2.13 The Chief Executive's 2025 performance share award equals 581% of salary at the stated grant price, not the [n]% the report states
UK Company B · a UK-listed technology and logistics group · Regulator-style question
In brief
The report says the 2025 Performance Share Plan (PSP) awards had overall maximum values of [n]% of salary for the Chief Executive Officer (CEO) and [n]% for the Chief Financial Officer (CFO). At the stated [amount] grant-calculation price the CFO's award is exactly [n]% of salary, but the CEO's award of [n] shares (face value [amount]) is 581% of his [amount] salary. The report does not say what other price, salary or cap set the number of shares.
The evidence, as filed
Screenshot withheld to protect the company’s identity: Annual Report 2025, page 146; Annual Report 2025, page 155; Annual Report 2025, page 144. 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 CEO 2025 PSP: [n] shares, face value [amount] = 581% of [amount] (stated maximum [n]%); CFO 2025 PSP: [n] shares, face value [amount] = [n]% of [amount] (stated [n]%) | What the rule requires A CEO award that reproduces from the stated [n]%, salary and price, or a note giving the basis actually used to set the number of shares (price, salary date, cap or limit) |
The rule
SI 2008/410 Schedule 8, paragraph 14(1)(b)(ii)-(iii) and 14(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
(ii)a description of the basis on which the award is made; (iii)the face value of the award; ... “face value” means the maximum number of shares that would vest if all performance measures and targets are met multiplied by either— (a)the share price at date of grant or (b)the average share price used to determine the number of shares awarded.
Why it applies here: a different price, salary date, cap or plan limit may have been applied to the CEO's award, but the report does not say so, so the description of the basis of the award does not match the face value shown.
Why it matters
The audited award table cannot be reconciled to the stated policy percentage for the CEO's 2025 award, which appears to be below the stated maximum without explanation.
Exposure
A question on calculation basis; no penalty attaches.
Our workings
the PSP narrative says the base awards were [n]% and [n]% of salary with a maximum multiplier of 1.5x, '[wording masked] [n]% and [n]% of salary respectively'. The scheme-interest table gives the [date] awards as [n] shares (face value [n]) for the CEO and [n] shares (face value [n]) for the CFO, at a grant-calculation price of [amount], the three-day volume-weighted average. Salaries from [date] were [amounts].
the CFO's award equals [n]% of salary, so the stated price and method reproduce his award; the CEO's equals 581%, which is [n] shares short of the [n] shares that [n]% would give at the same price.
| Award | Computation | Result |
|---|---|---|
| Price implied by the printed CFO face value ([amount] rounded) | [n] / [n] = [n] | [amount] |
| CEO PSP 2025 as % of salary | [n] x [n] = [n]; / [n] | 581% |
| CFO PSP 2025 as % of salary | [n] x [n] = [n]; / [n] | [n]% |
| CEO shares for [n]% at [amount] | [n] x 6 / [n] | [n] |
| CEO PSP shares short of [n]% | [n] - [n] | [n] |
Management’s best defence, and our reply
The Committee would say award numbers are set under the plan rules, which may use a different averaging period, a salary at another date, or a cap under the plan or dilution limits, and that the face value column correctly multiplies the shares by the stated price; an award below the maximum harms no shareholder. Those are plausible explanations, which is why this is a question; the report should still state the basis, because the CFO's award matches its stated percentage exactly while the CEO's does not.
The fix
- Add a footnote giving, for the CEO's 2025 PSP award, the salary, percentage and price used to set the number of shares, and any cap or limit applied.
Question for the company
What salary, percentage and share price were used to set the number of shares in the CEO's 2025 PSP award, and why does the award equal 581% rather than the stated [n]% of salary when the CFO's award equals the stated [n]%?
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | Stated base and maximum PSP percentages | Document | Annual Report 2025, page 146 |
| 2 | CEO 2025 PSP award | Document | Annual Report 2025, page 155 |
| 3 | CFO 2025 PSP award | Document | Annual Report 2025, page 155 |
| 4 | CEO salary | Document | Annual Report 2025, page 144 |
| 5 | CFO salary | Document | Annual Report 2025, page 144 |
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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