Garratt-Cox emerges from boardroom battle with incentive worth up to £2m in shares

Alliance Trust’s chief executive Katherine Garrett-Cox could scoop £2 million worth of shares under the Dundee firm’s new long-term incentive scheme.

The award, which only pays out if performance targets are met over the next three years, emerges just a week after Ms Garratt-Cox was forced into a last minute climb-down in a battle with Alliance’s largest shareholder which saw both her performance and pay called into question.

Last week’s annual meeting heard that the wealth manager’s performance over the most recent three-year period had paid out only the minimum 12.5 per cent, triggering the move by US hedge fund Elliott Advisors to mount a challenge to Ms Garratt-Cox’s current board.

A mojor improvement will be needed after the 2012-15 plan paid out zero in relation to total shareholder return as Alliance ranked 18th out of 33 global trusts, and 25 per cent in relation to net asset value return , where it was ranked 17th out of 33.

Alliance must break into the top quartile of the peer group, or currently the first eight places, on both measures over three years for the full award to be triggered.

A deal struck with Elliott last week saw a one year truce agreed and a promise of improved performance made by the board.

As well as the promise of staving off another shareholder challenge, the 2015-18 award sees Ms Garrett-Cox stand to gain 223,471 shares from a matching award based on the deferred element in her annual bonus, of which at least half must be used to buy shares.

A further 177,514 shares would vest under a nil-cost performance award, taking the total to 400,985 shares valued by Alliance at £2.03m.

Similarly, it has been reported that finance director Alan Trotter has been awarded a total 139,121 shares currently worth £705,343.

Although assessed over three years, the latest award will not vest until May 2020 after the board decided to introduce an additional two-year holding period to “encourage longer-term thinking”.