Paddy Power has asked its shareholders to approve the adoption of a new long-term incentive plan (L-tip) for 2013.
The bookmaker’s annual report highlighted that its 2004 L-tip will expire in mid-2014. The organisation’s board has proposed the introduction of a new L-tip to replace and update it.
The new L-tip will operate through an employee benefit trust (EBT), which will purchase shares on the market, but may also source shares through subscription from the organisation.
Share incentives will only vest if, over a three-year period, the organisation’s earnings-per-share increases by between a compound 7% and 15% per annum, with 25% of a share incentive allocation vesting at the lower end of this range, and 100% vesting at the upper end of this range.
The report stated: “Following the review of executive remuneration, the committee concluded that the current L-tip has served the company well over the last nine years and has been one of the key drivers of the outstanding growth that Paddy Power has delivered for shareholders. The proposed L-tip is therefore broadly similar to the current scheme.
“The changes in the new L-tip, such as the introduction of clawback provisions on unvested awards, the removal of automatic full vesting on a change of control, and the exclusion of retesting provisions, which the committee also removed last year from the current L-tip, aim to better align the plan with the interests of shareholders and best-practice guidelines.”