April 4, 2013 8:09 pm

Old Mutual pair share £12m pay package

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Two senior executives at Old Mutual have shared a £12m pay package, under schemes devised three years ago to reward them for reviving the financial services group’s fortunes.

Julian Roberts, chief executive of the Anglo-South African company, is in line for a £7.17m deal for 2012, including a £1.15m annual bonus and an estimated £4.85m worth of shares under long-term incentive plans (LTIPs)

Philip Broadley, finance director, is set for £3.21m-worth of LTIP share awards, bringing his total annual remuneration to £4.76m.

Mr Roberts’ total package is about three times the median for listed UK companies with market capitalisations between £3bn and £10bn, according to data from the proxy voting service Manifest, based on averages from 2011. It is also in the upper quartile for companies with market capitalisations of £10bn or more. After a rally in its shares, which closed at 197.21p on Thursday, Old Mutual has a market capitalisation of £9.74bn.

The executives’ pay figures include shares being released under two separate pay mechanisms that Old Mutual put in place when it was coming under pressure from shareholders over its strategic direction.

Old Mutual is set to grant Mr Roberts and Mr Broadley three quarters of the maximum award under a one-off plan designed in 2010 to encourage them to streamline the life assurance and investment group.

Since then, the group has met several of the objectives, including selling its Nordic business for £2.1bn.

However, it has yet to deliver on other targets – notably selling its stake in the lender Nedbank, and floating its US asset management business.

The senior management duo are also in line for 86 per cent of the maximum grant under another long-term plan that was set up encourage them to improve financial performance.

Minimum targets for this plan included delivering a return on equity of at least 15 per cent and lifting adjusted operating profits by 30 per cent over three years. Old Mutual beat these numbers, delivering a 20 per cent return on equity and 52 per cent rise in profits over the period.

The precise values of the LTIP awards have yet to be determined, as the share awards will vest in two batches over the coming months. The awards come on top of a total pay deal of £7.46m for the chief executive and £3.06m for the finance director last year.

The pay disclosures in Old Mutual’s annual report on Thursday came two days after fellow life insurer Standard Life said its three leading managers were set to share a bonus pot of almost £10m.

More recently, Old Mutual has turned its attention to expanding operations in sub-saharan Africa. Profit from this push is among the criteria in a new LTIP for executives.

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