Directors' remuneration report

Information contained in sections and figures marked β has been audited.

The role of the Remuneration Committee

The Remuneration Committee's role is to set the remuneration policy for executive directors and other senior executives and to ensure that they are fairly rewarded for their individual contributions to Group performance, having due regard for the interests of shareholders, the financial and commercial health of the Group and pay and conditions throughout the Group. It is also the role of the Committee to ensure that the Group's remuneration policies remain competitive.

All members of the Committee are independent without any personal financial interest (other than as shareholders) in matters decided by the Committee, other than Sir Malcolm Williamson who takes no part in any discussion relating to his own remuneration. No executive director or senior manager is involved in determining their own remuneration.

The Remuneration Committee sets the remuneration of the Chairman of the Board and of the Group Chief Executive. The remuneration of the other executive directors and the Group Company Secretary is set based on recommendations made by the Group Chief Executive after consultation with the Chairman. The Committee also monitors the remuneration of certain other senior executives and sets performance targets. Where executive directors are involved in assisting the Remuneration Committee, care is taken to recognise and avoid possible conflicts of interest.

The Remuneration Committee regularly uses external professional advice and makes use of competitive market surveys conducted independently in both the US, where more than 70% of sales and profit are generated, as well as in the UK. The Committee has retained Towers Perrin as advisers and they are not retained by the Group in any other capacity. Advice on legal aspects of remuneration is provided by Herbert Smith LLP (in the UK) and Weil, Gotshal & Manges (in the US). These firms also provide general legal advice to Signet.

The remuneration of the non-executive directors is not within the remit of the Remuneration Committee. This is determined by the Chairman and the executive members of the Board after consideration of, among other factors, external comparisons, the time commitment and the responsibilities of the non-executive directors. The Remuneration Committee consists of Robert Blanchard (Chairman), Robert Walker, Russell Walls (until 3 March 2008), Dale Hilpert (with effect from 3 March 2008), Lesley Knox (with effect from 6 May 2008) and Sir Malcolm Williamson. The Committee met eight times during 2007/08 with full attendance at all meetings.

The Remuneration Committee's terms of reference are available on request from the Group Company Secretary and on the Group's website.

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