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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.

  2. 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.

  3. 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

  4. 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.

  5. 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

  6. 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.

  7. 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.

  8. 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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