Strategic Report
Governance Report
Financial Statements
Other Information
Performance measures for the FY25 annual bonus The Remuneration Committee has reviewed the efficacy of the FY24 annual bonus measures in incentivising the delivery of the Group’s strategic priorities and will take forward the majority of measures that operated for FY24 into FY25. The changes that will be applied are that the Gross Flows measure will be removed in favour of all flows performance being assessed on the basis of Net Flows success. This approach better supports the Group’s growth ambition and focus on the retention of existing investments being critical to growth. Similarly, the weighting of flows and revenues measures has been increased so that growth outcomes are more central to executive pay outcomes. Profit, margin and cost efficiency measures continue to emphasise the importance of our ambition to generate top quartile returns to the Group’s shareholders. The targets and associated ranges for the above measures are considered price sensitive and will be fully disclosed in the FY25 Annual Remuneration Report, along the with Remuneration Committee’s outturn assessment.
The FY24 non-financial objective categories will be retained on a largely unchanged basis for FY25, the only change being that the strategy category will be renamed strategy and growth, better describing the nature of the objectives that have always operated. The 60/40 scorecard weighting between financial and non-financial objectives will continue to operate. Performance measures for the FY25 LTIP During FY24, major shareholders were consulted on proposed changes to measures for 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, reflecting 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. The new measure would use FUM as at the close of FY24 as the starting
position and growth would be measured over the full three year performance period (FY25 to FY27). Automatic adjustments will be made to normalise the impact of any acquisitions and divestments occurring within the performance period. However, no adjustment will be made for market movement over the period. This proposal to add the FUM growth measure 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 – adjusted (35% of overall opportunity). • 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, through to 50% vesting at the target position, rising to full vesting only in the event significant
over-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. ESG deliverables will focus on measuring progress against the Group’s 2030 net zero carbon footprint ambitions, measured independently through the Groups partnership with LG Energy group against agreed targets and delivering outstanding customer outcomes, measured by customer feedback. LTIP targets are commercially sensitive and will be disclosed at the completion of the performance period in the FY27 annual report. 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.
Weighting within overall bonus
Award payout (% of LTIP award)
LTIP Performance metric
Financial category
Category measure(s)
Measurement period Measured against FY27 EPS Measured FY25 to FY27
Revenue
FY24 Gross revenues target (£m)
20.0% 20.0% 6.67% 6.67% 6.67%
Weighting Threshold
Target
Maximum
Flows
Net (organic) flows as a % of opening FUM (%)
Absolute underlying diluted EPS
Underlying PBT (£m)
Profit and Operating Efficiency
50.0%
12.5%
25.0% 50.0%
Underlying PBT Margin (%) Cost / Income Ratio (%)
FUM Growth ESG outcomes aligned to the policy areas
35.0%
8.75%
17.5% 35.0%
15.0%
3.75%
7.5%
15.0%
Brooks Macdonald Group plc Annual Report and Accounts 2024
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