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4. Financial management

A values-led, co-owner-first framework for financial decision-making and governance at Torchbox

4.1 Financial transparency and accountability**

Understanding our financial journey helps us grow together as co-owners.

4.1.1 The SLT will share quarterly updates on our financial position, including performance, expenditure, and forward-looking plans.

4.1.2 Financial targets for the year will be set by the SLT and shared with all co-owners as part of the annual planning process.

4.1.3 The Trust Board may request additional information or context where needed, and this will be shared except in exceptional, extenuating circumstances such as confidentiality issues.

4.2 Profit share**

Success should be shared fairly and transparently across the business.

4.2.1 Each year, we allocate the profit between co-owner rewards, business investments, charitable donations, and Voice Group expenditures. This breakdown is published in the annual financial report shared with all co-owners.

4.2.2 Profit is shared proportionally to salary, so all co-owners receive the same percentage of their pay.

4.2.3 The Trust Board signs off on each quarterly profit share. If there is insufficient profit, no profit share may be issued for that quarter.

4.2.4 All co-owners are eligible for a profit share, including part-time staff and those on maternity or other types of leave, except for the following exclusions.

4.2.4.1 Co-owners serving notice during the relevant quarter do not receive a profit share.

4.2.4.2 Co-owners on a formal performance improvement plan (PIP) when the profit share is paid do not receive that quarter's profit share.

4.2.4.3 The Trustee Directors will review the profit-sharing distribution model annually.

4.3 Co-owner bonus

Distinct from profit share, the tax-efficient co-owner bonus goes to all co-owners who meet the eligibility criteria

4.3.1 The co-owner bonus is a tax-efficient, quarterly payment of up to £3,600 per year (the current HMRC limit for employee-owned companies), distributed in four instalments.

4.3.2 Part-time staff and those on parental or other types of leave (excluding unpaid leave) are still eligible to receive the bonus.

4.3.3 Bonus payments are made on a four-month arrears schedule to align with the tax year and ensure compliance with the annual exemption.

4.3.4 Co-owners earning above a specified pre-tax income threshold will receive the full £3,600 co-owner bonus. The income threshold is defined on the intranet Co-owner bonus policy page. Co-owners earning below the income threshold will receive a pro-rated equivalent part of the £3,600 co-owner bonus, where income of £0 would receive 0% of the £3,600 bonus, and income of half the threshold would receive 50% of the £3,600 bonus.

4.3.5 Co-owners must be paid a salary during the month in which the bonus is paid to receive the bonus. If they have left the company before this point, they will not receive the bonus for that period.

4.4 Financial sustainability and investment**

Investment protects Torchbox's future, even when that means reducing short-term rewards.

4.4.1 We prioritise long-term sustainability over short-term financial gains, investing in the long-term health of the company over profit share.

4.4.2 Torchbox is financially prudent, maintaining financial cover for 6 months of operating expenses, at least three months of which is always held in cash rather than outstanding invoices.

4.4.3 If needed, the SLT may propose reducing or deferring profit share to allow for strategic investment. Any such decision must be approved by the Trust Board.

4.5 Fair compensation**

Everyone deserves to be paid fairly.

4.5.1 Salary bands are reviewed annually through an internal benchmarking exercise assessing fairness including gender pay gap, inflation, ease of recruitment, and external market data. The findings are shared with all co-owners.

4.5.2 No co-owner will earn less than the real [Living Wage]{.underline} or the equivalent in their country of residence.

4.5.3 We provide enhanced policies beyond statutory minimums, including in areas such as maternity and paternity leave, sickness, and redundancy, which are reviewed periodically to ensure they remain appropriate and effective.

4.5.4 The Annual Pay review has an inflation-linked component - awarded to all co-owners - and a discretionary component for further individual pay rises. If the SLT's proposed inflation-linked component is less or more than the UK Consumer Prices Index, it requires agreement with the Trustees.

4.5.5 Co-owners on a formal personal improvement plan (PIP) are not eligible for pay rises. From the time they come off the PIP, they will automatically get the inflation-linked component of that year's pay rise, which will be included in their next month's pay.

4.5.6 We listen to co-owner feedback when evaluating our approach to compensation.

4.6 SLT pay**

Leadership rewards must reflect performance and responsibility, not just seniority.

4.6.1 SLT and Company Board remuneration must reflect performance, contribution, and business responsibility.

4.6.2 Remuneration for SLT and the Company Board is overseen by a Remuneration Committee that provides independent oversight on behalf of the EOT. The committee meets annually to consider the CEO's compensation plans for the SLT. The committee is comprised of:

  • One Employee Trustee Director

And at least two of:

  • A Non-Executive Director (NED)

  • An independent advisor with expertise in director pay and governance

  • The Independent Trustee

The Trustees are responsible for appointing the independent advisor.

4.6.3 SLT and Board of Directors pay and bonuses must reflect a balanced view of performance across commercial outcomes, co-owner wellbeing, and the company's resilience and evolution.

4.6.4 The Remuneration Committee will make the final decision.

4.7 Pay for International Associates**

We aim for an approach that ensures equitable treatment while recognising the unique considerations of international engagements:

  • Pay is based on UK salary bands for consistency across Torchbox

  • Adjustments are made for local economic and cost-of-living conditions

  • Compensation reflects the total value proposition

  • Annual reviews ensure ongoing fairness and alignment with organisational changes

More details are available on the intranet.