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LONDON - Bodycote (LON:BOY) plc, a leading provider of heat treatment and specialist thermal processing services, has outlined the performance targets for its Bodycote Incentive Plan (BIP) tied to long-term executive remuneration. The targets, which are linked to the company’s financial and environmental objectives, were detailed following the release of the 2024 Annual Report and Accounts.
The BIP award, granted on March 21, 2025, will measure executive performance based on three key metrics: Return on Capital Employed (ROCE), Earnings Per Share (EPS) Compound Annual Growth Rate (CAGR), and environmental sustainability, specifically reductions in absolute Group CO2e emissions.
For ROCE, no awards will vest if performance falls below a 47p threshold. The target for full vesting is set at 17.2%, with a maximum vesting potential of 20% if performance exceeds expectations. Regarding EPS CAGR, executives will see a 25% vesting at a 2% growth, full vesting at 5%, and a maximum of 175% vesting if growth reaches 10%.
The environmental component of the BIP is based on the Group’s commitment to the Science Based Targets initiative (SBTi). The full vesting of the EPS metric will require meeting the Group’s new SBTi target reduction, aiming for a 46% reduction in CO2e emissions by December 2027 compared to 2019 levels. This translates to an average annual reduction of 4.5%. The threshold target aligns with a ’well-below 2 degree’ pathway, necessitating an average annual reduction of 2.5%.
Bodycote’s approach reflects a growing trend among companies to align executive compensation with broader corporate responsibility goals, including financial performance and environmental sustainability. The company’s move to integrate these targets into their incentive plan underscores their commitment to long-term value creation and corporate sustainability.
The targets for the BIP awards are calculated using actual exchange rates, and Capital Employed includes the goodwill existing as of the start of the performance period, which began on January 1, 2025. The information is based on a press release statement from Bodycote plc.
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