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Rothschild & Co | Annual Report 2017
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1. Overview
4. Financial statements
3.
Management report
2. Business review
The schemes implemented also include a characteristic specific to the Company, insofar as the intended beneficiaries of options are required to buy R&Co
shares beforehand in order to be granted options. According to the regulations for each Equity Scheme:
• shares are invested beforehand in the form of the direct purchase of R&Co shares, or in the form of the award of restricted share units, giving holders
the right to receive R&Co shares after a set vesting date, subject to certain conditions
(1)
, or a combination of the two;
• for each share invested, beneficiaries are awarded a number of stock options;
• the shares invested are subject to a lock-up period of four years and stock options awarded are subject to a vesting period before being exercised.
It was also agreed that beneficiaries of these options can only exercise their options if they remain in their management or executive role within the Group
until the exercise date of the options, subject to some specific exceptions stipulated in the Equity Scheme regulations.
Within the framework of this delegation of authority and characteristics specific to the Company, three Equity Schemes have been implemented and were
still in force as at 31 December 2017.
B. EQUITY SCHEME OF 11 OCTOBER 2013
The Equity Scheme of 11 October 2013 (“2013 Equity Scheme”) was intended for certain senior employees of the financial advisory business with partner
status, as well as members of the Group’s Executive Committee (previously referred to as the Group Management Committee), representing a total of 57
people from ten different countries.
In accordance with the aforementioned regulations for the 2013 Equity Scheme, participants invested a total of 780,000 R&Co shares, representing 1.10%
of the Company’s share capital on the award date.
For each R&Co share invested, four stock options could be awarded.
In accordance with the authorisations granted by the general shareholders’ meeting of 26 September 2013, the Managing Partner decided on 11 October
2013 to grant a total of 3,120,000 stock options.
The options awarded within the framework of the 2013 Equity Scheme are classified into four separate categories, the 2013-1 Options, the 2013-2
Options, the 2013-3 Options and the 2013-4 Options, acquired respectively on the third, fourth, fifth and sixth anniversaries of the 2013 Equity Scheme,
and exercisable on the vesting dates at a price of €17.50, €18, €19 and €20 per option, either by subscription or purchase of shares (the exercise option
being decided by the Managing Partner before the start of the exercise period).
Pursuant to a decision dated 23 September 2016, the Company’s Managing Partner decided that all beneficiaries of the 2013-1 Options wishing to
exercise them must do so by subscribing for new shares.
Pursuant to a decision dated 28 September 2017, the Company’s Managing Partner decided that all beneficiaries of the 2013-2 Options wishing to
exercise them must do so by purchasing existing shares.
During the 2017 nine-month financial period, 107,500 2013-1 Options and 112,500 2013-2 Options were exercised and the Company cancelled 20,000
2013-1 Options, 20,000 2013-2 Options, 20,000 2013-3 Options and 20,000 Options 2013-4 owing to the departure of two beneficiaries.
C. EQUITY SCHEME OF 10 DECEMBER 2015
Following on from the 2013 Equity Scheme, on 9 December 2015, R&Co launched a second incentive scheme (the “2015 Equity Scheme”), for which
participation was extended to certain employees of the private banking, trust services, private equity and private debt businesses with partner status,
representing a total of ten participants.
In accordance with the aforementioned terms and conditions, 115,000 R&Co shares, representing 0.16% of share capital on the date of the 2015 Equity
Scheme, were invested in this way.
As with the 2013 Equity Scheme, for each R&Co share invested, four stock options could be awarded.
As a result, the Managing Partner granted a total of 460,000 stock options.
The options awarded within the framework of the 2015 Equity Scheme are classified into four separate categories, the 2015-1 Options, the 2015-2 Options, the
2015-3 Options and the 2015-4 Options, acquired respectively on the third, fourth, fifth and sixth anniversaries of the 2015 Equity Scheme, and exercisable on
the vesting dates at a price of €23.62, €24.12, €25.12 and €26.12 per option, either by subscription or purchase of shares (the exercise option being decided by
the Managing Partner before the start of the exercise period).
(1) In connection with the restricted share units under the Equity Scheme, a number of R&Co shares were acquired by Group entities in which Equity Scheme participants hold executive or management
roles. These shares, which are to be awarded to the holders of the restricted share units after the vesting date of the rights subject to certain conditions, are currently treasury shares that will not
carry any voting rights until the vesting date.