2.10 Directors' Performance Share Plan interests add awards shown at maximum to awards restated to target in a single total
UK Company A · a UK-listed medical technology group · Regulator-style question
In brief
The outstanding-awards table now shows the 2023 and [date] Performance Share Plan (PSP) awards 'at target', restated from the maximum shown last year, while the 2025 and [date] awards stay at maximum. The two bases are added into one total of [n] PSP shares for the Chief Executive, which the directors' interests table repeats. On last year's maximum basis the same four awards total [n] shares (Chief Financial Officer: [n] shown against [n]). For the [date] award, [n] shares that can still vest are no longer shown; the 2023 award's performance period has ended and it vests at [n] shares, below both figures.
The evidence, as filed
Further pages withheld to protect the company’s identity (three): Annual Report 2025, page 183; Annual Report 2024, page 162; Annual Report 2025, page 181. 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.
Names, figures, dates, logos and any wording that could be searched back to the company are boxed out in grey; the point is highlighted in yellow.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows Chief Executive PSP: [n] and [n] (granted at maximum) plus [n] and [n] (granted at target, restated) = [n] in the outstanding-awards and interests tables; the 2024 report showed [n] and [n] for the two restated awards. | What the rule requires Scheme interests shown on one basis, normally the [wording masked] vest, with the total on that basis, or each basis shown in its own column with its own total. |
The rule
SI 2008/410 Schedule 8 paragraph 17(b)(ii)-(iii)
Version relied on: Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410), in force from April 2008, as amended (the directors’ remuneration report Schedule 8 as substituted from October 2013); revised text, legislation.gov.uk
total number of scheme interests differentiating between— (aa) shares and share options; and (bb) those with or without performance measures; (iii) details of those scheme interests
Why it applies here: the totals in both tables add numbers on two different bases, so the total is neither the target nor the maximum number of shares under the directors' outstanding PSP awards, which is what a reader uses the scheme-interest totals for.
Why it matters
The scheme-interest totals in the audited interests table mix two bases, so they show neither the target nor the maximum number of shares under the executive directors' PSP awards, and the year-on-year movement in interests cannot be read because the basis changed for some awards only.
Exposure
Disclosure clarity in the remuneration report; no regulatory consequence expected.
Our workings
the outstanding-awards table lists the Chief Executive's PSP awards of [date] ([n]) and [date] ([n]) with footnote 3 'Granted at maximum', and those of [date] ([n]) and [date] ([n]) with footnote 4 'Granted at target. Restated from 2024, [wording masked]', and totals them at [n]. The interests table repeats [n] and, for the Chief Financial Officer, [n]. The awards-granted table says 'Awards are granted at maximum'. The 2024 report showed the [date] and [date] awards at [n] and [n] and the Chief Financial Officer's 2024 award at [n] (Annual Report [amount].162). The 2023-25 vesting table applies [n]% of target to [n] shares, which equals [n]% of maximum.
[n] / 2 = [n] and [n] / 2 = [n], so the restated figures are exactly half the maximum; the four awards at maximum total [n] shares against [n] shown, a difference of [n]; the Chief Financial Officer's two awards at maximum total [n] against [n] shown. The 2023 award's performance period ended on [date] and it vests at [n]% of target, [n] shares, so for that award the maximum is no longer attainable and the restated target figure ([n]) is itself above the outcome; the understatement on the maximum basis therefore applies with full force only to the [date] awards ([n] for the Chief Executive, [n] for the Chief Financial Officer).
| Item | Computation | Result (shares) |
|---|---|---|
| [date] award: 2024 report / 2025 report | [n] / 2 | [n] |
| [date] award: 2024 report / 2025 report | [n] / 2 | [n] |
| Chief Executive total as shown (mixed bases) | [n] + [n] + [n] + [n] | [n] |
| Chief Executive total at maximum | [n] + [n] + [n] + [n] | [n] |
| Difference on the maximum basis | [n] - [n] | [n] |
| Chief Financial Officer total as shown | [n] + [n] | [n] |
| Chief Financial Officer total at maximum | [n] + [n] | [n] |
| 2023-25 award outcome (target basis) | [n] x [n]% | [n] |
| Same outcome on maximum basis | [n] x [n]% | [n] |
| Reported less maximum basis | [n] - [n] | -[n] |
| Difference as % of the maximum | [n] / [n] | [n]% |
Management’s best defence, and our reply
The company could say that under the plan rules in force when the 2023 and [date] awards were made the award was expressed as a target number of shares with up to twice that number vesting, so the restated figures are the legal award, and that both bases are footnoted so nothing is hidden. It could add that the law asks only for the 'total number of scheme interests' and does not say whether target or maximum is to be used. However, the same report describes PSP awards as granted at maximum, last year's audited table used maximum for these same awards, and adding target and maximum numbers in one total produces a figure that is neither, so a single stated basis is needed.
The fix
- Show every outstanding PSP award at the [wording masked] vest (or add a column at maximum), and say: 'All PSP awards are shown at maximum; target vesting is 50% of the number shown.'
Question for the company
Please explain why the 2023 and [date] PSP awards are now shown at target while the 2025 and [date] awards are shown at maximum, and state each director's outstanding PSP awards on one basis (with the 2023 award at its tested outcome if preferred).
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | 2025 PSP award shown at [n] shares, footnote 3 (granted at maximum) | Document | Annual Report 2025, page 183 |
| 2 | [date] PSP award [n] shares at maximum | Document | Annual Report 2025, page 183 |
| 3 | [date] PSP award shown at [n], footnote 4 (target) | Document | Annual Report 2025, page 183 |
| 4 | 2023 PSP award shown at [n], footnote 4 (target) | Document | Annual Report 2025, page 183 |
| 5 | Footnote 4: two awards restated from maximum to target | Document | Annual Report 2025, page 183 |
| 6 | Footnote 3: the other awards are at maximum | Document | Annual Report 2025, page 183 |
| 7 | Chief Financial Officer's [date] award shown at target, [n] | Document | Annual Report 2025, page 183 |
| 8 | Chief Financial Officer's 2025 award at maximum, [n] | Document | Annual Report 2025, page 183 |
| 9 | Interests table: PSP awards with performance conditions [n] for the Chief Executive | Document | Annual Report 2025, page 184 |
| 10 | Interests table: PSP awards [n] for the Chief Financial Officer | Document | Annual Report 2025, page 184 |
| 11 | The report's own description of PSP awards: granted at maximum | Document | Annual Report 2025, page 182 |
| 12 | 2023-25 award vests at [n]% of maximum ([n]% of target applied to [n]) | Document | Annual Report 2025, page 181 |
| 13 | 2024 report: the same two awards shown at [n] and [n] (maximum) | Document | Annual Report 2024, page 162 |
| 14 | 2024 report: Chief Financial Officer's [date] award at [n] | Document | Annual Report 2024, page 162 |
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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