47 ■ The Company’s international focus  and operation; ■ The general external environment and  context for executive pay; and ■ The pay and employment practices of Dialog  employees generally. ■ UK FTSE 250 companies of similar market  capitalisation to the Company (taking 20  above and 20 below based on the sterling  equivalent of the Company’s market  capitalisation); and ■ An industry peer group, covering Europe,  North America and Asia. This group is diverse  both in terms of headquarters and financial  scale but reflects the reality of the Company’s  talent acquisition challenges. perspective, but recognises that as a UK  incorporated company, UK comparisons are considered important by Shareholders. The Committee has determined that the pay  policy for the CEO should set fixed pay at the  median level when compared to a range of  peers with total remuneration within the upper  quartile when superior performance is achieved. Benchmarking the CEO remuneration is not  straightforward. The Company is not UK listed,  and operates in a multinational sector, with few UK comparators. This year, the Committee  reviewed the CEO’s remuneration against two  peer groups: As noted above, the Committee believes it has  an approach to remuneration that remains  appropriate, and appropriately competitive, other  than in one regard. The Committee believes that  the CEO’s base salary is too far below appropriate  market levels to be sustainable. Mindful that any  increase in base salary can have a ratchet effect  on other elements of pay, notably pension and  annual bonus (but not any basic award under  the long-term incentive plan, which is set  without reference to salary), it believes that  above median inflation increases will be  necessary over the next two to three years in order to bring the CEO closer to market. In assessing the appropriate level, the Committee  will take into account individual and Company  performance and other relevant factors. At this point in time, it does not envisage  making any other changes to the CEO’s  remuneration arrangements during 2013. In reviewing these benchmarks, the Committee  was particularly sensitive to Shareholders’  expectations of executive pay restraint, increases  awarded to the Company’s employees generally  and the level of support for the 2011 Directors’  remuneration report. This year’s review highlighted that at £316,000,  the CEO’s 2011 base salary was the lowest in  the UK benchmark group. However, despite the  continuing strong performance of the Company,  the Committee determined that any increase  would need to be restrained for the reasons set  out above. The CEO was awarded a 5% base  pay increase to an annual salary of £331,800  with effect from July 2012. This increase is in  the median of the pay increases awarded to  all employees. On total remuneration, the CEO would not  achieve upper quartile positioning against the  benchmark group even for superior performance. Against the international sector benchmark  group, base pay was in the lower quartile, but  the Committee recognises that international  comparisons are difficult. The Committee  believes that international comparisons of  remuneration competitiveness are important  from a talent recruitment and retention  The following graphs represent the pay mix  between the elements of remuneration,  assuming target and maximum performance. Elements of remuneration Pay mix and performance Changes currently anticipated for 2013 100 80 60 40 20 0 Maximum performance Target performance Base Bonus LTIs Maximum performance  against target performance  (%) Dialog Semiconductor five-year TSR performance (%) Dialog Semicon. (XTRA: DLG) German TecDAX (Price Return) – Index Philadelphia SE Semiconductor Sector Index Jul 2008 Jan 2009 Jul 2009 Jan 2010 Jul 2010 Jan 2011 Jul 2011 Jan 2012 Jul 2012 Jan 2013 -200 0 200 400 600 800 1,000 1,200 As required, the chart below sets out Dialog’s  five-year TSR.