt it was unlikely that it would be able to set meaningful but stretching three-year targets for the 2021 LTIP Award at the grant date, given the significant Covid-related uncertainty in the wider economic environment. In a departure from its normal practice, and in line with guidance published by the Investment Association, the Committee agreed to defer the setting of targets in relation to the 2021 LTIP Award for a period of not later than six months from the grant date, at which point the Committee would give full consideration to the performance of the Group. Similarly, the Committee also agreed to defer the setting of any annual bonus targets until later in the year. The Board is pleased to announce that the Committee have now concluded their discussions and have agreed on targets.

Performance Conditions and Vesting

In determining the performance conditions, the Committee has taken into account the Group's business plan as well as the outlook for the sector, general macroeconomic conditions and the range of analysts' consensus forecasts for the financial year ending 31 December 2023. Following careful consideration, the Committee has agreed to retain two separate performance targets. The specific performance conditions are set out below.

Total Shareholder Return

50 per cent of the 2021 LTIP Award will vest by reference to the annualised growth in the Company's net return index ('TSR') over the performance period relative to the annualised growth in the FTSE AIM All-Share Industrial Goods and Services net return index (the 'Index') over the performance period. None of this element of the 2021 LTIP Award will vest if the TSR growth is less than the Index growth, one quarter will vest if the TSR growth is equal to the Index growth and the whole of this element of the 2021 LTIP Award will vest if the TSR growth is at least seven per cent above the Index growth. Vesting will be on a straight-line basis between these points. This performance target is the same as for previous awards.

Earnings per Share

The remaining 50 per cent of the 2021 LTIP Award will vest by reference to the Company's adjusted fully diluted earnings per share from continuing operations ('EPS') as at 31 December 2023. The figure will be further adjusted to exclude any impact on EPS of the capital allowances super-deduction, which offers 130% first-year relief on qualifying main rate plant and machinery investments until 31 March 2023. None of this element of the 2021 LTIP Award will vest if EPS is less than 9.45 pence, one quarter will vest if EPS is equal to 9.45 pence and the whole of this element of the 2021 LTIP Award will vest if EPS is 10.5 pence or greater. Vesting will be on a straight-line basis if EPS is between 9.45 pence and 10.5 pence.

Further Holding Period

The 2021 LTIP Award is subject to an additional holding period of two years from the date on which the 2021 LTIP Award vests (the 'Holding Period'). During the Holding Period, the 2021 LTIP Award holder may not normally dispose of any of the shares which vest except to cover any income tax or social security contributions arising on the exercise of the 2021 LTIP Award.

2021 Annual Bonus

As disclosed in the 2020 Directors' Remuneration Report, the maximum annual bonus amount payable to each of the Chief Executive Officer and the Chief Financial Officer is 125% and 110%, respectively, of base salary.

In previous years, targets have been based on the Group's adjusted profit before taxation result. Following careful consideration, the Committee has agreed that whilst such a performance target remained relevant, it should only be based on the financial result for the second half of the year. Accordingly, the maximum amount payable to each of the Chief Executive Officer and the Chief Financial Officer in respect of 2021 will be reduced by half.

Malus, Clawback and Committee Discretion

In line with its Remuneration Policy, the Committee can apply malus and clawback provisions to each of the 2021 LTIP Award and the 2021 Annual Bonus and has discretion to vary formulaic outturns where they do not reflect underlying performance or are inappropriate in the context of unexpected or unforeseen circumstances.

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