15th Oct 2018 11:52
LONDON (Alliance News) - Interdealer broker TP ICAP PLC is considering a change to its bonus plan after pay target issues with former chief executive John Phizackerley, the Financial Times reported.
Phizackerley stepped down in July, with TP ICAP citing a need for change after its GBP1.3 billion acquisition of the voice broking operations of ICAP, which subsequently became NEX Group PLC.
"It has become clear that a change of leadership is required to execute our medium-term growth strategy and deliver the detail of the integration process," Chairman Rupert Robson said in the July announcement.
According to the FT, Phizackerley argued that the current bonus scheme targets were unfeasible and would result in a low pay-out, creating friction in the company.
The newspaper reported that the incentive scheme, which initially covered 20 executives, was approved by "almost 90% of shareholders".
However, two people who had been briefed on the plans told the FT that a different scheme is being considered for new CEO Nicolas Breteau and other senior managers.
https://www.ft.com/content/741059d0-cf9c-11e8-a9f2-7574db66bcd5
Also in July, TP ICAP had issued a profit warning due to the impact of Brexit, legal and regulatory costs, and IT security. It also reduced its cost-savings target for the integration of the ICAP.
On Friday, Moody's put TP ICAP's Ba1 rating on review for downgrade with the slower-than-anticipated ICAP integration a key consideration.
The integration, which was intended to complete by the end of 2018, will take a further year to complete and will incur GBP60 million in costs according to the ratings agency.
Moody's said its ratings review will focus on the likelihood of an improvement in retained cash flow in the medium term, as well as whether TP ICAP's financial policies are likely to reduce gross leverage.
Shares in TP ICAP were up 0.4% at 274.30 pence on Monday.
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