Miton has revealed the details of the share incentive plan it hopes will help it retain its top managers.
The Aim-listed asset manager revealed it was planning a lock-in scheme for staff in its half -year results in September. This morning the firm issued a circular to shareholders outlining the plans and seeking approval.
Ian Dighé, executive chairman of Miton, said the plan was “designed to support the company’s long-term objectives, especially the growth of profits and assets under management” by retaining talent.
He said the managers would not see any benefit from the plan for at least four years and that the plan “should not result in a significant charge to the profit and loss account of the company”.
Miton is proposing to set up a holding company, Miton Group Service Company, that will hold units of “growth shares” which will be distributed to each fund manager on its books.
These growth shares, which will be kept separate from the firm’s ordinary share capital, will increase in value based on the increase in profits and assets under management that is attributable to each individual manager.
The growth shares can later be exchanged for the equivalent value of ordinary shares in the company, which will be subject to a lock-in so that the managers will not be able to sell those shares for a year.
The Miton fund managers, which include Gervais Williams (pictured), Bill Mott and Martin Gray, will therefore benefit from the plan only if the assets in their funds increase and thereby generate more profit.
Miton is also proposing to cancel its share premium account and capital redemption reserve in order to use the money in those schemes to issue dividends to investors.
The cancellation comes after Miton was forced to write down the value on its subsidiaries, including the recently-acquired PSigma Asset Management, giving it a deficit of £12.3m.
Cancelling share premium account and capital redemption reserve will allow the firm to return to a cash surplus of £27m, which it said will be distributed as dividends, but the firm first requires the approval of shareholders and its creditors to cancel the schemes.
The firm has called a shareholder meeting on November 15 in order to approve both the “growth share” plan and the cancellation of the share premium account.