2.13 The share price appreciation shown for the Chief Executive's vested Restricted Share Plan tranche cannot be reproduced from the published award price
UK Company A · a UK-listed medical technology group · Regulator-style question
In brief
The Restricted Share Plan (RSP) vesting table splits the [amount] value [wording masked] Chief Executive's 2024 award into [amount] at award price and [amount] of share price appreciation. The 2024 report gave the award price as [amount] a share. On the [n] shares that vested, that price gives [amount] at award price and about [amount] of appreciation; converting the sterling award price of [amount] at the [amount] rate the same report uses for the Performance Share Plan (PSP) gives about [amounts]. Neither basis, nor any other printed in the report, reproduces [amount], and the appreciation figure is one the law requires.
The evidence, as filed
Further pages withheld to protect the company’s identity (three): Annual Report 2025, page 182; Annual Report 2024, page 162; Annual Report 2025, page 175. 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 RSP vest, Chief Executive: [n] shares, value at award price [amount], share price appreciation [amount], total [amount]; no award price given for the calculation. | What the rule requires The value at award price and the appreciation worked from the award price of the 2024 RSP award ([amount] a share as published, about [amounts]; or [amount] at the [amount] rate used for the PSP, about [amounts]), or a note giving the different price used and why. |
The rule
SI 2008/410 Schedule 8 paragraph 12(2)
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
For every component the value of which is included in the sums required to be set out in the columns headed “c” and “d” of the table by paragraphs 7(1)(c) and (d), there must be set out after the table the relevant details.
SI 2008/410 Schedule 8 paragraph 12(3)(ca)
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
the amount of the award or, where this is not ascertainable, an estimate of the amount of the award, that is attributable to share price appreciation
Why it applies here: the total is right but the split between award-price value and appreciation looks overstated on the appreciation side by about [amount] to [amount] depending on the basis; the method used is not disclosed, so only management can say which figure is correct.
Why it matters
The law requires the part of each long-term award attributable to share price growth so that shareholders can see how much pay came from the share price rather than performance; a misstated split overstates that part for the Chief Executive's RSP vesting.
Exposure
Disclosure accuracy in the audited part of the remuneration report; no regulatory consequence expected for an amount of this size.
Our workings
the RSP table shows the first tranche of the 2024 award vesting on [date] as [n] shares, [amount] at award price, [amount] share price appreciation and [amount] in total. Footnote 6 to the single figure table values the [n] shares at the vest price of [amount]. The 2024 report states that the 2024 RSP award share price was [amount] (Annual Report [amount].162). For the 2023-25 PSP the same 2025 report computes value at award price as total vesting shares, including dividend shares, times the award price of [amount] converted at [amount] ([amount], and appreciation as shares times the rise to the estimated vest price ([amount].
at the published award price the RSP tranche gives [n] x [n] = about [amount] at award price and [n] x ([n] - [n]) = about [amount] of appreciation; converting [amount] at the PSP rate of [amount] gives [amount] a share, about [amounts]. Both pairs add to the printed [amount]. The printed [amount] implies an award price of [amount] a share on all vesting shares, which appears nowhere in either report.
| Item | Computation | Result ([amount] |
|---|---|---|
| PSP 2023-25 value at award price (company method) | [n] x [n] | [n] (printed [n]) |
| RSP at published award price: value; appreciation | [n] x [n]; [n] x ([n] - [n]) | [n]; [n] (sum [n]) |
| RSP with the sterling award price at the PSP rate of [n]: price; value; appreciation | [n] x [n] = [n]; [n] x [n]; [n] x ([n] - [n]) | [n]; [n] (sum [n]) |
| Award price implied by printed [n] on all vesting shares | [n] / [n] x [n] | [n] per share |
| Difference in appreciation, published price basis | [n] - [n] = [n]; [n] / [n] | [n] ([n]%) |
| Difference in $ million against 2025 profit before tax | [n] / [n] = [n]; [n] / [n] | [n]% |
Management’s best defence, and our reply
The company could say that the award price for this calculation is properly the [currency] value of the award at grant converted at a different exchange rate or grant-date price, and that the law allows an estimate of the appreciation where the exact amount is not ascertainable. It could add that the total of [amount] in the single figure is correct, so no audited total is affected. However, the report does not state any such price, the only published award price ([amount] and the same report's own PSP method both give about [amount], and no rate or price that appears in either report reproduces [amount], so the question is whether the split was computed on the stated basis.
The fix
- Recompute the split on the published award price and state it: 'Value at award price is based on the award price of [amount] ([amount]; share price appreciation is the vest price of [amount] less the award price, times the shares vesting.'
Question for the company
Please state the award price per share used to compute the [amount] value at award price for the first tranche of the 2024 RSP award, and why it differs from the [amount] award price given in the 2024 report; if the published price applies, please confirm that the share price appreciation is about [amount] rather than [amount].
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | The vesting reported is the first tranche of the 2024 award | Document | Annual Report 2025, page 182 |
| 2 | Total shares vesting [n]; value at award price [amount]; share price appreciation [amount]; total [amount] | Document | Annual Report 2025, page 182 |
| 3 | Footnote 6: vest price [amount] used for the [n] RSP shares | Document | Annual Report 2025, page 175 |
| 4 | Footnote 6: [n] RSP shares plus [n] dividend shares | Document | Annual Report 2025, page 175 |
| 5 | The only published award price for the 2024 RSP award: [amount] a share | Document | Annual Report 2024, page 162 |
| 6 | PSP 2023-25 row: [n] total shares, [amount] at award price, [amount] appreciation, [amount] total | Document | Annual Report 2025, page 181 |
| 7 | PSP award price [amount]: value at award price = all vesting shares x award price | Document | Annual Report 2025, page 181 |
| 8 | PSP estimated vest price [amount] used for the appreciation | Document | Annual Report 2025, page 181 |
| 9 | The PSP award price is the sterling price converted at [amount] | Document | Annual Report 2025, page 181 |
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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