Lloyd’s of London insurer Beazley has cut the total pay of its chief executive and group finance director after its full-year results were found to contain an error in the number of shares used to calculate the awards.
The insurer, which recently entered the FTSE 100 on the back of an upswing in commercial insurance prices, made a stock-exchange announcement on Wednesday to clarify the correct remuneration numbers.
Chief executive Adrian Cox will receive £1.5mn in total remuneration for 2022, some £138,000 lower after the revision, it said. Finance chief Sally Lake will receive almost £1.2mn, or £108,000 less than previously projected.
The changes came from the long-term incentive plan, designed to reward senior management for hitting measures of shareholder value. The executives’ fixed pay and bonus are unaffected by the change. No monies have yet been paid, according to a person familiar with the matter.
The FT’s Alphaville blog identified a mistake in the accounts on Monday, suggesting the wrong share count had been used for certain balance sheet measures.
On Tuesday, Beazley confirmed the error, saying its stated net assets per share and net tangible assets per share figures — key measures of book value for shareholders — were wrong. It had used the weighted average number of shares for the year, when it should have used the closing number of shares at the end of December.
The insurer then followed up with Wednesday’s announcement setting out the resulting adjustments to its long-term incentive plans.
Beazley’s shares are up 50 per cent over the past year as prices rise for its insurance in areas such as property catastrophe cover and cyber. But they are down 7 per cent over the past month after its results revealed weaker revenue trends at the end of the year.
In cyber insurance, brokers and buyers have chafed at newly written exclusions in policies intended to make clear that businesses will not be protected from state-backed attacks. Lloyd’s insurers have a deadline of the end of this month for contracts written within the market to have such an exclusion.
Speaking to the Financial Times last week, Cox said Beazley’s own exclusion for war-related attacks was the “right thing to do” to dispel uncertainty, and was being pushed for by regulators and reinsurers. But he admitted it had affected the company’s growth rate as commercial customers choose to buy elsewhere.