REG - Phoenix Grp Hldgs - Phoenix Group Holdings - 2014 Annual Results <Origin Href="QuoteRef">PHNX.L</Origin> - Part 6
18/03/2015 07:01
- Part 6: For the preceding part double click ID:nRSR7166He
LTIP 23 August 2012 485p 169,194 - - - - 169,194 23 August 2015
LTIP 15 November 2013 712p 112,359 - - - - 112,359 15 November 2016
LTIP6 26 March 2014 741.5p - 118,678 - - - 118,678 26 March 2017
281,553 118,678 - - - 400,231
The options awarded under the LTIP are awarded as nil cost options.
1 In addition to the shares awarded under the LTIP, participants receive an additional number of shares (based on the
number of LTIP awards which actually vest) to reflect the dividends paid during the vesting period (and which for awards
made from 2015, will include dividends paid during any applicable holding period).
2 Gains of Directors from share options exercised under the LTIP in 2014 were £1,295,305 (2013: £nil). The share price on
date of exercise (29 August 2014) was £7.41.
3 The 2011 LTIP award vested at 67%. The LTIP performance conditions were fully met (MCEV growth in excess of the
risk-free rate by 6% per annum; Cumulative cash generation of £1.517bn or more) over the 3-year performance period to 31
December 2013, although the Group Chief Executive Officer decided to waive voluntarily any entitlement in excess of
two-thirds of the shares which would otherwise have vested.
4 The shares outstanding at the end of the year related to dividend roll-up and were exercised on 7 January 2015.
5 Following the year-end, the Group Chief Executive Officer elected to waive voluntarily his entitlement to any vesting of
the 2012 LTIP in excess of two-thirds of the shares which would otherwise have vested.
6 The face value of awards granted in 2014 represents the maximum vesting of awards (but before any credit for dividends)
and is calculated using a share price of 741.5p being the closing middle market price on the award date, giving £1,399,996
for Clive Bannister and £879,997 for James McConville. The vesting percentage at threshold performance (2014 awards) is
25%.
The performance conditions for the 2012, 2013 and 2014 awards are set out below including adjustment for the sale of Ignis
to ensure that the targets remained as stretching as before the sale:
Performance measure 2012 award (40% MCEV growth, 2013 award (40% MCEV growth, 2014 award (40% MCEV growth,
40% Cumulative cash generation and 20% TSR) 40% Cumulative cash generation and 20% TSR) 40% Cumulative cash generation and 20% TSR)
MCEV growth125% of this part vests at threshold performance rising on a pro rata basis until 100% vests. Measured over 3 Target range between MCEV growth in excess of the risk-free rate by 3% per annum and MCEV growth in excess of the risk-free rate by 6% per annum. Target range as for 2012, except the threshold is 4%.As the 2013 rights issue was known before the date of award, the base MCEV for 2013's award increased by £211m. Target range as for 2013.For this award, an additional £50m was added to the base MCEV figure to increase the level of challenge.
financial years commencing with the year of award.
Cumulative cash generation225% of this part vests at threshold performance rising on a pro rata basis until 100% vests.Measured Target range of £1.307bn to £1.807bn (£1.330bn to £1.830bn before adjustment). Target range of £1.277bn to £1.477bn (£1.329bn to £1.529bn before adjustment). Target range of £1.348bn to £1.548bn (£1.416bn to £1.616bn before adjustment).
over 3 financial years commencing with the year of award.
TSR325% of this part vests at threshold performance rising on a pro rata basis until 100% vests. In addition, the Committee must Target range between median performance against the constituents of the FTSE 250 (excluding Investment Trusts) rising on a pro rata basis until full vesting for upper quintile performance. Target range as for 2012. Target range as for 2012.
consider whether the TSR performance is reflective of the underlying financial performance of the Company.
Underpin: Notwithstanding the MCEV growth, Cumulative cash generation and TSR performance targets, if the Committee determines
that the Group's debt levels and associated interest costs have not remained within parameters acceptable to the Committee over
the performance period, and that the Group has not made progress considered to be reasonable by it in executing any strategy
agreed by the Board on debt management and capital structuring (and for 2013 onwards, risk management), the level of awards
vesting will either be reduced or lapse in full.
As noted in the section describing the Implementation of Remuneration Policy in 2015, LTIP awards to be made in 2015 will
be subject to performance measures similar to those described in the table above, and the exact performance targets will be
determined by the Committee shortly before the awards are made.
1 The MCEV growth targets included a 5x EBITDA element for the value of Ignis. Given the sale of Ignis during the
performance period and that best practice is to exclude transactional benefits, the actual sale proceeds were substituted
(less refinancing costs). This had a very modest impact on the base year MCEV figures used for the targets: 2012 (£12
million), 2013 (£3 million), 2014 (£26 million).
2 Following the sale of Ignis, the Cumulative cash generation targets have been reduced by the originally budgeted
dividend expected in the period from Ignis since the completion date of 1 July 2014. The absolute level of stretch under
the Cumulative cash generation targets remains unchanged and the proceeds from the sale of Ignis are also excluded from the
final calculation. Target ranges for the Cumulative cash generation targets before adjustment for the Ignis disposal are
also shown in the table above for comparison. Cumulative cash generation takes into account a certain level of interest
costs and expenses.
3 For the 2012 awards the TSR performance period commenced on 2 April 2012. For the 2013 award (and future awards) the TSR
performance period was aligned to the period of financial years applying to the two financial measures.
DBSS
Date of grant Share price No. of No. of No. of No. of No. of Vesting
on grant Share Share Share Share Share date
options options options options options
as at granted exercised not vested as at
1 Jan in 2014 31 Dec
2014 2014
Clive Bannister
DBSS 2 April 2012 562.5p 41,452 - - - 41,452 2 April 2015
DBSS 27 March 2013 658.5p 36,748 - - - 36,748 27 March 2016
DBSS1 28 March 2014 652.0p - 34,029 - - 34,029 28 March 2017
78,200 34,029 112,229
James McConville
DBSS 27 March 2013 658.5p 11,999 - - - 11,999 27 March 2016
DBSS1 28 March 2014 652.0p - 20,417 - - 20,417 28 March 2017
11,999 20,417 32,416
1 The face value of awards granted in 2014 is equivalent to 50% of the cash element of the 2013 AIP and is calculated
using a share price of 710.17p, being the average closing market price on the 3 days preceding the award date, giving
£241,664 for Clive Bannister and £144,995 for James McConville.
This is the arrangement pursuant to which one-third of the AIP for any year is deferred into the Company's shares. No
performance conditions apply therefore other than generally being subject to continued employment. In addition to the
shares awarded under the DBSS presented above, at the point of vesting participants receive an additional number of shares
to reflect the dividends paid during the vesting period (or until transfer of shares for DBSS awards made before 2014).
Sharesave Options
No. of Share options as at No. of Share options No. of Share options No. of Shares options No. of share options as at Exercise Exercisable Date of
1 Jan granted in exercised not vested 31 Dec price from expiry
2014 2014 2014
Clive Bannister 1,617 - 1,617 - - £5.581 1 Jun 20142 30 Nov 2014
James McConville 1,607 - - 1,607 £5.60 1 Jun 2016 30 Nov 2016
1 The 2010, 2011 and 2012 sharesave awards were increased during 2013 as a result of the equity raising on 21 February
2013 (see note 16 of the consolidated financial statements). The exercise price of these awards was also amended as a
result of the equity raising with the price of the 2011 Sharesave adjusted to £5.576437.
2 These shares were exercised on 26 November 2014 and all shares retained. Share price on date of exercise was £7.975.
Gains of Directors from share options exercised under the Sharesave Scheme in 2014 were £3,878 (2013: £nil). Sharesave
options are not subject to performance conditions. Sharesave options are granted with an option price that is a 15%
discount to the three day average share price when invitations are made. This is permitted by HMRC regulations for such
options. The Sharesave options granted to James McConville represents options granted for the then maximum monthly savings
of £250 per calendar month for three years.
Aggregate gains of Directors from share options exercised under all share plans in 2014 was £1,299,183 (2013: £nil).
During the year ended 31 December 2014, the highest mid-market price of the Company's shares was 833p and the lowest
mid-market price was 626p. At 31 December 2014, the Company's share price was 830p.
DIRECTORS' INTERESTS
The number of shares held by each director is shown below:
As at As at Total share Total share Total share
1 Jan 2014 31 Dec 2014 plan interests plan interests plan interests
or date of or retirement as at as at as at
appointment if earlier 31 Dec 2014 31 Dec 2014 31 Dec 2014
if later - LTIP - DBSS - Sharesave
Clive Bannister - 176,422 644,938 112,229 -
James McConville - - 400,231 32,416 1,607
René-Pierre Azria 34,491 34,491 - - -
Alastair Barbour - 3,000 - - -
David Barnes1 2,747 2,747 - - -
Ian Cormack 3,650 3,650 - - -
Tom Cross Brown 1,988 1,988 - - -
Manjit Dale2 - - - - -
Howard Davies 3,623 3,623 - - -
Isabel Hudson 3,880 3,880 - - -
Kory Sorenson - 1,380 - - -
David Woods 3,500 3,500 - - -
1 David Barnes' share interests are shown as at his date of leaving on 22 October 2014.
2 Manjit Dale is a director of TDR Capital Nominees Limited and Jambright Limited and as such these companies were all
considered as connected persons up to the date of his resignation on 30 April 2014. Total interests held by these entities
amount to 13,923,409 as at this date.
As explained in the Remuneration Policy, the Executive Directors are subject to Shareholding Guidelines.
The extent to which Executive Directors have achieved the guideline requirements by 31 December 2014 (using the share price
on
acquisition/vesting) can be summarised as follows:
Position Shareholding Value of shares
Guideline held for
(% of salary) Shareholding
Guidelines
(% of salary)
Clive Bannister 200% 190%
James McConville 200% 0%
Note:
The Executive Directors are required to sign a declaration that they have not and will not at any time during their
employment with the Phoenix Group, enter into any hedging contract in respect of their participation in the AIP, LTIP,
Sharesave, SIP or any other incentive plan of the Company, or pledge awards in such plans as collateral, and additionally
that they will neither enter into a hedging contract in respect of, nor pledge as collateral, any shares which are required
to be held for the purposes of the Company's Shareholding Guidelines or any vested LTIP award shares subject to a LTIP
holding period.
ADDITIONAL UNAUDITED INFORMATION
DIRECTORS' SERVICE CONTRACTS
The dates of contracts and letters of appointment and the respective notice periods for directors are as follows:
Executive Directors' contracts
Name Date of appointment Date of contract Notice period fromRecent news on Phoenix group
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