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Rothschild & Co | Annual Report 2017
The schemes implemented (the “Equity Schemes”) also include a
characteristic specific to the Company, insofar as the intended beneficiaries of
options are required to buy Rothschild & Co shares beforehand in order to be
granted options. According to the rules and regulations of each Equity Scheme:
• shares are invested beforehand in the form of the direct purchase of
Rothschild & Co shares, or in the form of the award of restricted share
units, giving holders the right to receive Rothschild & 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; and
• 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.
Furthermore, the 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 rules and regulations.
Within the framework of this delegation of authority and characteristics
specific to the Company, three Equity Schemes have been implemented
and remained in force as at 31 December 2017.
2.3.2 Equity Scheme implemented on 11 October
2013
The Equity Scheme implemented on 11 October 2013 (the “2013 Equity
Scheme”) was intended for some Global Advisory partners, as well as the
members of the Group Executive Committee (formerly named the Group
Management Committee), representing a total of 57 people operating in
10 different countries around the world.
In accordance with the aforementioned rules and regulations for the 2013
Equity Scheme, participants have been required to invest in a total of
780,000 Rothschild & Co shares, representing 1.10% of the Company’s
share capital at the grant date.
For each Rothschild & Co share invested, four stock options were awarded.
In accordance with the authorisation granted by the General Meeting of
shareholders on 26 September 2013, the Company’s Managing Partner
decided, on 11 October 2013, to grant a total of 3,120,000 stock options.
The options granted under the 2013 Equity Scheme are classified into four
distinct categories, the Options 2013-1, the Options 2013-2, the Options
2013-3 and the Options 2013-4, respectively vesting 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 share subscription or by share purchase (the exercise option being decided
by the Company’s Managing Partner before the start of the exercise period).
By decisions on 23 September 2016, the Company’s Managing Partner
decided that all participants wanting to exercise the Options 2013-1 could
exercise their options by subscription of newly issued Rothschild & Co’s
shares only.
By decisions on 28 September 2017, the Company’s Managing Partner
decided that all participants wanting to exercise the Options 2013-2 could
exercise their options by share purchase only.
During the 2017 financial year, 107,500 Options 2013-1 and 112,500
Options 2013-2 were exercised respectively and 20,000 Options 2013-1,
20,000 Options 2013-2, 20,000 Options 2013-3 and 20,000 Options
2013-4 were forfeited due to the departures of two beneficiaries.
2.3.3 Equity Scheme implemented on
9 December 2015
Following on from the 2013 Equity Scheme, on 9 December 2015, Rothschild
& Co implemented a second incentive scheme (the “2015 Equity Scheme”),
for which participation was extended to some Wealth Management and
Merchant Banking partners, representing a total of 10 participants.
In accordance with the aforementioned terms and conditions, 115,000
Rothschild & 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 Rothschild & Co share invested,
four stock options were awarded.
As a result, the Company’s Managing Partner decided, on 9 December
2015, to grant a total of 460,000 stock options.
The options granted under the 2015 Equity Scheme are classified into four
separate categories, the Options 2015-1, the Options 2015-2, the Options
2015-3 and the Options 2015-4, 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 share subscription or by share purchase (the exercise
option being decided by the Company’s Managing Partner before the start
of the exercise period).
2.3.4 Equity Scheme implemented on
13 December 2017
Following on from the 2013 and 2015 Equity Schemes, on 13 December
2017, Rothschild & Co implemented a third incentive scheme (the “2017
Equity Scheme”), for which participation was extended to some Rothschild
Asset Management partners and some senior employees having a
cross-divisional role in the Rothschild & Co Group, representing a total
of 20 participants.
In accordance with the aforementioned terms and conditions, 277,500
Rothschild & Co shares, representing 0.36% of share capital on the date
of the 2017 Equity Scheme, were invested in this way.
As with the previous 2013 and 2015 Equity Schemes, for each Rothschild
& Co share invested, four stock options were awarded.
As a result, the Company’s Managing Partner decided, on 13 December
2017, to grant a total of 1,110,000 stock options.
The options granted under the 2017 Equity Scheme are classified into four
separate categories, the Options 2017-1, the Options 2017-2, the Options
2017-3 and the Options 2017-4, acquired respectively on the third, fourth,
fifth and sixth anniversaries of the 2017 Equity Scheme, and exercisable
on the vesting dates at a price of €31.56, €32.06, €33.06 and €34.06 per
option, either by share subscription or by share purchase (the exercise option
being decided by the Company’s Managing Partner before the start of the
exercise period).
For all the participants holding any executive officer position in an entity
of the Rothschild & Co Group on the grant date, the exercise of the options
is conditional upon the achievement of a performance condition. The
performance condition depends on the entity in which the beneficiary
is a Global Partner. For the participants who are not a Global Partner
at Rothschild Martin Maurel on the grant date, the participants shall
have been effectively granted variable remuneration with respect to each
fiscal year closed on or after 31 December 2016 or 31 March 2017 (as
applicable, depending on the closing date of the fiscal year of the relevant
Rothschild & Co entity) and before the opening of the relevant exercise
period (or the date of the death in case of the death of a participant).
Information on the Company and share capital
(1) Within the framework of restricted share units under the Equity Scheme, a number of Rothschild & Co shares were acquired by Group entities in which Equity Scheme participants hold management or
executive roles. These shares, intended to be awarded to holders of restricted share units after the vesting date and subject to certain conditions, are currently – and until the vesting date – treasury shares
and therefore do not bear any voting rights.