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Wed 16th Dec 2015 - Enterprise Inns bosses to see bonus boost to reflect difficult new strategy
Enterprise Inns bosses to see bonus boost to reflect difficult new strategy: The bonus potential for Enterprise Inns executive directors has been increased to reflect the challenges of its new strategy that involves converting as many as 850 tenanted pubs to managed. Annual bonus potential is to be increased to 150% of salary for each of the company’s 2016, 2017 and 2018 financial years, compared to the current policy limit of 125% and a maximum bonus opportunity for 2015 of 100%. Some 50% of any bonus earned above target will continue to be deferred into shares for three years. The Long Term Incentive Policy for the company’s 2016 financial year is to be increased to 175% of salary compared to 2015 grants of 125% of salary. It means chief executive Simon Townsend could earn as much as £2,120,000 this financial year with a base salary of £609,000 and finance director Neil Smith’s total earnings capacity increases to £1,734,000, compared to a base salary of £502,000. The company’s annual report, published today, stated: “The remuneration committee’s key focus is to reward management appropriately but not excessively and to incentivise them to deliver the primary target for our shareholders – that of improved shareholder return. Our 2020 strategy represents the most significant change in the history of our business and the core focus for management over the next five years. As a consequence, the committee has taken a fresh look at the remuneration policy in light of the new strategy and has reviewed the incentive arrangements to ensure that they are aligned with the new strategy. If the strategy is delivered effectively, the outcome will be a smaller estate, comprising higher quality assets, generating a greater level of average Ebitda and resulting returns per asset. The overall objective is to progressively reduce the gap between our share price and net asset value to deliver increased shareholder value. We have been through a rigorous process, supported by our advisers, to arrive at what we consider to be a robust and commercial approach to take us to 2020. Given the changes proposed to the incentive arrangements the company will be seeking a binding vote at its forthcoming annual general meeting on a new policy to implement the 2020 reward structure, which is to take effect from the date of the annual general meeting.” The annual report shows Townsend earned £1,627,000 in the 2015 financial year, compared to £880,000 the year before – the 2015 earnings were made up of £463,000 base salary, £28,000 in taxable benefits, £115,000 in pension payments, £282,000 in annual bonus and £737,000 in Long Term Incentive Plan benefits. Smith earned £1,410,000, compared to £756,000 the year before.


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