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## Remuneration Policy 

The Remuneration Committee’s  approach to remunera- tion is to make sure that CRH’s pay structures are fair, responsible and competitive, in order that CRH can attract and retain staff of the calibre necessary for it to compete in all of its markets. When setting remuneration policy for executive Directors, the Remuneration Committee  review and have regard to the remuneration trends across the Group. 

The Group’s remuneration structures are designed to drive performance and link rewards to responsibility and the individual contribution of executives. It is policy to grant participation in the Group’s performance-related plans to key management to encourage identification with shareholders’ interests and to create a community of interest among different regions and nationalities. 

The purpose of this report is to: 

– set out the Group’s remuneration policy; 

– explain the purpose and link of each component of remuneration to the Group’s strategy; 

– outline the factors taken into account in salary reviews; 

– provide details in relation to the structure of the Group’s annual and share incentive plans. 

The report contains details of awards made to executive Directors under the Group’s share incentive plans and the level of vesting where relevant. Total remuneration paid to each Director in 2012, including the value of vested share awards, is set out on page 61. 

The policy on Directors’ remuneration, which is derived from the overall Group policy, is designed to: 

– help attract and retain Directors of the highest calibre who can bring their experience and independent views to the policy, strategic decisions and governance of CRH; 

– properly reward and motivate executive Directors to perform in the long-term interest of the shareholders; 

– provide an appropriate blend of fixed and variable remuneration and short and long-term incentives for executive Directors; 

– complement CRH’s strategy of fostering entrepreneurship in its regional companies by rewarding the creation of shareholder value through organic and acquisitive growth; 

– reflect the spread of the Group’s operations so that remuneration packages in each geographical area are appropriate and competitive for that area; 

## AGM Votes on Report on Directors’ Remuneration 

– reflect the risk policies of the Group. 

The Remuneration Committee  has clawback arrange- ments in place. 

The  Remuneration Committee  has adopted a policy whereby executives are required to build-up (and maintain), within five years of appointment, a minimum holding in CRH shares which is equivalent to one times basic salary. For existing executive Directors this level must be achieved by 31 December 2015. The current shareholding levels as a multiple of basic salary are shown on page 61. 

In setting remuneration levels, the Remuneration Committee  takes into consideration the remuneration practices of other international companies of similar size and scope and trends in executive remuneration generally in each of the regions in which the Company operates. The Remuneration Committee  also takes into account the EU Commission’s recommendations on remuneration in listed companies. 

CRH actively engages with shareholders in relation to the design of share plans and the Remuneration Committee takes into account shareholder views generally regarding remuneration levels. In addition, the Remuneration Committee believes that shareholders are entitled to have an annual “say on pay” and, accordingly, although not required under Irish company law, the Report on Directors’ Remuneration has been presented to shareholders at Annual General Meetings since 2010 for the purposes of an advisory vote. The votes cast on the Report on Directors’ Remuneration are set out in the table below. 

## Remuneration Consultants 

The Remuneration Committee receives advice from Mercer, a leading compensation and benefit consultant. Mercer also provides actuarial advice to the Group and they are actuaries and investment advisers to a number of the Group’s pension schemes. 

## Risk Policies and Systems 

The Chairman of the Remuneration Committee  meets with the Audit Committee annually to review the Group’s remuneration structures and to ensure they are in line with its risk policies and systems. 

## Executive Directors’ Remuneration 

The typical elements of the remuneration package for executive Directors are set out in the table opposite. Each component is also outlined in detail on pages 58 to 60. 

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