Insurance firm Lloyd’s of London Beazley has cut the total pay of its chief executive and group finance director after its full-year results were found to contain errors in the number of shares used to calculate awards.
The insurer, which recently entered the FTSE 100 due to a rise in commercial insurance prices, made a stock exchange announcement on Wednesday to clarify the correct remuneration numbers.
Chief executive Adrian Cox will receive £1.5m in total remuneration for 2022, some £138,000 less after the revision, it said. Finance chief Sally Lake will receive almost £1.2 million, or £108,000 less than previously projected.
The change stems from a long-term incentive plan, designed to reward senior management for measuring shareholder value. Executive fixed salaries and bonuses are not affected by these changes. No money was paid, according to people familiar with the matter.
The Alphaville FT blog identified an error in the account on Monday, suggesting the wrong number of shares had been used for a certain balance sheet size.
On Tuesday, Beazley confirmed the error, saying that both net assets per share and net tangible assets per share — key measures of book value for shareholders — were wrong. It has used the weighted average number of shares for the year, when it should use the closing number of shares at the end of December.
Insurers then followed up with Wednesday’s announcement that adjusted for long-term incentive plans.
Beazley’s shares have risen 50 percent over the past year as insurance prices in areas such as property and cyber catastrophe cover. But they fell 7 percent over the past month after results showed a weaker revenue trend toward the end of the year.
In cyber insurance, brokers and buyers have been agitating over new exclusions written into policies intended to ensure that businesses will not be protected from state-sponsored attacks. Lloyd’s insurers have a deadline of the end of this month for contracts written on the market to have the exemption.
Speaking to the Financial Times last week, Cox said Beazley’s own exemption for war-related attacks was a “thing to do” to remove uncertainty, and was being pushed by regulators and reinsurers. But he admits it has affected the company’s growth rate as commercial customers choose to buy elsewhere.