The client was a resources company that had a practice of offering large numbers of options to most employees. Shareholders formed the view that the total number of options outstanding was excessive and potentially too dilutive. GRG was engaged to review their top executive remuneration arrangements.
GRG recommended a middle of the road policy for Base Packages combined with STI and LTI target award opportunities that would achieve very competitive total remuneration packages if target performance were achieved. It still allowed high remuneration levels to be realised but only if outstanding performance were achieved. The LTI plan was changed from an option plan to a Rights plan with vesting conditions aligned to delivering value for shareholders. The Rights were less dilutive than options and provided greater certainty to executives as to receiving value when vesting occurred.