Strategic Report
Governance Report
Financial Statements
Company Financial Statements
grant of 200% of salary. All details relating to Katherine’s remuneration during the reporting period are provided later in this report. Incentive outcomes for the year During FY25 the Executive Directors led the successful disposal of the International business and acquisition and organisational change activities to reshape and reposition the Group’s enhanced investment management and financial planning capabilities. As part of this, key strategic investments were made with the development and launch of new Global MPS and Retirement Strategies solutions, revitalising the Group’s client offerings and propositions. In tandem with this, the Group progressed from the AIM to the Main Market of the LSE, with the necessary changes and opportunities in shareholder recomposition capably overseen. Throughout these improvements, prudent cost management has ensured that shareholders have continued to receive robust returns as the Group has transformed at pace. For the FY25, the Group grew FUM by 7% from £15.5 billion to £16.6 billion and reported an underlying profit before tax (“PBT”) of £28.9 million, representing an underlying profit margin of 25.9%. The Group’s M&A activities in the reporting period made a positive contribution to earnings and the targeted cost saving programmes conducted by the Group in FY25 were effective. The significant level of strategic investment in the business, combined with reduced fee and transactional income, did however result in a decrease in the Group’s underlying profit margin compared to that reported for FY24 of 28.4%. Andrea Montague as CEO Designate between July 2024 and September 2024, and then CEO for the remainder of the year, is eligible for a full year annual bonus, and Katherine
Jones who joined the Group as CFO at 1 November 2024, is eligible for a pro-rata amount for two thirds of the reporting period. The Committee maintained the majority of the bonus scorecard approach that operated for FY24. Some changes to measures and weightings were made with the removal of the gross flows sub-measure to focus solely on net flows performance, the reorganisation of profit, margin and cost/income ratio measures into a clearer profit and operating efficiency grouping, and the slight increase in the weighting of revenues and net flows measures to create greater alignment between financial measures and the Group’s growth ambitions. No changes were made to the overall weighting of the scorecard of 60% financial and 40% non-financial and no changes were made to the non-financial measures. The bonus outturn for financial measures reflected the high level of investment made in the business during FY25, with strong gross revenues performance, profit and operating efficiency outcomes around on-target performance, and net flows performance at threshold. The Committee considered these outcomes reflective of the Group’s holistic financial performance over the year. In aggregate, the assessment of financial measures provided for an outturn of 65% of maximum opportunity. The Committee’s assessment of non- financial performance during FY25 took into account the exceptional level of transformation and strategic repositioning achieved over the past year, the outcomes delivered to clients through the Group’s consistently strong investment performance relative to peers, as well as the progress made in re-organising the leadership of the Group and the improvements in risk frameworks and operational risk outcomes. These achievements were recognised at the
industry level in FY25, with the CEO winning Female Wealth Management CEO of the year at the City of London Wealth Management Awards. Based on performance against the non-financial measures set by the Committee, it was agreed to award the maximum outturn for non-financial performance. The combined financial and non-financial outturn was reviewed by the Committee to ensure it fairly reflected the Group’s pay for performance principles, struck the right balance between the individual contributions made and the overall level of organisational performance and returns delivered to shareholders, and was consistent with the range of outcomes across the wider workforce. With these factors being satisfied, the Committee agreed no discretion was required to adjust the annual bonus outcome which provides for a combined, overall outturn of 118.5% of salary, equivalent to 79.0% of maximum opportunity for both current Executive Directors. Executive Director bonus awards are subject to the Group’s Malus & Clawback Policy and one third of bonus will continue to be awarded in deferred share options, providing ongoing alignment of interests between senior leadership and shareholders. A full description of the assessment and scoring of financial and non-financial measures is included later in this report. The performance of the 2022 Executive Director LTIP award was measured at the end of FY25. The performance measures approved by the Committee for this award were, (i) underlying diluted earnings per share (“EPS”), representing 90% of maximum opportunity, and (ii) a basket of defined ESG development goals forming the remaining 10% of maximum opportunity. With both current Executive Directors having been hired either in FY24 or FY25, the two participants in this plan are
former Chief Executive, Andrew Shepherd, and former Chief Operating Officer, Lynsey Cross, both of whom as good leavers are eligible for service related pro-rata awards. The EPS outturn was below the threshold target and no vesting was approved for this element. The ESG measures were assessed as being fully satisfied, resulting in an overall vesting of 10% of maximum opportunity. The Committee agreed that the vesting outcome was appropriate and that no discretion should be applied to the calculated outcomes. This resulted in LTIP payments of £60,232 and £5,679 to the former Chief Executive and former Chief Operating Officer, respectively. LTIP awards granted during the year LTIP grants were made to both the CEO and the CFO of 200% of salary in line with the Directors’ Remuneration Policy. The performance measures for the awards were changed from the previous years’ grant following consultation with key shareholders to add organic growth in FUM (35% weighting), to underlying diluted EPS (50% weighting) and a basket of ESG performance conditions (15% weighting). The EPS targets are set out later in this report. The disclosure of the organic growth in FUM targets is currently considered commercially sensitive and disclosure will be reviewed going forward. These awards will only vest and become exercisable to the extent that the targets are achieved over the three-year performance period from FY25 to FY27 performance years. Following vesting, any vested shares are subject to a further two year holding period. Malus and clawback provisions also apply to the awards.
Brooks Macdonald Group plc Annual Report and Accounts 2025
79
Made with FlippingBook - professional solution for displaying marketing and sales documents online