Britannic Asset Management (BAM) has tied in its key personnel with a salary related incentive deal ...
Britannic Asset Management (BAM) has tied in its key personnel with a salary related incentive deal aimed at preventing departures in the event of a takeover or merger.
The asset management house is to pay senior staff an additional bonus worth 50% of salary, if they are still with the company on 31 March 2003.
This is in addition to a long-term incentive plan, which was put in place in early 2000. Britannic's fund management personnel are also eligible for performance related bonuses, payable each year.
Under the long term incentive plan which put in place 'quasi' equity options, the value of which was benchmarked against the share price of floated asset management companies with a similar business structure to Britannic.
The staff concerned receive additional 'options' every year for three years, which are rolled up and can be drawn on at the end of the three year period, up to a maximum of 20% of the total value of the incentive plan per year.
The first year that the incentive plan can be drawn on is 2003. However, the value of asset management companies has fallen during the past year, and as a result so has the realisable value of the long-term incentive plan. In the event of a buyout this element of the remuneration package becomes a guaranteed payoff of 1.4 times salary, as following any takeover the long term incentive plan may no longer be continued.
In order to prevent staff leaving before the terms of any takeover can be agreed, and to ensure that they remain incentivised, Britannic has decided to add a third tier of remuneration for which all members of the long term incentive plan are eligible.
In March this year Britannia Group chairman Harold Cottram announced that the group were looking for a strategic partner.
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