AMP revamps exec share option plan
AMPsays that it has replaced share options for its executives with a new ‘performance rights’ program which delivers a pre-determined number of AMP shares in three years if the executive satisfies clearly defined performance criteria.
The company says the changes are designed to bring remuneration policies more closely aligned to shareholder interests, while acknowledging the current market and shareholder sentiment toward option schemes.
Newly appointed AMP chief executive Andrew Mohl said the review confirms that long-term incentives are an important part of remuneration.
“AMP wants a program which rewards employees who make a positive difference for the company and for our shareholders,” Mohl said in a statement to the Australian Stock Exchange.
He said community sentiment towards share options was also taken into account in developing the new scheme and that the new ‘performance rights’ give a clear incentive to achieve before shares can be received.
“The new performance rights will apply to AMP executives and senior employees, including me,” he said.
Mohl’s remuneration package will not include share options and the equity component will be subject to approval by shareholders at AMP’s annual general meeting in May next year.
AMP executives’ pay structure will consist of three parts. They will have a fixed pay package, a short-term incentive, otherwise known as cash bonuses dependent on company performance and long-term incentives, previously the executive options, now replaced by performance rights.
Options granted to executives in previous years will not be affected by the changes, the company says. But this year’s option grants approved on August 31 have now been replaced by performance rights. The price used to determine the number of performance rights shares allocated will be $14.28, which is the weighted average of the AMP share price in the five days before August 31.
AMP shares were being traded at $11.88 at 1pm today.
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