Vislink has adopted an incentive policy for executive directors and senior management that will award 15.38% of the capitalisation of the company (plus dividends paid) above £85m over three years.
Comment by Paul Scott on Stockopedia (scroll down to Vislink section) and here. Discussion on advfn (registration required). Discussion on Motely Fool UK.
A Q&A letter from the Remcon chairman to David Stredder is below the poll.
Article Vislink – who’ll take the money and run? on Investors Chronicle site
i) Are we willing to disclose the LTIP targets?
Our policy is to do so only through our Annual Report, as to reveal them would, we believe, provide inside information about our financial objectives and forecasts. As you will appreciate, we do not wish to selectively disclose our forecasts nor disclose them to the market. As with previous schemes we have used EPS growth as the key metric as we feel this underpins the shareholder value targets in the VCP scheme.
As we mentioned at our meeting, all senior staff in the group have LTIP opportunities aligned to those of the executive management.
ii) The definition of EPS shown in the presentation was different to that set up in the annual report. Which is the correct one?
Both definitions are correct. The definition in the annual report shows adjusted EPS while the definition in the VCP presentation shows adjusted EPS normalised for tax.
iii) Would we consider disclosing the names of the companies which formed the due diligence while developing the VCP scheme?
The remuneration committee examined closely a number of public company VCPs when deciding on upon the parameters of the Vislink VCP. Those companies examined represented a wide cross-section of UK public companies which, we believe, had transformational objectives and - which to a large extent - have been or are being realised.
As part of our analysis we sought to focus on the performance conditions and length of the schemes which, we believe, best reflect Vislink's circumstances. A bespoke scheme was created accordingly with the assistance of our professional advisers.
iv) What was the cost of putting the VCP in place?
We do not provide details of expenses incurred during the year, outside of our normal results announcements. The overall cost was, however, substantially below the lowest value mentioned during our discussions.
v) Why, when an indemnity existed over John Hawkins' tax obligations for payments made through his service company, why did Vislink contribute to the HMRC costs?
As mentioned in the meeting, the Company continues to examine this matter.
vi) Would we consider forming a remuneration panel upon which representatives of our small, medium and large shareholders would sit?
The formulation of executive remuneration schemes inevitably requires discussion about long term financial targets and strategic goals and, as you can appreciate, this can only be conducted by insiders. The remuneration committee endeavours to consult with the company’s major shareholders on material matters through the appropriate channels and at the appropriate time. The remuneration committee appreciates the willingness of all shareholders to consider matters of remuneration and will bear this proposal in mind going forward.
This question has however led the remuneration committee to consider ways of increasing the company’s communication and engagement with the company’s smaller investors.
We therefore propose that the same shareholder group attending last week’s meeting are invited to attend our annual Capital Markets Day, normally held in London in April/May, at which our group management team demonstrates the Company’s products and systems and informal discussions take place on strategic issues.
As previously explained, we have already begun to increase the group’s contact with smaller shareholders through our engagement with Equity Development, the UK's leading independent investment research company. In addition the group provides what it believes to be a comprehensive annual report detailing its remuneration policy and the company will continue to hold an open annual general meeting in London, which we encourage shareholders to attend.
vii) To what extent is the valuation of the VCP scheme influenced by LTIP shares?
The VCP scheme is not adjusted for LTIP shares. The VCP is a stand-alone incentive scheme which runs until June 2018 and continues for a number of years after the LTIP has finished.
viii) Could the contact details of the Chairman of Remuneration be posted on the company website?
The Company’s contact details are readily available on the company’s website and at the bottom of most of its RNS announcements. Any correspondence addressed to the Remuneration Committee will be sent on to the committee members and addressed where appropriate. In addition we will add a new link to our web site to enable shareholders to reach the chairman of remuneration. http://investors.vislink.com/investors/investor-contacts
I hope this note has answered most of the outstanding points from our meeting.
As we explained, we believe that we have recruited a management team with experience in transforming complex businesses whilst growing shareholder value, and we have developed an integrated scheme of annual performance bonuses, three year EPS based LTIP plans and an effective four year value creation plan, which we believe will reward and incentivise the executive management team to maximise the group’s medium to long term performance and to help ensure the retention of the group’s senior management team through the group’s transformational period.
As noted in the announcement of the VCP, the incentive policy is directly linked to delivering significant shareholder value over the long term.
With best wishes
Chairman of the Remuneration Committee
Vislink Plc website
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