Alvarez and Marsal

A&M Tax Advisor Update

FTSE 250: Directors’ Remuneration Trends 2021

Jeremy Orbell, Managing Director

jorbell@alvarezandmarsal.com

Nicolas Stratford, Managing Director

nstratford@alvarezandmarsal.com

David Tuch, Managing Director

dtuch@alvarezandmarsal.com

Zijun Zhao, Director

zzhao@alvarezandmarsal.com

December 3, 2021 / UK

A&M is pleased to provide our latest summary of observable trends in FTSE 250 Executive Directors’ remuneration disclosures. 2020 was a challenging period for many companies, and this has been reflected in the remuneration outcomes for Executive Directors. Our report discusses the factors that have contributed to overall shifts in compensation, notably with this year’s key findings highlighting:

  • Lower payments from bonus and long-term incentive plans coupled with depressed share prices for many companies has reduced the amounts earned by top executives.
  • Overall, the median single figure of total remuneration for FTSE 250 CEOs and CFOs at companies with year ends up to 31 March 2021 fell by 21 percent and 29 percent, respectively, compared to the previous year.

Restricted share plans and ESG metrics becoming more prevalent

Economic disruption caused by the pandemic has accelerated a number of existing trends. More companies have adopted restricted share plans at a time when long-term targets became more difficult to set, and Environmental, Social and Governance (ESG) measures have significantly increased in prevalence, even in long-term incentives.

The economic turbulence has also resulted in an increased focus on cash and net debt targets as well as strategic objectives for both annual bonus and long-term incentives. Weightings on traditional measures such as profit for annual bonus and relative Total Shareholder Return (TSR) and Earnings Per Share (EPS) for long-term incentives have reduced as a result.

A&M invites you to explore these and other developments in our latest report FTSE 250 Directors’ Remuneration Trends 2021

FTSE250

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The A&M Difference

A&M expects key developments to continue through 2022. Although, instead of simply following the market trend, the A&M Executive Compensation team understands it is critical that changes to existing structures have a robust rationale and are aligned with company strategy.

Talk to our team led by hands-on Managing Directors with 80+ cumulative years’ experience advising clients on remuneration matters to discuss your corporate Executive Compensation strategy.

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