Shareholder discontent delivers blow to Assetco bonus scheme

The long-term incentive plan would have resulted in greater dilution of shares

Martin Gilbert Assetco
Martin Gilbert


Assetco has decided to scrap its long-term incentive plan (LTIP), 10 months after its remuneration committee launched a review.

The Martin Gilbert-backed (pictured) firm said the LTIP will be honoured for the “first performance period” – 8 January 2021 to 30 September 2021 – but, following the review and consultation with advisers and shareholders, the Assetco board has agreed it should be cancelled for subsequent performance periods.

That does not mean the end of incentive and bonus schemes at the company, however, as Assetco added that it will “take time to consult with its advisers and shareholders in terms of appropriate schemes/arrangements to replace the LTIP”.

Shareholders have become increasingly vocal in recent years about director and senior manager pay and bonuses. Last November, Close Brothers faced a revolt over plans to nearly double its CEO’s pay.

In February, pay hikes for top Liontrust bosses squeaked past a nail-biting shareholder vote, with the company later looking at linking remuneration to ESG.

In April, M&G’s former finance chief had her bonus chopped ahead of the firm’s AGM.

Deferred shares and lock-ins

The Assetco LTIP was set up as a five-year plan, with 993,315 ordinary shares – worth 10 pence each – to be paid out to participants in three tranches.

The first tranche of 331,000 ordinary shares was due for release in December 2021, with the remaining 662,205 to be paid out over the following years.

No ordinary shares had been released prior to Assetco board’s announcement, confirming the LTIP was to be scrapped, on 5 July.

As a consequence of the cancellation, the remuneration committee has accelerated the release of the ordinary shares which were due to be paid over the deferral period, subject to lock-in arrangements.

A net total of 518,909 ordinary shares, of which 345,935 are deferred ordinary shares, were issued to participants in the plan.

“This represents a significant reduction in the dilution to shareholders that would have resulted in the event that the total of 993,315 ordinary shares had been issued,” Assetco said.

Shares have been issued to Gilbert (160,920) and fellow directors Peter McKellar (126,029) and Campbell Fleming (61,685).

The LTIP participants have entered into lock-in arrangements where they will be restricted from disposing of their deferred ordinary shares.

An application has been made to the London Stock Exchange for the 518,909 new ordinary shares to be admitted to training on Aim, which is expected on or around 8 July.

Following this, Assetco’s issued share capital will consist of 14,918,229 ordinary shares.

The company’s share price ended the day on 5 July at £8.25 but was down 3.6% at £7.95 at the time of writing.

Year-to-date, Assetco’s share price has fallen 48.9%, with the one-year return down 62.8%.



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