Incentives to lock in investment team

Fund manager Hunter Hall International has sought to lock in its investment team by implementing an equity plan capable of seeing the portfolio managers emerge with more than 10 per cent of the company.

The company is also instituting a Profit Share Plan that will enable senior members of the executive team to earn between 6 and 15 per cent of the pre-tax profits of Hunter Hall, when pre-tax earnings exceed 60 cents per share — approximately the current level of ‘normalized’ earnings.

The chairman of Hunter Hall, Peter Hall, said the so-called Portfolio Manager Share Plan would be subject to shareholder approval at a meeting scheduled for September 22 and would enable the investment managers to purchase up to 2.35 million shares over a nine-year period at $6 each.

He said the plan would avoid diluting the holdings of ordinary shareholders because the shares would be purchased from his 50 per cent stake in the company held by Hampshire Assets and Services Pty Ltd.

The company said the plan would be conditional on performance, with investment team members only able to purchase shares if the company achieved each of five thresholds — a half-yearly, pre-tax profit starting at $8 million and rising in four steps to $20 million over the period to June, 2015.

Hall said the two plans were an important part of the company’s evolution from a one-man band to an investment institution.