Top UK FDs Have £500 Million Tied Up in Their Companies

Nick Parmee

29 May 2007

The finance directors and chief financial officers of the UK’s largest listed companies - the FTSE 100 - have a potential £487 million ($966 million) of assets tied up in their companies, according to a new study by Heartwood Wealth Management. Heartwood’s analysis of published sources shows that 26 per cent is held direct, with 65 per cent in long term incentive plans and 9 per cent as shares under option (valued intrinsically). Even among this group, there is a significant gulf between top and bottom: the top ten account for 42 per cent of the total, with a collective £202 million. David Lough, Heartwood chief executive, said: “Today’s FTSE 100 finance chiefs have become potentially much wealthier individuals than their predecessors only a decade ago, but whilst they remain in their positions a lot of their assets remain in practise illiquid. Although they might like to sell down shares to spread their risks, many fear sending out the wrong sort of message to the market and to their colleagues. And even if they did want to sell shares, restrictions around closed periods and mergers or acquisitions mean that it can be difficult to select the most appropriate time. This means that most wait until they retire or leave the company to liquidate these assets but may face a larger tax bill as a result.”