City broker TP Icap scales down executive rewards plans after shareholder challenge on remuneration

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TP Icap was founded as a result of Tullett Prebon's acquisition of the voice broking business of Icap, which is now known as Nex (Source: William Turvill/ City A.M.)

Newly-formed City broker TP Icap has scaled down its long-term incentive scheme after initial remuneration proposals were challenged by investors.

It emerged in February that TP Icap, which was founded as a company at the end of last year when Tullett Prebon bought Icap’s voice broking business, was coming under pressure over its executive pay plans.

The proposed scheme would have paid up to £85m in shares over a three-year period. The annual report today revealed that the three-year long-term incentive plan total pool has been reduced to £60m.

Read more: TP Icap: Brexit means we'll move operations out of the UK to the EU

The maximum pool, dependent on performance targets, is shared between the chief executive John Phizackerley, whose maximum is £15m, the chief financial officer and the global executive committee.

At the end of the three-year period, the pool will be determined and converted into share awards, which will be released in three tranches, in April 2021, April 2022 and April 2023.

A TP Icap spokesman said:

TP Icap is a newly-formed company and we have been in consultation with our shareholders about creating a remuneration policy that is closely aligned to long-term shareholder value and stretching integration targets.

In December, we made some initial proposals to shareholders and have since been out to listen and engage with them. We heard what they had to say and consequently made a number of amendments to our initial proposal, which provide a powerful alignment of interests between management and shareholders.

Read more: TP Icap told to go back to the drawing board on exec pay plans

Phizackerley’s total remuneration in 2016 was £3.38m, up from £2.25m, the company’s annual report today showed. The 2016 package included a salary of £550,000 and a bonus of £2.61m.

Under the new terms, Phizackerley’s salary has been increased to £600,000, but his maximum bonus 2.5 times this, meaning he could earn no more than £2.1m a year, minus the long-term incentive reward.

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