Latest news on this campaign can be found towards the bottom of this page.
This campaign is now closed.
This campaign was launched in March 2012 although the source of the complaints goes back to August 2011. The following information was issued in a press release:
ShareSoc Launches Attack on Unjustifiable LTIP Award at Intercede Group Plc
ShareSoc (the “UK Individual Shareholders Society”), has launched a Shareholder Action Group in relation to Intercede Group Plc. Intercede announced a Long Term Incentive Plan (“LTIP”) in August 2011.
In the view of ShareSoc, and the shareholders whom we represent, this LTIP demonstrates many of the aspects that are abhorrent in the current system of remuneration in public companies. The problems are:
- The award of nominal cost share options (effectively free shares) which simply transfers a part of the value of the company to the beneficiaries of the LTIP and dilutes other shareholders. Such awards do of course breach the Association of British Insurers (ABI) guidelines as they are recognised as being prejudicial to shareholders interests.
- The failure of the company to consult widely with shareholders on this change in remuneration before it was implemented, and the apparent reluctance to give them a vote on the matter (the company has not responded to our requests that they do so).
- The failure to initially disclose the performance conditions attached to the LTIP, which when they were eventually disclosed show quite low hurdles, and in reality are not focused on the key aspects of the company that require development – in essence they are illogical and poorly thought out. The LTIP simply looks like a disguised pay increase to us.
- The reluctance of the company to engage with shareholders on this issue in any substantive way, or to make changes in response to our complaints.
There are many aspects of this matter which are questionable in the extreme – for example, the main beneficiaries of the award are the Executive Chairman, Richard Parris and his wife (who is also a senior executive in the company).
In our view, the LTIP award demonstrates both the problems with having board directors set their own pay and the poor corporate governance of AIM companies. It is a very good example of what needs to be changed if the interests of shareholders and the wider community are not to be undermined by decisions made by board directors that appear to be mainly in their personal interests rather than the company’s.
Shareholder Action Group Formed
ShareSoc intends to garner more support on this issue over the coming months with a view to a further challenge to the board at a forthcoming General Meeting. Any shareholders in Intercede who wish to join our group should contact us.
Although the directors and Mr Parris may see our campaign as a distraction, we suggest that they only have themselves to blame for not responding to shareholders’ concerns that have been expressed over many months. We have given them some suggestions about how shareholders’ concerns might be assuaged, but they have been ignored. Shareholders are not going to accept remuneration schemes in the current economic climate that pay out substantial sums to executive teams for no good reason.
A note that explains the issues in more detail, and provides more background, is present in this pdf document: Intercede Note.
One issue at this company is that Richard Parris has claimed he is underpaid. This article has been published on the ShareSoc Blog and tends to refute that suggestion: Comparative Pay
This note was issued on the 12th June 2012 to comment on the Preliminary Results announcement: Update_3
ShareSoc recommends VOTING AGAINST the re-
On the 21st August Intercede announced that the LTIP conditions were being substantially revised. The e.p.s. Performance target has been replaced by one solely based on share price, the vesting conditions changed and the option price effectively raised if an offer is made for the company. We issued the following Press Release welcoming these changes soon after: Press033. The ShareSoc campaign has obviously been successful in obtaining some changes.
AGM Report –
A brief report on the Annual General Meeting of Intercede on the 26th September 2012 is given in this document: Update_5
On the 1st Feb 2013, Intercede issued a profit warning. Essentially it said orders were being deferred, and hence revenues will be flat and profits non existent for the current year. ShareSoc issued this note on the subject: Update_6
Annual Results and AGM Voting Recommendations
On the 21st June 2013, this note was issued commenting on the annual financial results and giving voting recommendations for the Annual General Meeting: Update_7. It is unlikely we will make further comments on this company unless more substantial news arises in future.