Henderson Global Investors is looking to review its policy on bonuses that pay out in the form of deferred shares, in response to guidelines from the Financial Services Authority (FSA).
It was prompted to conduct the review after FSA’s code of practice on remuneration outlined measures which stipulate that most of any significant bonus should be deferred. The regulator has said it is best practice for at least two-thirds to be deferred.
Henderson’s final strategy will include both mandatory and voluntary deferral methods. Jeremy Mindell, senior reward and tax manager at the firm, said: “A mandatory deferral is where we are saying ‘right, if you earn above a certain amount, then some of that is deferred into shares for a certain period’. It is for high earners and for the types of employee you would expect to have some sort of lock-in.”
He said such arrangements encouraged staff to stay loyal to the organisation, but also encouraged good performance and behaviour. “It encourages elements of good behaviour, so what [an employee] has done one year does not go wrong the next.”
Mindell did not disclose what proportion of employees’ bonuses would eventually be deferred into shares, but said the firm would look at the financial market and what other employers were doing.
Henderson, which has almost 1,000 staff worldwide, operates a large number of share schemes, and almost all its employees take up shares in one or more of them.