Berkeley Group Holdings - AGM 06 September 2019
The Company has paid a dividend in respect of the financial year, however no resolution to approve the distribution has been proposed at the general meeting.
Item 2: Approve the New Remuneration policy
The company proposes to remove the Bonus Plan for 2019/20. Therefore, variable incentives will solely be based on 2011 awards performance condition of £2 of return required each year for the tranche of options to vest, and £2 of return required each year for any of the ‘banked’ shares to vest. Thus, there will be an insufficient alignment between incentive pay and Company strategy.
Moreover, the company proposes to remove the LTIP Cap. Even if the Total Remuneration Cap will remain unchanged, we remind the company that it is still excessive.
Item 3: Approve the Remuneration Report
The remuneration structure is not considered acceptable, primarily as the maximum variable remuneration is excessive. The LTIP is fully determined by shareholder returns which are under the control of executives. Performance metrics are not considered sufficiently challenging and we note that the ROE target has been lowered. Alignment with performance has not been definitively demonstrated.
Item 28: Amend LTIP 2011
Changes proposed do not seem to impair shareholders' interests. However, under the 2011 LTIP, only 1 performance condition is used (shareholders return), which does not allow for a good alignment between the Company's strategy and its executives' incentives. Moreover, shareholders should note that the shareholder return targets were achieved by the company using a combination of dividends and share buy-backs (thus, controlled by executives).
Berkeley Group Holdings is a holding company. Through its subsidiaries, Co. is engaged in residential-led property development focusing on urban regeneration and mixed-use developments. Co. focuses its development in London and the South of England markets.
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