STRATEGIC REPORT
FINANCIAL STATEMENTS
Governance
Performance conditions and targets applying to the 2022 LTIP awards
Condition
Weighting
Target
Vesting
Underlying organic capital generation
25%
Below £90m
0%
Threshold: £90m 25% Between threshold and maximum Between 25% and 100% on a straight-line basis Maximum: £130m 100%
Relative TSR vs FTSE 250
30%
Below median
0%
Median
25%
Between median and upper quartile
Between 25% and 100% on a straight-line basis
Upper quartile or above
100%
Return on equity
35%
Below 8% p.a.
0%
Threshold: 8% p.a. 25% Between threshold and maximum Between 25% and 100% on a straight-line basis Maximum: 12% p.a. or above 100%
ESG – investment into sustainable assets over the 3 year period
10%
Below £300m Threshold £300
0%
25% Between threshold and maximum Between 25% and 100% on a straight-line basis Maximum: £750m 100%
DIRECTORS’ BENEFICIAL SHAREHOLDINGS (AUDITED) To align the interests of the Executive Directors with shareholders, each Executive Director must build up and maintain a shareholding in the Group equivalent to 200% of base salary, in line with the Policy. Until the guideline is met, Executive Directors are required to retain 50% of any LTIP and DSBP share awards that vest (and are exercised), net of tax and national insurance contributions (“NICs”). Details of the Directors’ interests in shares of the Company are shown in the table below. Beneficially owned shares include shares owned outright by the Directors and their connected persons. For the purpose of calculating whether the shareholding guideline has been met, awards vested but not exercised and awards unvested under the DSBP (detailed in the Directors’ outstanding incentive scheme interests section following), net of tax and NIC, are included.
Interest in share awards – not subject to performance conditions
Interest in share awards – subject to performance conditions
Shareholding guideline met 1 (% of salary)
Shareholding guideline (% of salary)
Interest in share awards – vested but unexercised
Beneficially owned shares at 31 December 2022
Director
David Richardson 2
1,399,276 577,629 36,754 130,000 59,000
4,059,702 2,700,460
1,156,649
– – – – – – – – – – –
200% 200%
226% 149%
651,970
Andy Parsons 3 Paul Bishop Ian Cormack
– – – – – – – – –
– – – – – – – – –
n/a n/a n/a n/a n/a n/a n/a n/a n/a
n/a n/a n/a n/a n/a n/a n/a n/a n/a
Michelle Cracknell John Hastings-Bass
210,200
61,715
Mary Kerrigan 4 Steve Melcher 5 Mary Phibbs 6 Kalpana Shah
154,439
– –
20,000
Clare Spottiswoode 7
1 Based on the average closing price of £0.6850 between 1 October 2022 and 31 December 2022. 2 334,172 of David Richardson’s shares owned outright were financed by way of a company loan, of which £420k was outstanding as at 31 December 2022. This loan accrues interest at 4% p.a. and will be repaid out of any sale proceeds on such shares. To the extent a shortfall remains, the Company will write off the balance and settle any taxes due on a grossed-up basis. 3 Andy Parsons has not yet met the shareholding guideline of 200% with a current holding of 149%. Until this is met, he retains 50% of any LTIP or DBSP awards, net of tax, and NICs. 4 Mary Kerrigan was appointed to the Board on 1 February 2022 and her interests are shown at the date of appointment and at the date of signing the accounts. 5 Steve Melcher retired from the Board with effect from 31 December 2022. His share interest shown is as at the end of his appointment. 6 Mary Phibbs was appointed to the Board on 5 January 2023. 7 Clare Spottiswoode stepped down from the Board with effect from 10 May 2022. Her share interest shown is as at the end of her appointment. There have been no changes in the Directors’ interests in shares in the Company between the end of the 2022 financial year and the date of this Annual Report.
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