ANNUAL REPORT AND FINANCIAL STATEMENTS 2012 | 35
For the awards granted in 2010 and 2011 the following four performance measures were applied with equal weighting and are measured over a three-year period:
• Real Growth in Earnings per Share over 3 years: full vesting at RPI+11 per cent p.a., 25 per cent vesting at RPI+3 per cent p.a.
• Total Shareholder Return relative to a peer group of FTSE 250 Financial Companies: full vesting at upper quartile, 25 per cent vesting at median
• Relative investment performance compared to benchmarks: full vesting at 75 per cent of revenue-weighted funds outperforming benchmark, reducing on a straight line to nil vesting for 42 per cent of revenue-weighted funds outperforming benchmark
• Achievement of annual net new business targets as approved by the Board: full vesting for achievement of 125 per cent of target, reducing on a straight line to nil vesting for achievement of 25 per cent of target
These measures were selected as at the time they were considered by the Committee to be the most relevant in capturing the critical elements of performance which reinforce value creation for shareholders.
For the awards granted in 2012 the performance condition is linked solely to the Company’s underlying Earnings per share for the year ended 31 December 2015, with 20 per cent of the award vesting at 8.2 pence per share and 100 per cent vesting at 13.7 pence per share and above.
During the year a total of 1,492,537 restricted share awards were made under the LTRP to the Company’s Executive Directors (2011: 2,815,730) and a further 18,208,927 restricted share awards were made to members of the senior management team (2011: 933,954).
The Remuneration Committee is considering granting LTRP awards in 2013 and will finalise the nature of the performance conditions following consultation with shareholders. Full disclosure of the vesting conditions will be provided in the 2013 Directors’ Remuneration Report.
Deferred Awards Deferred awards have been made of Ordinary Shares, the vesting of which is contingent on the continued employment of the participant over the three-year deferral period.
During the year, 1,382,076 deferred awards were made under the LTRP (2011: 15,437,379). Deferred awards were made to 12 staff during 2012 (2011: 217 staff).
Under the rules of the LTRP the Executive Directors are not eligible to participate in deferred share awards.
Achievement of performance conditions During 2012, the growth in the Group’s underlying EPS underperformed the growth in the RPI by 25.81 percentage points.
The Company’s total shareholder return (TSR) ranked 4th out of a FTSE 250 Financial Companies Index comparator group of 15 companies in the period from 4 May 2010 to 31 December 2012 and 4th out of a FTSE 250 Financial Companies Index comparator group of 16 companies in the period from 4th May 2011 to 31 December 2012.
Information on the new business and investment performance results of the Company is set out in the Business Review on pages 2 to 19.
Share price performance The share price at 31 December 2012 was 102.2 pence. During the year the highest price was 102.8 pence per share and the lowest price was 59.5 pence.
Performance graph for the share incentive schemes The graph below compares the performance of the Company with a notional investment made up of shares of the group of companies from which the FTSE 250 Financial Companies Index of companies is calculated. The graph is based on the TSR for each period (assuming all dividends are reinvested). The FTSE 250 Financial Companies Index has been chosen as the comparator index as it is the index that includes the Company and is considered the most appropriate benchmark as there are very few comparable listed asset management businesses.
TSR performance compared to FTSE 250 Financial Companies Index
For the five financial periods ending 31 December
100 140
80 60 40 20 0
120
FCAM
FTSE Financials
Source: Datastream
29 Dec 2007
31 Dec 2008
31 Dec 2009
31 Dec 2010
31 Dec 2011
30 Dec 2012
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