The provisions in this Bill with regard to executive pay in takeover situations have been amended again. The recently added provisions on freezing the value of executive shares or options during takeovers have been changed.
The current proposal is that, at the time that the public offer is announced, the company determines whether the shares, depositary receipts or options have increased in value. This determination concerns shares, depositary receipts or options granted to the director by way of remuneration.
The moments at which the value is determined are:
- four weeks before the day that the public offer is announced
- four weeks after the completion of the offer
- on the day that the director disposes of his shares, depositary receipts or options or the day that his appointment ends
If there is an increase in value, this amount will be deducted from the director's pay, but subject to a maximum. This maximum is the increase in value between the first moment – four weeks before the announcement - and the second moment – four weeks after the offer's completion. Shares which the director bought himself or inherited do not fall under the Bill's provisions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
