Blue Prism Group: LTIP structure around performance shares award

Blue Prism Group is overhauling its remuneration structure for the coming year with an increase in pay opportunity and the introduction of new long-term incentive awards. As Blue Prism is listed on AIM the company is not required to put its forward-looking remuneration policy to shareholders for approval, although they are offered a non-binding vote on the backward-looking remuneration report at the AGM.

From 2018/19 the LTIP will be structured around the award of performance shares. For 2019, the RemCom has approved an award of performance shares equal to 200% of salary to CEO Alastair Bathgate and 150% of salary to Finance Director Ljoma Maluza. The vesting of the awards will be based on revenue growth and TSR performance against a peer group over a three-year period. While the TSR targets have been disclosed, the revenue targets have not. Previously long-term incentive awards consisted of market value share options with no underlying performance conditions attached.

Blue Prism Remuneration Key Features

The bonus cap for CEO Bathgate is set to be increased from 100% of salary to 250% of salary for the coming year. The committee states the increase was made in order to shift the balance of CEO compensation from fixed to variable pay. Reflecting this, the CEO’s annual salary will stay unchanged at £200,000, although Bathgate did receive a significant salary increase in the previous financial year.

In contrast Maluza’s bonus opportunity will remain at 100% of salary while his salary rate will be increased from £155,000 to £220,000 thereby taking the FD’s salary above the CEO. The committee has provided limited detail regarding the mechanics of the annual bonus limiting shareholder ability to assess the alignment between pay and performance.

Disclosures provided by the Company indicate there are no shareholding requirements in place and that the claw-back provisions apply only to the performance shares and not the annual bonus.

Disclosures which help investors understand the link between reward and strategy are not expensive, nor do they require regulation – which is. Nor is there a shortage of good practice guidance from a range of independent sources, just a reluctance to adopt it, or so it seems. Small caps, hopefully, become larger caps; if boards can get the governance right at the start of the journey it will stand them in good stead for the future.

Last Updated: 25 March 2019
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