Wealth manager St James’s Place is reviewing the way one of its executive bonus schemes is awarded following criticism from some shareholders.

SJP issued a Stock Exchange statement today saying it would review the way the Performance Share Plan (PSP) scheme was awarded.

In future, it will consider prior to the grant of any PSP bonus whether an adjustment to the size of awards should be made, depending on the share price performance, and will also aim to improve its communication of the bonus.

The board says it will continue to engage with shareholders and will “reflect their feedback, as appropriate in the 2023 Directors' Remuneration Report.”

The move suggests SJP accepts some shareholder concerns about the award of the 2020 Performance Share Plan grant.

At the company’s AGM in May 20% or more of shareholders voted against the Directors' Remuneration Report for the year ended 31 December 2022 although nearly 80% of votes were cast in favour, the company’s board pointed out. With most AGM votes receiving overwhelming majorities the vote was seen as a criticism of the report.

Shareholder concern centred on the vesting outcome of the 2020 Performance Share Plan (PSP) scheme. 

Some shareholders felt that the SJP Remuneration Committee should have applied a discretionary downward adjustment to the performance-based vesting outcome to take account of the fall in share price at the time of grant in 2020 and the effect of this on the number of shares granted.

They also wanted a better explanation of the scheme’s outcome by the committee. 

In a Stock Exchange statement today, SJP said: “The Remuneration Committee engaged with shareholders, both in preparation for, and shortly after the AGM and was pleased to note that most shareholders supported Resolution 4 which was evident from the voting outcome. Specific feedback has also been sought from the minority of shareholders who voted against Resolution 4.  

“The Committee had provided an explanation in the Remuneration Report of the reasons for not applying a downward adjustment, including that the Committee had already exercised discretion to award zero annual bonuses for 2020 and to hold the 2020 PSP grants at the same percentage of salary as in 2019 rather than the higher level approved in the 2020 Policy vote.  

“Applying a reduction to the vesting outcome in addition to the restraint already referred to above, risked damaging the credibility of the PSP also bearing in mind that no reciprocal upward adjustment could have been made in a previous year when the share price had 'spiked' at the time of grant resulting in a reduced number of shares being awarded.”

The committee says it believes it acted in the best interests of the company and its stakeholders in not applying a downward adjustment to the performance-based vesting outcome. 

In October the company announced a major review of its charges.

SJP’s share price has fallen by 38% this year to 688p.