a) executive directrors are expected to build and maintain a shareholding worth 100% of their basisc salary within 5 years from appointment.
b) for LTIP vestings, directors and senior executives are expected to retain at least 50% of the net number of shares for 3 years
FTSE SMALL CAPsaid
Chief Executive must hold shares of a value of 2x annual base salary, other Executive Directors 1x annual base salary – we are specific in calculating this at the time of acquisition, so if share price falls this does not create a requirement to “top up”. We know this is unusual, but as it is consistent and transparent (and all directors now exceed these levels by a margin anyway), we have had no adverse shareholder comment. NEDs are informally encouraged to hold the equivalent of 1 x annual base fee. No requirement below the main Board. However, to maximise LTIP benefits, all participants must invest proportion of annual bonus in shares which must then be held for a minimum period of 3 years.
FTSE 100said
a) Shareholding requirements are:
CEO 4x base salary Other Executive directors 3x base salary
b) Shareholding requirementys are:
Corporate Executive Team members 2x base salary
FTSE 250said
a) For executive directors, they are expected to accumulate 2x salary within a five year period from their appointment. b) Our insider dealing code states that where shares are bought in the market, they should be held for 12 months, to discourage short-term profit taking. This applies to all directors, PDMR’s and others with access to ‘inside’ information.
FTSE 250said
We operate share ownership guideline for all participants in performance share plans. Those who receive shares through such plans must retain 50% of the net shares received until the guideline is reached, being 100% of salary for executive directors and 50% of salary for others.
FTSE 100said
Currently, we require 1.5x for the CEO, 1.0x for the other ED (CFO) and a rather vague commitment below that. We also require NEDs to have 1.0x their annual base fee. There is no fixed timescale and no clear sanction for what happens if they don’t achieve these levels.
We are in the midst of an institutional consultation and are proposing to move to CEO 3.0x, CFO 2.0x, NED 1.0-1.5x (TBD), Exco and others overseen by RemCo 0.5x. Shares to be amassed over five years from date of appointment/promotion and we will count shares owned and bought with deferred bonus, as well as vested but unexercised options. Sanction for the execs is potentally being forced to defer more than the 50% of annual bonus they must already do.
A few points of detail cropped up in our deliberations: * you are comparing gross (salary multiple) and net (shares bought with after-tax money), which at 50% marginal rate makes a big difference * we decided to use only market value, not historic cost, for the comparative calculation * you can’t include shares subject to performance conditions, since the existence of these shares is only contingent * without teeth this is all rather meaningless, but if enforced too aggressively disincentivises. Enforcement will therefore be done gently (fireside chat, not a roasting) when we get to that point * non-exec requirement caused most debate as they don’t have access to the ‘free’ shares (LTIP etc) that the execs do. * realistically, board members can’t sell their shares, but the obligation may force them into an ill-advised overly-concentrated investment strategy, unless they have significant personal wealth. Is that really what was intended? * below board, people are often at stages of their life when they need access to cash so we can’t be too tough over “you can’t sell until you’ve made the target”.
Hope these rather random thoughts help your own thinking….
FTSE 100said
Within five years of appointment we expect the following holdings to be achieved: –
Chief Executive and Finance Director – 3 time salary Other Executive Directors – twice salary
Other executives are expected to hold between one and two times salary depending on grade.
Failure to meet this requirment is taken into account when determining eligibility for LTIP awards.
FTSE 100said
a) The directors are expected to hold shares to the following values within 5 years of appointment: CEO – 1.5 x salary EDs – 1 x salary NEDs – 1 x fees
b) Those immediately below ED level on Executive Committee (listed as PDMRs and incl. Co Sec) are expected to hold shares at 0.5 x salary within the same time frame.
FTSE SMALL CAPsaid
We introduced shareholding guidelines this year consequent to feedback from shareholders during consultation on a revised remuneration structure. Briefly the requirements are: – exec directors 1.5 x base salary; – other exec PDMR 1.0 x base salary; – NEDs 1.0 x total fees
A few other comments: – holdings for other PDMRs includes deferred bonus shares (ie vesting subject only to time period) whereas all others are wholly unfettered; – time limit to build holding is 3 years; – multiply is reviewed annually against an average share price. It is important to fix how this is done as the value of shares can go down as well as up! – only PDMRs are included as otherwise there is no visibility of ownership; – need to consider sale of vested shares for individuals below target holding.
FTSE 250said
a) The Company encourages Directors to own shares in the Company and executive Directors have a target of a minimum shareholding of 1.5 times their salary, to be built up over a suitable period. The design of the long-term incentive plan element of remuneration packages encourages executive Directors to achieve this goal which aligns their interests with those of shareholders.
b) no.
FTSE 250said
Executive Directores are expected to build up a personal shareholding equal to one years salary over a period of five years. There are no shareholding guidelines below Executive Director level.
FTSE 100said
Only executive directors have a retrion requirement: Chief Exec is 4 times base salary Other execs is 3 times base salary
FTSE 250said
Exec Directors are required to hold 200% of salary in shares, which are accumulated over a 5 year period from appointment. For Executive Committee members, this is 100% of salary over the same period.
FTSE 250said
We do not have a share retention/holding policy
FTSE 100said
a) within five years of appointment exec directors are expected to acquire and maintain a holding of shares with a valus of 2X basic salary, in the case of the CEO, and 1X in the case of any other exec director b)no policy
FTSE 250said
Our executive directors and only them are required to hold shares equal to annual salary.
FTSE 250said
Exec Directors have a share retention policy of a years salary. Below Exec there is no policy
a) executive directrors are expected to build and maintain a shareholding worth 100% of their basisc salary within 5 years from appointment.
b) for LTIP vestings, directors and senior executives are expected to retain at least 50% of the net number of shares for 3 years
Chief Executive must hold shares of a value of 2x annual base salary, other Executive Directors 1x annual base salary – we are specific in calculating this at the time of acquisition, so if share price falls this does not create a requirement to “top up”. We know this is unusual, but as it is consistent and transparent (and all directors now exceed these levels by a margin anyway), we have had no adverse shareholder comment.
NEDs are informally encouraged to hold the equivalent of 1 x annual base fee.
No requirement below the main Board. However, to maximise LTIP benefits, all participants must invest proportion of annual bonus in shares which must then be held for a minimum period of 3 years.
a) Shareholding requirements are:
CEO 4x base salary
Other Executive directors 3x base salary
b) Shareholding requirementys are:
Corporate Executive Team members 2x base salary
a) For executive directors, they are expected to accumulate 2x salary within a five year period from their appointment.
b) Our insider dealing code states that where shares are bought in the market, they should be held for 12 months, to discourage short-term profit taking. This applies to all directors, PDMR’s and others with access to ‘inside’ information.
We operate share ownership guideline for all participants in performance share plans. Those who receive shares through such plans must retain 50% of the net shares received until the guideline is reached, being 100% of salary for executive directors and 50% of salary for others.
Currently, we require 1.5x for the CEO, 1.0x for the other ED (CFO) and a rather vague commitment below that. We also require NEDs to have 1.0x their annual base fee. There is no fixed timescale and no clear sanction for what happens if they don’t achieve these levels.
We are in the midst of an institutional consultation and are proposing to move to CEO 3.0x, CFO 2.0x, NED 1.0-1.5x (TBD), Exco and others overseen by RemCo 0.5x. Shares to be amassed over five years from date of appointment/promotion and we will count shares owned and bought with deferred bonus, as well as vested but unexercised options. Sanction for the execs is potentally being forced to defer more than the 50% of annual bonus they must already do.
A few points of detail cropped up in our deliberations:
* you are comparing gross (salary multiple) and net (shares bought with after-tax money), which at 50% marginal rate makes a big difference
* we decided to use only market value, not historic cost, for the comparative calculation
* you can’t include shares subject to performance conditions, since the existence of these shares is only contingent
* without teeth this is all rather meaningless, but if enforced too aggressively disincentivises. Enforcement will therefore be done gently (fireside chat, not a roasting) when we get to that point
* non-exec requirement caused most debate as they don’t have access to the ‘free’ shares (LTIP etc) that the execs do.
* realistically, board members can’t sell their shares, but the obligation may force them into an ill-advised overly-concentrated investment strategy, unless they have significant personal wealth. Is that really what was intended?
* below board, people are often at stages of their life when they need access to cash so we can’t be too tough over “you can’t sell until you’ve made the target”.
Hope these rather random thoughts help your own thinking….
Within five years of appointment we expect the following holdings to be achieved: –
Chief Executive and Finance Director – 3 time salary
Other Executive Directors – twice salary
Other executives are expected to hold between one and two times salary depending on grade.
Failure to meet this requirment is taken into account when determining eligibility for LTIP awards.
a) The directors are expected to hold shares to the following values within 5 years of appointment:
CEO – 1.5 x salary
EDs – 1 x salary
NEDs – 1 x fees
b) Those immediately below ED level on Executive Committee (listed as PDMRs and incl. Co Sec) are expected to hold shares at 0.5 x salary within the same time frame.
We introduced shareholding guidelines this year consequent to feedback from shareholders during consultation on a revised remuneration structure. Briefly the requirements are:
– exec directors 1.5 x base salary;
– other exec PDMR 1.0 x base salary;
– NEDs 1.0 x total fees
A few other comments:
– holdings for other PDMRs includes deferred bonus shares (ie vesting subject only to time period) whereas all others are wholly unfettered;
– time limit to build holding is 3 years;
– multiply is reviewed annually against an average share price. It is important to fix how this is done as the value of shares can go down as well as up!
– only PDMRs are included as otherwise there is no visibility of ownership;
– need to consider sale of vested shares for individuals below target holding.
a) The Company encourages Directors to own shares in the Company and executive Directors have a target of a minimum shareholding of 1.5 times their salary, to be built up over a suitable period. The design of the long-term incentive plan element of remuneration packages encourages executive Directors to achieve this goal which aligns their interests with those of shareholders.
b) no.
Executive Directores are expected to build up a personal shareholding equal to one years salary over a period of five years. There are no shareholding guidelines below Executive Director level.
Only executive directors have a retrion requirement:
Chief Exec is 4 times base salary
Other execs is 3 times base salary
Exec Directors are required to hold 200% of salary in shares, which are accumulated over a 5 year period from appointment. For Executive Committee members, this is 100% of salary over the same period.
We do not have a share retention/holding policy
a) within five years of appointment exec directors are expected to acquire and maintain a holding of shares with a valus of 2X basic salary, in the case of the CEO, and 1X in the case of any other exec director
b)no policy
Our executive directors and only them are required to hold shares equal to annual salary.
Exec Directors have a share retention policy of a years salary. Below Exec there is no policy