Liontrust is planning to ramp up its long-term incentive plan for CEO John Ions (pictured) and the rest of the asset manager’s executive directors.
Shareholders will vote on plans to raise the level of awards under the Long-Term Incentive Plan (LTIP) by a fifth from 250% of fixed pay to 300%.
Ions was paid £2.2m in the year ended 31 March 2018, up from £1.7m the previous year. His fixed pay was £387,000.
In a regulatory filing published on Thursday, George Yeandle, chairman of the remuneration committee, told shareholders the increased awards were in line with packages offered at comparable asset managers.
The increase in LTIP awards are part of a suite of changes to executive remuneration at the £11.4bn asset manager.
A general meeting to vote on the policy will be held on 25 September. Shareholders last voted on executive remuneration in 2016, when 96% voted in favour of the package.
Yeandle said the remuneration committee has already consulted with major shareholders.
He said the policy changes aim to be market competitive in order to motivate, aid staff retention, improve individual and corporate performance and align staff behaviour with the interests of shareholders.
Pension entitlements and fixed pay hit
The changes also see executive directors face a reduction in their pension entitlements from 15% of fixed pay to 10%, in line with other employees in the business. The change is in line with changes to the UK Corporate Governance Code, Yeandle said.
The proposed policy also states increases in executive pay should generally be line with raises across the business, although it sets out circumstances under which larger increases or above median salaries might be acceptable.
For example, an executive who is “very experienced and has a long track record of proven performance” could be paid in the upper quartile of comparable asset managers.
Further changes to the Liontrust LTIP
The remuneration committee proposed further changes to the LTIP, beyond raising the level of awards in relation to fixed pay.
In accordance with best practice, the percentage that is vested when threshold performance is met will be halved from 20% to 10%. The shareholding requirement of the vesting schedule will increase from 250% to 400% of fixed pay and the post-vesting period will change to a two-year holding period. It is currently staggered.
Due to the asset manager’s growing scale, relative total shareholder return will be a consideration in executive performance under the LTIP. Current measures are absolute TSR, earnings per share and strategic goals.
