LONDON (ShareCast) - Struggling fund manager New Star Asset Management has announced details of its new staff incentive plan.
Selected executives of the New Star group, currently numbering 35 and excluding the chairman and chief executive, will participate in a performance-based share plan.
Under the terms of the plan the participants will acquire new shares and will benefit from the growth in value of those shares (less a carrying cost of 5% per annum) subject to performance targets being met.
For the purposes of making awards under the plan, 35m new New Star shares (“plan shares”) will be issued. The newly issued shares represent 15% of the current issued share capital of New Star.
The plan shares will be purchased at the prevailing market price by the participants and the New Star Employee Benefit Trust (EBT) with the EBT paying all but a penny of the cost of each share.
The incentive scheme will run until the end of 2012.
In addition to the share plan, New Star proposes to adopt a performance-related cash bonus plan in which all of the group's employees will be eligible to participate.
The company expects annual cash cost of the cash bonus plan will be in the range of £5m to £10m.