Source - LSE Regulatory
RNS Number : 5416X
Virgin Money UK PLC
05 May 2021
 

Virgin Money UK PLC

(Company)

 

LEI: 213800ZK9VGCYYR6O495

 

5 May 2021

 

2020 Long-term Incentive Plan Financial Targets Update

 

At the time of publication of the Directors' Remuneration Report alongside the Virgin Money UK PLC 2020 Annual Report & Accounts, the material uncertainty in economic backdrop meant it was not possible to set quantitative 3-year targets.  The VMUK PLC Remuneration Committee was therefore not in a position to propose the specific targets that underpin the financial elements of the 2020 Long-term Incentive Award (LTIP) but committed to updating shareholders on its approach and key metrics within six months.

 

Following that commitment, and after careful consideration in consultation with major shareholders, the Committee is pleased to provide an update on the performance measures and weightings that will apply. These remain broadly aligned with the measures and weightings applicable to the FY2019 LTIP Award and central to the delivery of the Group's long-term strategy. The measures, weightings and targets for the 2020 LTIP (with performance assessed at the end of FY2023) will be as follows.

 

Strategic Pillars      

Measures


Weighting

Threshold

Target

Max

Pioneering Growth

Relationship Deposit Growth1

10.00%

4

5.5

7

Super Straightforward Efficiency

CIR2

10.00%

53

50

47

Operating Cost Outcome (£m)2

10.00%

810

780

750

Disciplined and sustainable

ROTE3

25.00%

6.0

8.0

10.0

Risk Scorecard

20%

Remuneration Committee assessment against qualitative and quantitative measures4

Delighting Customers and Colleagues

ESG Scorecard

15.00%

Remuneration Committee assessment against qualitative and quantitative measures5

CMA Ranking 

10.00%

 Top 5

Top 3

Top 2

Total


100%




 

1 Compound Annual Growth Rate (CAGR) 2020 - 2023

2 CIR and operating costs are on an underlying basis.

3 RoTE calculated on a statutory basis.

4 Performance will be assessed by the Committee based on several qualitative and quantitative inputs such as feedback from the Chair of the Board of the Risk Committee and achievement of the long-term objectives of the organisation. Specific focus will be on customer complaints, credit risk policy compliance, operational risk losses and cost of risk.

5 Performance will be assessed by the Committee based on several qualitative and quantitative measures such as operational carbon emissions, senior leadership diversity and colleague engagement. Our aim is to develop a more sophisticated set of metrics over time.

 

The LTIPs are based on a broad framework of financial and non-financial targets to ensure a balanced range of considerations. The targets have been established based (where practical) on market consensus, at the time of proposal, in the absence of formal company targets for 2023.

 

The Remuneration Committee remains cognisant of the uncertain market conditions under which these awards are made and retains discretion in ensuring that the final outcome reflects the performance of the Group and considers all relevant factors.  This includes taking any steps necessary to mitigate excessive windfall gains.  Given the level of uncertainty in the economy over the short to medium term the Committee will make this assessment at the time of vesting, at which point the Committee will describe the factors considered and what discretion (if any) that was applied.

 

Announcement authorised for release by Lorna McMillan, Group Company Secretary.

 

For further information, please contact:

 

Investors and Analysts


Richard Smith

07483 399303

Interim Head of Investor Relations

richard.smith@virginmoneyukplc.com



Company Secretary


Lorna McMillan

07834 585 436

Group Company Secretary

lorna.mcmillan@virginmoneyukplc.com



Media Relations


Press Office

0800 066 5998


press.office@virginmoneyukplc.com

 

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