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Appointment of the Chief Financial Officer
will see revenue, flows, profitability, margin and cost efficiency financial measures all retained from the FY24 scorecard, albeit with a greater emphasis on net flows compared to the dual gross and net flows targets that operated for FY24. Similarly, client, people and risk non-financial categories will all be retained, with strategy being updated to growth and strategy to emphasise the qualitative ambitions around growth. Client category measures will continue to monitor the Group’s investment performance relative to peers as well as assess the level of service and outcomes delivered to clients. People category measures will continue to underpin the Group’s DE&I ambitions and incorporate targets for the representation of women in the Group’s senior leadership as well as assess the development of the Group’s management and leadership capability. The performance outturns of the FY25 financial and non- financial measures against the targets set will be disclosed in next year’s report. During FY24, major shareholders were consulted on proposed changes to the measures used for assessing the next grant of Executive Director LTIP awards to be made at the start of the FY25 reporting period, Whilst no changes were proposed in respect of LTIP opportunity quantum or structure, shareholders were consulted on the expansion from two to three measures to enable the inclusion of an FUM growth incentive, recognising that the building of a strong and stable asset base is fundamental to the success of the business and continuation of sustainable returns to shareholders. This proposal was well received in the main and has been adopted for the next set of Executive Director LTIP awards to be granted shortly. The measures used for these awards will therefore be underlying, diluted EPS (50%
of overall opportunity), average FUM growth (35% of overall opportunity) and targeted ESG measures (15% of overall opportunity). The same Executive Director LTIP structural principles as operated previously will continue to apply with vesting occurring on a graduated basis from threshold performance (at which 25% of the award vests), rising to full vesting only in the event significant over- target performance is delivered. Formulaic adjustments for actual dilution and actual effective tax rate will continue to operate for the assessment of the underlying, diluted EPS performance, and automatic adjustments will be made to eliminate the impact of acquired and divested FUM for the assessment of average FUM growth. The opportunity levels for the CEO and Chief Financial Officer will remain unchanged at 200% of base salary each. A full description of the amended Executive Director LTIP is available in the Directors’ Remuneration Policy accompanying this report, At present, no changes are proposed to key benefits in FY25. However, the Group will continue to review levels of retirement benefits it currently offers. In the event any future changes are approved by the Remuneration Committee, they would apply to the Executive Directors and the wider workforce alike. The Remuneration Committee believes that the current structure of the Directors’ Remuneration Policy and overall remuneration opportunity it offers will be effective in retaining and appropriately incentivising the incoming CEO and also in attracting a high calibre candidate for the Chief Financial Officer position.
The Group is currently conducting an extensive review of Chief Financial Officer candidates with the requisite leadership, commercial and financial acuity to drive forward the Group’s ambitious growth strategy. At the conclusion of this process, it is expected that the successful candidate will be offered a level of salary consistent with the parameters currently operating for the role, will receive a pro-rata FY25 bonus opportunity and will receive an LTIP grant within the FY25 reporting period in alignment with the terms described in the Directors’ Remuneration Policy. In the event the successful candidate would be disadvantaged by the loss of deferred compensation in joining the Group, the Remuneration Committee may consider offering a value of compensation and vesting terms and conditions equivalent to that being forfeit, with no additional incentive being made available. Pension benefits offered will be aligned with the wider workforce and the Remuneration Committee will directly oversee and pre-approve all elements of the Chief Financial Officer remuneration package. Our upcoming AGM This report will be presented to shareholders at the upcoming Annual General Meeting on 24 October 2024 and I hope that you will join the Board in supporting this non-binding resolution.
Brooks Macdonald Group plc Annual Report and Accounts 2024
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