Insurer’s plan for non-exec directors

by IBO 15 Sep 2014

Insurer’s plan for non-exec directors

QBE Insurance Group has established a share acquisition plan to enable non-executive directors to increase their shareholding in the company.

The plan will operate by applying a portion of directors’ fees to acquire QBE shares on the Australian Securities Exchange at the prevailing market price.

The move was designed to encourage good governance principles as an increased shareholding in the company would create greater alignment with shareholder interests.

A number of checks are in place to ensure no breaches of the Corporations Act are made, including:

- directors only being able to build their shareholding to the value equivalent to one year’s base fees over a reasonable period of time;

- shares acquired under the plan are held by the plan trustee on behalf of directors who cannot then sell or deal with those shares until they cease being a director of the company;

- the plan is not an incentive scheme, does not operate to allow income tax deferral for directors and no discount is provided since shares are acquired on-market at the prevailing share price.

Marty Becker, Margaret Leung and Sir Brian Pomeroy received the first purchase of shares under this arrangement on 4 September 2014 with the company paying the associated brokerage costs.