WOOD has scrapped share awards made to chief executive Robin Watson and finance chief David Kemp potentially worth around £400,000 after facing opposition from shareholders.
The Aberdeen-based engineering giant said the board and the two directors had mutually decided to cancel awards made to the men under the company’s long term incentive plan following additional shareholder engagement.
The company made conditional awards in April after increasing the maximum payable to 250 per cent of salary, from 200%, in the case of Mr Watson. The maximum award payable to Mr Kemp increased to 200% of salary from 175%.
“Although we have received some support, we have listened to many of our shareholders and have decided to cancel the awards at the higher level,” said the company yesterday.
It added: “We took soundings from a cross section of shareholders – as you would expect there were a range of views but, on balance, we decided it was appropriate to revert back to the original award level.”
The decision to reissue the awards at the previous participation levels meant Mr Watson was granted options to acquire 263,611 shares at nil cost subject to performance conditions, rather than 329,513.
The maximum potential value of the awards based on yesterday’s closing price of 456.2 p fell to £1.2 million from £1.5m.
Mr Kemp was granted options to acquire 146,084 shares rather than 166,953. The maximum value of the awards fell to £0.66m from £0.76m.
Wood said it had originally decided to increase the maximum number of awards because it was very concerned about longer term retention for senior management, including executive directors, and the external competitive environment for talent.
“The retention issue for our executive directors and senior management remains. We stand by our principles to ensure we incentivise and motivate them in the long- term to deliver the business strategy,” said Wood, adding. “We look forward to engaging with shareholders on alternative incentive vehicles.”
In Wood’s 2018 remuneration report the company said the increase in the maximum awards payable to Mr Watson and Mr Kemp for the 2019-21 performance period came after awards for preceding periods failed to vest. The company said the targets concerned had failed to accurately predict the length and depth of the downturn in the oil and gas sector, from 2014.
Wood’s remuneration report was approved by 96.46% of votes cast at last year’s general meeting.
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