5th Nov 2008 14:21
Resignation and appointment of new Chief Executive
5 November 2008
As foreshadowed on 28 August 2008, the Henderson Group plc (the 'Company' or 'Group') Board confirms the resignation of Roger Yates as Chief Executive and Managing Director, effective today.
The Board also confirms the appointment of Andrew Formica as Chief Executive and Managing Director with immediate effect. A summary of the key terms of the new Chief Executive's contract is attached.
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Further information
www.henderson.com or
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Investor enquiries
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Mav Wynn, Head of Investor Relations
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+44 (0) 20 7818 5135 or
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+44 (0) 20 7818 5310
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Media enquiries
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United Kingdom: Maitland
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Australia: Cannings
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Lydia Pretzlik/Rebecca Mitchell
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Pip Green/Luis Garcia
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+44 (0)20 7379 5151
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+61 (0)2 9252 0622
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Summary of Key Terms of Service Agreement
In determining Andrew Formica's employment arrangements, the Board took into account benchmarking against peer financial institutions and other relevant data provided by external remuneration consultants.
1. Duration of the Contract
Mr Formica is employed under a continuous contract with no fixed term.
2. Remuneration
Basic salary - Mr Formica's basic salary is £350,000. This will be reviewed annually with the first review to occur in March 2010
Pension - Mr Formica will continue as a member of the Defined Contribution section of the Henderson Group Pension plan on the same basis as other employees. He will receive a Company contribution, currently 10.5% of basic salary into the pension plan. Basic salary for pension plan purposes is limited by the operation of a scheme earnings cap which for 2008/9 is £116,904.
Short Term Incentive (STI) - The range of Mr Formica's annual STI payment will be between 0 and 600% of his basic salary with a target of 300%. The actual STI payment will be determined by the Board in its absolute discretion having regard to the achievement of performance objectives set by the Board. An element of any payment may be deferred into Henderson Group shares in accordance with the Company's deferral policy.
Long Term Incentive (LTIP) - Mr Formica will participate in the same LTIP applying to other senior executives. He will be eligible to receive annual awards in the LTIP of up to 500% of his basic salary. The actual amount awarded to Mr Formica will be determined by the Board at its discretion. Awards are subject to the achievement of performance hurdles over a 3-year period. The Board will consider making Mr Formica an LTIP award on the next annual cycle which will be in early 2009.
All employee share plans - Mr Formica will continue to be eligible to participate in the Sharesave Plan (SAYE) and Buy as You Earn Plan (BAYE) which are HMRC approved plans with the proviso that, where applicable, such awards are made to him from on-market purchases rather than new issue. Mr Formica will no longer participate in any new offering of the Company's Employee Share Ownership Plan (ESOP), but his existing awards will continue until the relevant maturity dates (June 2009 - March 2011).
Legacy arrangements - Mr Formica has a Restricted Share Award (RSP) that subject to the achievement of performance hurdles pertaining to equity fund performance versus benchmark could pay out annually in March 2010, 2011 and 2012. The Board have agreed with Mr Formica that the performance hurdles should be altered to reflect the Company's overall performance and for the next payment (potentially due in March 2010) 50% will be based upon the prior performance hurdle and 50% will be based upon the performance hurdle pertaining to the Company's LTIP (which is total shareholder return versus the FTSE general financials index). After the next payment, any future payments to March 2012 will be based solely on the performance condition connected with the LTIP. Mr Formica will also benefit from matching shares in the Company's ESOP and STI deferral plans in respect of awards made prior to his appointment, but will not be eligible for any new awards. Mr Formica also holds awards made under the Company's LTIP in previous years and these will continue until the relevant maturity date and will be subject to the relevant performance conditions.
3. Termination of employment
Mr Formica's service agreement is terminable on not less than 12 months written notice by the Company or on not less than six months written notice by Mr Formica. The agreement also permits the Company to terminate his employment immediately by paying a sum equivalent to 12 months basic salary. The service agreement also allows the Company to suspend him from duties at any time once notice has been given by either party, provided he continues to receive full pay. Under certain circumstances (e.g. serious misconduct) the Company may terminate employment immediately with no further liability to make any further payment (other than amounts accrued to the date of termination).
If the Company terminates Mr Formica's employment, the Board at its sole discretion may pay a pro-rated STI in relation to the final part year of employment and vest any outstanding unvested shares in any share plans.
If Mr Formica gives notice to the Company, a pro rated STI for the final part year of employment is payable subject to Board discretion and unvested shares in any share plan (subject to meeting any performance hurdle) may vest at the discretion of the Board.
4. Non competition and non solicitation
After termination of Mr Formica's employment for any reason, Mr Formica may not compete, nor solicit customers or employees of the Group for 12 months after termination (less any period served on "gardening leave").
Related Shares:
HGG.L