2.06 The policy overview gives a bonus deferral rate and a PSP threshold vesting level that differ from the rest of the remuneration report
UK Company A · a UK-listed medical technology group · Presentation point
In brief
The policy overview, which the Chair's letter cites for details of the approved policy, says that once the shareholding requirement is [wording masked] Chair's letter, the 2025 implementation table and the Annual Incentive Plan page all say 30%. The same overview says 30% of a Performance Share Plan (PSP) award vests at threshold; the 2025 scenario chart, which illustrates the same policy, values threshold at 25%.
The evidence, as filed
Screenshot withheld to protect the company’s identity: Annual Report 2024, page 143; Annual Report 2025, page 158; Annual Report 2024, page 137; Annual Report 2025, page 161; Annual Report 2024, page 146; Annual Report 2025, page 151; Annual Report 2024, page 157; Annual Report 2024, page 147. Their wording or layout could lead back to the company even with names and figures masked; the evidence list below records what each page shows.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows Policy overview: bonus deferral 'one-third rather than one-half' once the shareholding requirement is met; PSP 'For threshold performance, 30% of the maximum will vest'. Elsewhere in the directors' remuneration report (DRR): deferral 30% (three pages); PSP threshold vesting 25% (2025 scenario chart). | What the rule requires The overview states the same deferral rate (30%) and the same PSP threshold vesting level (25%) as the rest of the report, or the report explains why they differ. |
What we checked: Every statement of the bonus deferral rate and of PSP threshold vesting in the DRR: Chair's letter, policy overview, 2025 implementation table, scenario chart and Annual Incentive Plan page. The 2022-24 PSP outcome table (25% at threshold) was set aside: that award was granted in 2022 under the earlier policy, so it is not evidence of the current terms.
Why it matters
A shareholder reading the policy summary the Chair's letter points to is given a different deferral rate and a different PSP threshold from those the Committee applies; both terms decide how much an executive receives in shares at a given level of performance.
Exposure
Presentation inconsistency in a voluntary policy summary; no statutory consequence.
Our workings
the Chair's letter states the new policy reduces the annual bonus deferral from 50% to 30% once the shareholding requirement is met and refers to page 143. Page [n], headed as [wording masked] the policy approved at the 2024 AGM, says one-third rather than one-half is deferred, and that at threshold 30% of a PSP award vests. The 2025 implementation table and the Annual Incentive Plan page say 30% deferral; the 2025 scenario chart values threshold at 25% of the PSP maximum. The Chair's letter records that the policy approved at the 2024 AGM was adopted from [date], so the overview, the 2025 implementation table and the 2025 scenario chart all describe the same policy; the 2022-24 PSP outcome table, which also uses 25%, relates to an award granted under the earlier policy and is not relied on.
none needed; one-third and 30% are different rates, and 30% and 25% are different threshold levels.
The full approved policy sits in the 2023 Annual Report, which was not read for this point; the operative figures elsewhere in this report are 30% deferral and 25% threshold vesting.
Management’s best defence, and our reply
The company could say the policy overview is a voluntary abridgement and that the full approved policy in the 2023 Annual Report governs, so a slip in the summary changes no entitlement. It could add that the reduced deferral rate was applied to no director in 2024, because the 2024 bonuses were deferred at one-half, and that threshold vesting is set award by award in the targets the Committee publishes; the 25% in the 2022-24 outcome table belongs to an award made under the earlier policy. However, the overview is presented as the key features of the approved policy and is the page the Chair's letter cites for details, and its two figures differ from those the rest of the report states and applies, so the two descriptions cannot both be right.
The fix
- Correct the policy overview to read: "[wording masked], 30% rather than 50% of the bonus is deferred" and "For threshold performance, 25% of the maximum will vest" (or state the approved figures if they differ, and align the other pages).
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | Policy overview gives one-third as the reduced deferral rate | Document | Annual Report 2024, page 143 |
| 2 | Chair's letter gives 30% and sends the reader to page 143 | Document | Annual Report 2024, page 137 |
| 3 | 2025 implementation table gives 30% | Document | Annual Report 2024, page 146 |
| 4 | Annual Incentive Plan outcome page gives 30% | Document | Annual Report 2024, page 157 |
| 5 | Policy overview gives 30% PSP vesting at threshold | Document | Annual Report 2024, page 143 |
| 6 | 2025 scenario chart values threshold at 25% of the PSP maximum | Document | Annual Report 2024, page 147 |
| 7 | The proposed policy table cuts the deferral to 20% once a [name] CEO holds [n]% of salary | Document | Annual Report 2025, page 158 |
| 8 | [wording masked] [name] CEO is [n]% of salary | Document | Annual Report 2025, page 161 |
| 9 | The Chair's letter ties the 20% deferral to meeting the shareholding requirement, which for the CEO is [n]%, not [n]% | Document | Annual Report 2025, page 151 |
Prepared by Pramanex from the company’s published annual reports, without the company’s involvement, to show how an annual report review reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other assurance engagement, and not legal advice. A regulator-style question is a question, not a conclusion.
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