Yahoo Finance City broking giant TP ICAP mulls changes to £85m share plan
A City broking firm created by the merger of two of the industry's biggest players has approached investors about revisions to an incentive plan that could hand tens of millions of pounds to senior executives.
Sky News has learnt that directors of TP ICAP, which is the world's largest interdealer broker, proposed establishing a scheme that would have paid out up to £85m in shares over a three-year period.
John Phizackerley, the company's chief executive, stood to make a maximum of £25m under the Value Creation Plan discussed with leading TP ICAP shareholders.
Under the proposals, which have been drawn up by Stephen Pull, the director who chairs the broker's remuneration committee, the plan would only begin paying out after almost £400m in shareholder value had been created.
A number of investors have nevertheless rebuffed the original framework, reflecting growing City sensitivity about executive pay at a time when ministers are digesting responses to a green paper on the issue.
"This was always presented as a consultation exercise, and the company has listened carefully to what investors have had to say," said one source familiar with the plan.
"The opposition to it was far from unanimous."
The scale of the potential maximum payout under the scheme was, at £85m, a significant sum, even in the lucrative arena of interdealer broking.
The precise number of executives who would participate in the Value Creation Plan is unclear, although it is understood that TP ICAP's chief financial officer, Andrew Baddeley, could have received up to around £15m under the plan.
Institutional investors are keen to restrict pay rises for public company bosses, and have already expressed anger in recent weeks at companies including the tobacco manufacturer Imperial Brands (LSE: IMB.L - news) and Thomas Cook (Frankfurt: A0MR3W - news) , the tour operator.
City shareholders such as Fidelity have published a series of proposals for generating greater accountability over pay, calling on the chairs of remuneration committees to stand down if they fail to command support from at least 75% of investors at annual meetings.
TP ICAP was created by Tullett Prebon (Frankfurt: N5C.F - news) 's £1.3bn takeover of the voice-broking business of ICAP (Frankfurt: A0BKYB - news) , the company run by former Conservative Party treasurer Michael Spencer and now renamed NEX Group.
The three-year Value Creation Plan proposed by the company would be tied to the success of the integration of the two businesses, and is partly designed to ensure the retention of key executives.
TP ICAP is performing strongly, with greater volatility in financial markets in the wake of Donald Trump's election benefiting revenues.
One source said that revisions to the plan had not yet been decided upon but pointed out that consultation over any new proposals would need to be conducted with a smaller group of investors because TP ICAP's annual report is due to be published in the next few weeks.
A TP ICAP spokeswoman declined to comment.
