Background
The existing Management Incentive Plan (“MIP”) which has been in place since May 2018, was designed around the Company's then turnround plan, with awards that matched management's business turnaround achievements. No further grants of options have been made under the MIP since those made in May 2018, and no further awards will be made under the MIP.
The new LTIP will be based on market standard annual awards and will incentivise the senior management team after the current MIP ceases in April 2021.
The LTIP will be limited to a maximum of 5% of the issued share capital of the Company over its five year life, and individual awards ranging between 100% and 150% of base salaries in any one year.
All awards made under the LTIP will be made by the granting of nil-cost options established in accordance with the rules of the LTIP and vesting is subject to adjusted EBITDA targets measured over the three financial year period commencing on the date of grant.
The Remuneration Committee has discretion to amend these terms to take account of, for example, corporate activities such as acquisitions to ensure that the performance targets remain appropriate. Malus and clawback provisions are also in place to reduce or recover any awards for criteria such as any material misstatement of the financial statements, a serious breach of the Company's code of ethics or a serious health and safety issue.
Award size, performance conditions and dilution
On 05 March 2021, options over 3,082,823 shares in aggregate (the ” 2021 Awards”) were granted under the LTIP, including those set out below which were granted to directors and other persons discharging managerial responsibility:
|
Director / PDMR |
Role |
Number of shares over which 2021 Awards made |
|
Dan Wright |
Executive Chairman |
362,903 |
|
Gareth Jenkins |
Chief Executive Officer |
907,258 |
|
Richard Newman |
Chief Financial Officer |
554,435 |
The 2021 Awards are subject to the below Adjusted EBITDA targets measured over the performance period ending on 30 April 2023 and are summarised below:
|
Adjusted EBITDA for FY2023 |
Percentage of the 2021 Award that may vest |
|
Less than £27.0m |
0% |
|
Between £27.0m and £29.7m |
between 25% and 100% |
|
£29.7m or greater |
100% |
If the maximum targets are met in FY23, the total dilutive impact of the 2021 Awards will be c.1.0%. The maximum aggregate dilutive effect including unexercised options which still exist under the MIP over 3.6% of the issued share capital of the Company, will therefore be 4.6%. In the event that the LTIP is utilised in full, then this potentially dilutive impact will increase to a maximum of 8.6% of the Company's current issued share capital.