North-east based car dealer Vertu Motors has announced a share incentive plan for its chief executive Robert Forrester and finance director Michael Sherwin.
The long term incentive plan (LTIP) offers nil-cost options on 285,204 ordinary shares for Forrester and 213,904 shares for Sherwin, which would become exercisable three years from the date of the grant subject to achievement of performance conditions and continued employment at the car dealer group.
The conditions are absolute growth in Vertu Motors' total shareholder return (TSR) of at least 25% over three years from March 1 2013, which will qualify for one half of the bonus, with the other half dependent on the TSR performance as compared to that of other companies in a comparator group.
All TSR calculations will be based on the average opening and closing share prices over a 10 business day period prior to the commencement and end of the performance period.
The absolute TSR growth target in respect of all initial awards will require the company's TSR over the three year performance period to have grown by more than 25%.
For TSR growth, over the three year period, between 25% and 100%, the half subject to the absolute TSR growth target will vest on a straight-line basis, from nil vesting at 25% growth to 100% vesting at 100%.
At today's opening price of 52p per share, Forrester's incentive would be worth £148,306 and Sherwin's £111,230.
An award-winning journalist and editor, with two decades of experience covering the motor retail industry, and accredited by the Institute of Leadership and Management (ILM) plus the National Council for the Training of Journalist (NCTJ)
As editor of AM since 2016, Tim is responsible for its media content, planning and production across AM's multiple channels, including the website, digital reports, webinars, social media and the editorial content of AM's events, Automotive Management Live and the AM Awards. His focus is on interviewing senior leaders of franchised dealer groups and motor manufacturer national sales companies to examine latest developments in UK motor retail.
Shareholder - 21/08/2013 13:33
I am in favour of share options to align the needs of the owners with the executive, but a 25% target over three years is far too low for a growing company like Vertu. At 8% per annum, this increase in sahre price can be expected as an average for all AIM companies as a minimum. This increase will likely be achievable from the economic upturn alone, we should therefore expect more. Options are about performnace as value added. Vertu will achieve 25% without any vaiue added from the executive. 50% should be the starting point. Mr Forrestor is doing a great job, but this news worries me from a governance point of view. We need more transparency about how this was agreed. We all have a stake in this company. How many shares are involved and how will this dilute my stake I wonder?