Brooks Macdonald has argued most shareholders are supportive of its long-term incentive plan even after 41.3% of shareholders vote against it, instead saying investors are just concerned about dilution of shareholdings.
The resolution on the long-term incentive plan was the most divisive issue at the wealth manager’s annual general meeting on 31 October, with all remaining resolutions passing with at least 97% of the vote.
In a regulatory filing on the AGM results, the board acknowledged a significant number of votes were against the LTIP. However, it said: “Based on the AGM vote and the board’s prior engagement with shareholders, it is clear that most shareholders are supportive of the new plan but some were concerned about the implications for dilution.”
OPERATING MARGIN INTRODUCED AS PERFORMANCE METRIC
Under the changes, a minimum shareholding requirement will be introduced for executive directors, which will be 200% of the base salary for chief executive Caroline Connellan and 150% for other executives.
Each year, executive directors will be considered for a conditional award of shares up to 50% of base salary. Awards will vest after three years at which point executives must hold shares for an additional two years.
The wealth manager is also reducing the weighting of non-financial performance metrics for considering remuneration, including strategy delivery, client service, risk management, people and leadership. This will initially reduce from 40% to 30% in the current financial year.
In contrast, operating margin will be introduced as an additional important metric alongside profit and funds under management growth. The board said this better aligned executive remuneration with the interests of shareholders.
– This article first appeared on ESG Clarity‘s sister site Portfolio Adviser.