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Do you have a NED shareholding requirement?

16th June 2020 8 Comments

A EX LISTED Company Secretary writes...

Does your company Board set any requirement for NEDs to hold shares in the company?  Is there a minimum or maximum limit – and if so, how is this number determined?

 

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Comments

  1. FTSE250 said

    18th June 2020 at 11:27 am

    No, we have no NED shareholding requirement but exploring about putting in place a monthly share purchase plan which NEDs could join.

    • FTSE250 said

      17th June 2020 at 1:00 pm

      We have no policy around NED shareholding requirements – they are encouraged to build a small holding – and usually do. The holdings tend to remain modest.

      • FTSE SMALL CAP said

        17th June 2020 at 10:22 am

        We do not have a formal policy but it is generally encouraged by the chairman and is typically around the £10k to £20k level

        • FTSE100 said

          17th June 2020 at 9:44 am

          We require our NEDs to use a portion of their fees to purchase shares. A post tax and NI amount is deducted on a monthly basis and shares purchased once a year. These shares are held in a nominee and the NED is not permitted to sell them during their tenure. Current requirement is £10k per annum with a higher amount for the Chair.

          Notwithstanding this requirement we often find the NEDs feel they should and indeed do invest more in the company.

          • FTSE250 said

            17th June 2020 at 9:43 am

            No formal requirement but there is an “understanding” they should be shareholders. Level of investment low – usually around £10k – £15k vs £50kpa fees

            • FTSE250 said

              17th June 2020 at 9:39 am

              This is unusual and entirely voluntary. We do not currently have a requirement and neither did the previous business I worked for. Clearly NEDs having a small holding is seen positively but anything substantial can attract questions about independence.

              • FTSE SMALL CAP said

                17th June 2020 at 9:33 am

                Our NEDs need to hold a minimum of 50% of the value of their annual salary by the third anniversary of their appointment.
                I was previously at a FTSE 100 where there were no requirements at all.

                • FTSE250 said

                  17th June 2020 at 9:22 am

                  We do but our NEDs volunteered for it when we were reviewing our policy. I believe it’s still relatively unusual.

                  We recently recruited a French national onto our Board as a NED and he was pretty shocked!

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