Sector’s best-paid directors could receive shares worth three times their salary
Helical Bar, whose four executive directors are the best remunerated in the quoted property sector, has won shareholder approval for a new share bonus plan.
The plan, which received 99% shareholder backing at Helical’s annual general meeting on Wednesday, will enable Helical executive directors and senior managers to be granted shares in the company up to three times their annual salary. It replaces Helical’s previous share option schemes, which are being phased out by quoted companies in general.
For Helical’s four executive directors, managing director Mike Slade, finance director Nigel McNair Scott, development director Gerald Kaye and investment director Mike Brown, the share plan is in addition to their basic salaries and annual bonuses.
Helical’s remuneration committee, comprising chairman John Southwell and non-executive directors Giles Weaver and Anthony Beevor, devised the new plan with advice from New Bridge Street Consultants. The aim is to ‘align the executive management’s interests with those of shareholders’, the committee said. It added the performance conditions for the vesting of shares were ‘demanding’ and would be measured over three years.
There will be two performance conditions, one based on absolute growth in Helical’s net asset value per share and the other on the gross total property return per share relative to other property funds, as determined by IPD. To receive the maximum allocation of three-times-salary shares Helical must achieve absolute NAV growth of 15% a year and be ranked in the upper quartile of IPD funds.
The remuneration committee said it believed ‘that in the case of a property company such as Helical Bar, performance measures based on absolute returns and on a comparison of NAV growth and total property returns are better than measures based on total shareholder return’.
Helical has been the best-performing quoted property company over the last 20 years and its executive directors have been richly rewarded. In the last four years Slade has earned £2.3m, £1.9m, £510,000 and £1.5m. Kaye has been the top earner, picking up £3.7m, £2.3m, £712,000 and £418,000, while Brown has taken £1.8m, £1.7m, £603,000 and £1.4m.
In addition to their annual salaries, which are £478,000 (Slade), £210,000 (Kaye) and £175,000 (Brown and McNair Scott), the four are entitled to bonuses under the annual incentive plan. The maximum total payout is £4m and the maximum one individual can earn is £2m. The plan requires Helical to be ranked in the upper quartile of the IPD index for capital growth for all properties on both a geared and ungeared basis.
Annual sector bonuses of up to £1m can also be paid to Kaye and Brown based on performance.