REG - abrdn PLC - Final Results - Part 3 of 7
04/03/2025 07:15
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RNS Number : 1952Z abrdn PLC 04 March 2025
abrdn plc
Full Year Results 2024
Part 3 of 7
Governance
Contents
Board of Directors 88
Corporate governance statement 92
1. Audit Committee report 105
2. Risk and Capital Committee report 114
3. Nomination and Governance Committee report 118
4. Directors' remuneration report 122
Directors' report 142
Statement of Directors' responsibilities 149
Board of Directors
Our business is overseen by our Board of Directors. Biographical details (and
shareholdings) of the Directors as at 3 March 2025 are listed below.
Sir Douglas Flint CBE -
Chair
Appointed to the Board Age
November 2018 69
Nationality Shares
British 200,000
Board committees: NC Ch
Experience and competencies
Sir Douglas draws on his extensive board experience to shape a collaborative
approach, which facilitates open and constructive boardroom discussion. He
guides the board's review of performance and shaping of abrdn's strategy and
promotes its stewardship responsibilities, including active engagement with
key stakeholders. He has considerable global experience, including in Asia,
and he remains actively involved in international, financial and governance
matters.
Previously, Sir Douglas spent over two decades at HSBC, serving as the banking
group's chairman for seven years and as group finance director 15 years. Prior
to this, he was a partner at KPMG. He was also previously a non-executive
director at BP from 2005-2011 and a member of the Mayor of Shanghai and Mayor
of Beijing's Advisory Boards.
Sir Douglas received his CBE in 2006 and knighthood in 2018 recognising his
services to the finance industry.
External appointments
- Chairman of IP Group plc.
- Chairman of the Royal Marsden Hospital and Charity.
- International Advisory Panel of the Monetary Authority of Singapore.
Jason Windsor -
Chief Executive Officer
Appointed to the Board Age
October 2023 52
Nationality Shares
British 357,635
Experience and competencies
Jason was appointed as abrdn's Chief Executive Officer in September 2024,
having joined as Chief Financial Officer (CFO) in October 2023. With over 30
years of industry experience, Jason brings a strong track record of leadership
in finance, asset management, mergers and acquisitions and strategic planning.
He previously served as CFO of UK housebuilder Persimmon and in several
leadership roles at Aviva, including as the group's CFO, CFO of Aviva UK,
Chief Capital & Investments Officer and as a director on the board of
Aviva Investors.
Jason previously spent 15 years at Morgan Stanley in London and Singapore,
latterly as a managing director within its investment banking division, where
he advised UK and international banks, insurers and asset managers on mergers
and acquisitions, capital raising and strategy.
External appointments
- Governor of Felsted School, Essex.
Vivek Ahuja -
Non-Executive Director
Appointed to the Board Age
October 2024 58
Nationality Shares
Singaporean Nil
Board committees: A Ch NC RC
Experience and competencies
Vivek is a global business leader with over 30 years of senior management
experience in international financial services and private equity. He offers
considerable expertise in strategy, business transformation, risk management
and corporate governance.
Prior to joining abrdn's board, Vivek held several prominent executive roles.
Most recently, he was Chief Executive Officer (CEO) of private equity firm
Terra Firma, having initially joined as Group Chief Financial Officer (CFO)
and Chief Operating Officer (COO). Previously, he spent 17 years at Standard
Chartered, working in senior global finance roles, latterly as Deputy Group
CFO.
Vivek also brings a wealth of strategic and financial expertise to multisector
businesses through his non-executive and advisory experience. From 2018 to
January 2025, he was a non-executive director and Chair of the Risk Committee
at NatWest Markets.
He is a Fellow of the Institute of Chartered Accountants in England &
Wales (ICAEW).
External appointments
- Senior Independent Director and Chair of the Audit & Risk Committee at PZ
Cussons plc.
- Independent Member of Council at King's College, London.
- Non-Executive Director of the Royal Free London NHS Foundation Trust.
- Non-Executive Director of Ebury Partners Limited
Jonathan Asquith -
Non-Executive Director and Senior Independent Director
Appointed to the Board Age
September 2019 68
Nationality Shares
British 205,864
Board committees: R Ch NC
Experience and competencies
Jonathan has considerable experience as a non-executive director within the
investment management and wealth industry, which enables him to provide
crucial insights to abrdn through his board membership and committee roles.
He was a board member at 3i Group plc for almost 10 years, stepping down as
Deputy Chair in 2020. His other previous non-executive roles have included
Chair of Citigroup Global Markets Limited, Citibank International Limited,
Dexion Capital plc and AXA Investment Managers. He was also a director at
Tilney, Ashmore Group plc and AXA UK plc.
In his executive career, Jonathan spent 18 years at Morgan Grenfell. After
serving as Group Finance Director, he became Deutsche Morgan Grenfell's CFO
and, later, Chief Operating Officer. From 2002 to 2008, he was a director of
Schroders plc, serving as CFO and, subsequently, Executive Vice Chairman.
External appointments
- Non-Executive Director of CiCap Limited and its regulated subsidiary Coller
Capital Limited.
- Non-Executive Director of B-FLEXION Group Holdings SA and subsidiaries,
including Capital Four Holding A/S.
- Non-Executive Director of Twelve Securis Holding AG.
Katie Bickerstaffe -
Non-Executive Director
Appointed to the Board Age
October 2024 57
Nationality Shares
British 30,195
Board committees: R
Experience and competencies
Katie is a highly regarded retail and consumer business leader, bringing
strong perspectives on digital business models and transformation programmes
to the abrdn board.
During her executive career, Katie held numerous leadership positions,
including as Co-Chief Executive Officer (CEO) of multinational food, clothing
and homewares retailer, M&S; Executive Chair and CEO Designate at energy
provider SSE; and CEO, UK & Ireland at Dixons Carphone.
She also served in managing director roles at the Somerfield Stores group and
was Dyson Appliances' group HR director. Previously, she held various roles at
PepsiCo and Unilever.
External appointments
- Chair of the Remuneration Committee of Barratt Redrow plc.
- Senior Independent Director of Diploma plc.
- Senior Independent Director of England and Wales Cricket Board.
- Non-Executive Director of Royal Marsden NHS Foundation Trust.
John Devine -
Non-Executive Director
Appointed to the Board Age
July 2016 66
Nationality Shares
British 52,913
Board committees: RC Ch A NC
Experience and competencies
John provides the board with extensive insights into financial reporting and
risk management, which he gained through his successful career in investment
banking and capital markets and then, latterly, in asset management;
international experience in the US and Asia; and background in finance,
operations and technology - all of which are of great importance to abrdn's
strategy.
From 2008 to 2010, John was Chief Operating Officer of Threadneedle Asset
Management Limited. Previously, he held several senior executive positions at
Merrill Lynch in London, New York, Tokyo and Hong Kong.
He is a Fellow of the Chartered Institute of Public Finance and Accounting.
External appointments
- Non-Executive Chair of Credit Suisse International and Credit Suisse
Securities (Europe) Limited.
Hannah Grove -
Non-Executive Director
Appointed to the Board Age
September 2021 61
Nationality Shares
American and British 33,000
Board committees: NC R
Experience and competencies
Hannah provides expertise in leading brand, communications, client experience
and digital marketing strategies, including those for major acquisitions,
which she combines with deep knowledge of regulatory and governance matters.
She has received significant industry recognition as a diversity and equity
champion and is our designated non-executive director for board employee
engagement. She is also a non-executive director on the boards of Standard
Life Savings Limited and Elevate Portfolio Services Limited, wholly owned
subsidiaries of abrdn.
Before joining the abrdn board, Hannah enjoyed a 22-year career at State
Street (NYSE:STT), including 12 years as Chief Marketing Officer. She was a
member of the management committee, business conduct and risk committee, and
conduct standards committee, as well as the board of its China legal entity.
Previously, Hannah was a marketing director at the Money Matters Institute.
External appointments
- Member of the advisory board at Irrational Capital.
- Member of the board of advisors at Reboot.
- Vice Chair of the Boston Public Library Fund.
Pam Kaur -
Non-Executive Director
Appointed to the Board Age
June 2022 61
Nationality Shares
British Nil
Board committees: A RC
Experience and competencies
Pam has more than 20 years' experience of leadership roles in business, risk,
compliance and internal audit at several of the world's largest and most
complex financial institutions during periods of significant change and public
scrutiny. She has brought considerable expertise in leading the development
and implementation of compliance, audit and risk frameworks and adapting these
to changing regulatory expectations.
Her career has spanned roles at Ernst & Young, Citigroup, Lloyds TSB,
Royal Bank of Scotland, Deutsche Bank and HSBC. Between 2019 and 2022, she
served as a non-executive director on the board of Centrica. Pam is a fellow
of the Institute of Chartered Accountants of England and Wales.
Following her appointment as Group Chief Financial Officer (CFO) at HSBC, Pam
will not seek re-election to abrdn's board at the company's annual general
meeting.
External appointments
- Group Chief Financial Officer (CFO) and Executive Director at HSBC.
- Director at Hong Kong Shanghai Banking Corporation.
Michael O'Brien -
Non-Executive Director
Appointed to the Board Age
June 2022 61
Nationality Shares
Irish 173,780
Board committees: A RC
Experience and competencies
Mike brings extensive asset management experience to the abrdn board.
Throughout his career, he has had a key focus on innovation and
technology-driven change to support better client outcomes. A qualified
actuary, he has been responsible for developing and leading global investment
solutions, distribution and relationship management strategies.
His executive career spanned senior roles across the industry. At JP Morgan
Asset Management, he was Co-Head, Global Investment Solutions and, previously,
Chief Executive Officer (CEO) of the firm's EMEA business. Prior to this, he
was Head of Institutional Business for EMEA at Blackrock/Barclays Global
Investors and an investment and risk consultant at Towers Watson. He also
previously served on the board of the UK NAPF and was a member of the UK NAPF
Defined Benefit Council.
Mike is a Chartered Financial Analyst and a Fellow of the Institute of
Actuaries.
External appointments
- Non-Executive Director of Carne Global Financial Services Limited.
- Senior adviser to Osmosis Investment Management.
- Investment adviser to the British Coal Pension Funds.
Cathleen Raffaeli -
Non-Executive Director
Appointed to the Board Age
August 2018 68
Nationality Shares
American 9,315
Board committees: R RC
Experience and competencies
Cathi has strong experience in the financial technology, wealth management and
banking sectors with a background in the platforms sector, as well as
international board experience. She brings these insights as non-executive
chair of the boards of Standard Life Savings Limited and Elevate Portfolio
Services Limited, wholly owned subsidiaries of abrdn. Her role provides a
direct link between the board and the platform businesses that help us connect
with clients.
Previously, Cathi was a lead director of E*Trade Financial Corporation,
non-executive director of Kapitall Holdings, LLC and President and Chief
Executive Officer of ProAct Technologies Corporation. She was also a
non-executive director of Federal Home Loan Bank of New York, where she was a
member of the executive committee, and Vice Chair of both the technology
committee and compensation and human resources committee.
External appointments
- Managing Partner of Hamilton White Group
- Managing Partner of Soho Venture Partners.
- Director and member of the Audit Committee and Human Resources Committee of
RE/MAX Holdings Inc.
Key to Board committees R Remuneration Committee NC Nomination and Governance Committee
RC Risk and Capital Committee Ch Committee Chair
A Audit Committee
Corporate governance statement
The Corporate governance statement and the Directors' remuneration report,
together with the cross references to the relevant other sections of the
Annual report and accounts, explain the main aspects of the Company's
corporate governance framework and seek to give a greater understanding as to
how the Company has applied the principles and reported against the provisions
of the UK Corporate Governance Code 2018 (the Code).
Statement of application of and compliance with the Code
For the year ended 31 December 2024, the Board has carefully considered the
principles and provisions of the Code (available at www.frc.org.uk) and has
concluded that its activities during the year and the disclosures made within
the Annual report and accounts comply with the requirements of the Code. The
statement also explains the relevant compliance with the FCA's Disclosure
Guidance and Transparency Rules Sourcebook. The table on page 148 sets out
where to find each of the disclosures required in the Directors' report in
respect of all of the information required by UK Listing Rule (UKLR) 6.6.1 R,
and our statement on Board diversity is on page 99.
(i) Board leadership and company purpose
Purpose and Business model
The Board ratifies the Company's purpose set out on the inside front cover,
and oversees implementation of the Group's business model, which it has
approved, and which is set out on pages 20 and 21. Pages 2 to 85 show how the
development of the business model in 2024 supports the protection and
generation of shareholder value over the long term, as well as underpinning
our strategy for growth. Significant developments in 2024 included the
announcement of the transformation programme in January, targeting an
annualised cost reduction of at least £150m by the end of 2025 and the
introduction of the Group Operating Committee (GOC) in November. The Board's
consideration of current and future risks to the success of the Group is set
out on pages 82 to 85, complemented by the report of the Risk and Capital
Committee on pages 114 to 117.
Oversight of culture
The Board and the Nomination and Governance Committee play a key role in
overseeing how the management of the Group assesses and monitors the Group's
culture. Through engagement surveys and the Board Employee Engagement
programme, the Board acquires a clear view on the culture evident within the
Group's businesses and how successfully expected behaviour is being embedded
across the group in ways that will contribute to our success. The Board notes
the improvement in the engagement scores over the course of the year.
The Board holds management to account for a range of engagement and diversity,
equity and inclusion outcomes, which are seen as important indicators of
culture, and which form a key part of the executive scorecard.
The Board and the Executive Leadership Team (ELT) have defined a set of
Commitments - Client first, Empowered, Ambitious and Transparent - which
embody our cultural commitments at abrdn and are designed to create the best
working environment for our colleagues, so contributing to better customer
experience and outcomes. Our culture is defined by these commitments and the
behaviours which underpin them, which are set out on page 11.
Stakeholder engagement
The Annual report and accounts explains how the Directors have complied with
their duty to have regard to the matters set out in section 172 (1) (a)-(f) of
the Companies Act 2006. These matters include responsibilities with regard to
the interests of customers, employees, suppliers, the community and the
environment, all within the context of promoting the success of the Company.
The table on pages 95 and 96 sets out the Board's focus on its key
relationships and shows how the relevant stakeholder engagement is reported up
to the Board or Board Committees.
Engaging with investors
The Group's Investor Relations and Secretariat teams support the direct
investor engagement activities of the Chair, Senior Independent Director
(SID), CEO, CFO and, as relevant, Board Committee chairs. During 2024, we
carried out a comprehensive programme of meetings with domestic and
international investors, via a range of one-on-one, group, conference and
reporting related engagements. Investors had broad interests including
financial performance, the new CEO's initial observations and key priorities,
progress on our transformation programme, synergies between the three
businesses, market trends, investment performance, capital allocation, the
relationship with Phoenix, and corporate governance. The Chair, SID, CEO and
CFO bring relevant feedback from this engagement to the attention of the
Board.
The Board ensures its outreach activities encompass the interests of the
Company's circa one million individual shareholders. Given the nature of this
large retail shareholder base, it is impractical to communicate with all
shareholders using the same direct engagement model followed for institutional
investors. Shareholders are encouraged to receive their communications
electronically and around 400,000 shareholders receive all communications this
way. The Company actively promotes self service via the share portal, and more
than 215,000 shareholders have signed up to this service. Shareholders have
the option to hold their shares in the abrdn Share Account where shares are
held electronically and around 91% of individual shareholders hold their
shares in this way.
To give all shareholders easy access to the Company's announcements, all
information reported via the London Stock Exchange's regulatory news service
is published on the Company's website. The CEO and CFO continue to host formal
presentations to support both the full year and half year financial results
with the related transcript and webcast available from the Investors' section
of the Company's website. In 2024, the Company published an H2 2023 trading
statement in January, a Q1 2024 update in April, a 2024 Half Year results
announcement in August and a Q3 2024 update in October. In 2025, the Company
published a Q4 2024 update in January.
The 2024 Annual General Meeting (AGM) was held in Edinburgh on 24 April 2024.
The meeting was arranged as a 'hybrid' meeting. This allowed shareholders to
participate in the meeting remotely, as well as in person. For those
participating remotely, questions could be submitted during the meeting via a
'chat box'. The Chair and CEO presentations addressed the main themes of the
questions which had been submitted at and prior to the meeting. 43.6% of the
shares in issue were voted. All resolutions were passed.
Our 2025 AGM will be held on 8 May 2025 in Edinburgh. The AGM Guide 2025 will
be published online at www.abrdn.com in advance of this year's meeting. The
voting results, including the number of votes withheld, will be published on
the website at www.abrdn.com after the meeting.
Engaging with employees
Hannah Grove continued as our designated non-executive Director for board
employee engagement (BEE) for a third year. abrdn's BEE programme is designed
to ensure that employees' perspectives and sentiments are heard and understood
by the Board to help inform decision-making, and to support colleagues'
understanding about the role of the plc Board. The programme also ensures that
colleagues have direct access to our Non-Executive Directors (NEDs). A summary
of activity can also be found on page 61.
Given the amount of change in 2024, both specific to abrdn and across the
industry at large, it was important to ensure that the programme reached as
many colleagues as possible and created opportunities for engagement,
discussion and feedback throughout the year. A key design element was not to
curate attendance at BEE sessions to ensure that the programme reached a true
and fair representation of employees, and not just those who might have been
more positively inclined or engaged to begin with. As a result, the programme
comprised three pillars: (i) Discussion Sessions, forums for groups of between
10-15 colleagues from across businesses and geographies for informal sessions
so that they could share views, provide feedback and ask questions; (ii) Meet
the NEDs sessions, where team members could interact directly with the broader
plc Board, ask questions and hear views and lived experiences on topics
ranging from the broader investment industry and macro environments to
specifics around abrdn's strategy, and lastly; (iii) reporting and
measurement, including regular quarterly thematic updates to the Board,
abrdn's ELT and abrdn's Chief People Officer to ensure that key talent/people
strategies were aligned and any issues or gaps could be addressed or
considered within the framework of abrdn's overall strategy and policies and
procedures. abrdn employees are another important stakeholder group in terms
of communication and here we provided a mid-year update of activity and themes
in addition to ad-hoc communications coinciding with specific BEE activity.
The efficacy of the programme was measured through anecdotal feedback and post
event surveys where we gauge overall satisfaction as well as gather insights
on ways to improve or evolve the programme.
In 2024, BEE activity spanned abrdn locations across the UK, US, Europe and
APAC, with sessions and events delivered in a combination of in-person,
virtual and hybrid formats.
The BEE programme received positive and constructive feedback from colleagues
that participated in the programme. The main themes heard were largely around
Change - understanding the impact of transformation; Compensation - a desire
for greater clarity and focus; and Career Development - more structure around
advancement and management and leadership skills. There was also a lot of
interest in abrdn's commitment to Diversity and Inclusion and strengthening
network engagement and participation. Importantly for each theme, tangible
action ensued from abrdn's leadership team spanning greater focus on
clarifying the approach to compensation and pathways to improvement, to the
launch of abrdn's new Career Framework providing structure and clarity around
professional growth and opportunity, to the relaunch of abrdn's diversity
strategy with strong ELT engagement and involvement. Heightened focus was also
applied to communication around change with regular reporting on
transformation progress including investments made back into the business and
people.
The BEE programme places a strong focus on talent. The members of abrdn's
Future Leaders programme and the abrdn Leadership Group (aLG) take part in
Discussion Sessions aimed to gauge the efficacy and progress of these
leadership programmes and cohorts. Formal mentoring continued between all
members of the plc Board and abrdn's ELT as well as its Executive Talent
pipeline. The connectivity between the BEE programme and wider talent
initiatives at abrdn allows the Board to have more follow up data points which
are then considered by the business and the Board.
In 2025, the BEE programme will continue its core objectives, gathering
feedback and demonstrating actionable outcomes, and focusing on staying close
to colleagues and maintaining high Board visibility. The Board have seen how
this and the significant investment from the CEO and leadership team in
prioritising people and culture is starting to make a difference in terms of
engagement and confidence, as evidenced by the most recent employee engagement
scores. These improved scores are not yet at the desired level therefore it's
very important that positive momentum is maintained which means leveraging the
BEE programme where possible to support progress which ultimately will deliver
better overall performance.
Summary of Stakeholder engagement activities
In line with their obligations under s.172 of the Companies Act 2006, the
Directors consider their responsibilities to stakeholders in their discussions
and decision-making. The table below illustrates direct and indirect Board
engagement with various stakeholders. More details of stakeholder engagement
activities can be found on pages 60 and 61.
Key stakeholders Direct Board engagement Indirect Board engagement Outcomes
Clients - The CEO meets with key clients as required and reports to the Board on - The CEOs of Adviser, ii and Investments (the Business CEOs) report at - Engagement supported the development of the key client management process,
such meetings. Board meetings on key client engagement, support programmes and client and our client solutions and sustainability approaches.
strategies.
- The CEO takes part in key client pitches to hear directly from clients on
- The businesses position the business around client needs with performance
their requirements. - Market share data and competitor activity are reported to the Board. accountability measured on that basis.
- The Chair meets with peers and key clients at conferences and industry - Results of client perceptions survey/customer sentiment index are - Investment processes are driven by understanding client needs and
membership and advisory boards where he represents the Group. reported. designing appropriate solutions taking into account client risk appetite and
sophistication.
- Board members feed into Board discussions any feedback received directly
from clients.
Our colleagues - 'Meet the NEDs' BEE sessions for a diverse mix of staff at all levels - The Chief People Officer (CPO) reports to the Nomination and Governance - Engagement feedback recognised in Board discussions.
allows direct feedback in informal settings. Committee meeting on key hires and employee issues including development needs
to support succession planning. - Board involvement in shaping the desired culture and targets, to tracking
- Employee engagement NED in place and active with the colleague-led
progress against engagement feedback, are key inputs to talent and development
networks as well as with employees through their representatives. The BEE NED - The CPO produces reporting for the Board drawing out key factors programmes and the design of reward philosophy.
reports regularly to the CEO and the Board. influencing staff turnover, morale and engagement.
- Each year, the Board mentors emerging talent. - Viewpoints and employee surveys collect aggregate, regional and functional
trend data which is reported to the Board.
- CEO and CFO run 'Town Hall' sessions following quarterly, half-yearly and
annual trading announcements.
Community Business partners/ supply chain - CEO oversees key strategic relationships and meets with his opposite - The Board receives reports on first line key supplier relationships and - The development of our business through our relationships with partners is
numbers as required. their role in transition and transformation activities. a critical element of the Board's strategy.
- Executive Director (ED) direct meetings with core suppliers. - Supplier due diligence surveys are undertaken. - Transformation discussions have included a focus on the quality, service
provision, availability and costs of relevant suppliers.
- The Risk and Capital Committee reviews the dependency on critical - Tendering process includes smaller size firms.
suppliers and how they are managed.
- The overriding guidelines for business partnerships have been established
- Access and audit rights in place with key suppliers. as working for both parties and creating efficient operations.
- The Audit Committee leads an assessment of external audit performance and
service provision. - Modern slavery compliance process in place. - The Board sought executive assurance on the operation and working practice
of key suppliers.
- The Board receives detailed papers supporting the outsourcing of - Procurement/payment principles and policies in place.
technology and business services.
- Certain key suppliers regularly discussed at Audit Committee, Risk and
Capital Committee and Board.
- Oversight of key outsourcing arrangements reported to the Board.
Key stakeholders Direct Board engagement Indirect Board engagement Outcomes
Community (continued) Communities - Board members present at relevant events and conferences. - Stewardship/sustainability teams report regularly to the Board and - Considered as input to the Group's charitable giving programmes.
Committees.
- Chair/CEO/CFO represent the Group on public policy and industry
- Engagement with our communities helps bring our purpose to life.
organisations. - Feedback on annual Stewardship and Sustainability and TCFD reports.
- Board is kept up to date with the activities of the abrdn Financial - Review of charitable giving strategy.
Fairness Trust and the abrdn Charitable Foundation.
- Sustainability presentations to the Board.
Regulators/ - Regular engagement by CEO, CFO, Chair and Committee Chairs. - CFO and Chief Risk Officer (CRO) update the Board regularly. - Relevant Board decisions recognise regulatory impact and environment.
policymakers/ - FCA has access to the Board. - Board hears reports on the results of active participation through
industry groups.
governments - 'Dear Board/CEO' letters issued from regulators.
- Relevant engagement with regulators in overseas territories.
Shareholders Shareholders - Results presentations with EDs and Board attendance at the AGM and - Regular updates from the EDs/ Investor Relations Director/ Chair/Chair of - There has been continued dialogue with shareholders on remuneration
Q&A. Remuneration Committee summarising the output from their programmes of matters including in the period leading up to the 2024 AGM.
engagement.
- Chair, CEO, SID and CFO meetings with investors.
- Analyst/Investor reports distributed to the Board.
- Chair, Committee Chairs, SID and BEE NED round table with governance
commentators. - As relevant, feedback from corporate brokers.
- Remuneration Committee Chair meetings with institutional investors. - Dedicated mailbox and shareholder call centre team.
- Chair/CEO direct shareholder correspondence.
Details are included below of two examples of principal decisions made by the
Board in 2024 and how the interests of our stakeholders were considered during
the Board's decision-making process.
Transformation programme In January 2024, the Board approved the announcement of a transformation
programme targeting an annualised cost reduction of at least £150m by the end
of 2025. The programme was designed to restore the core Investments business
to an acceptable level of profitability and allow for incremental reinvestment
into growth areas. The announcement marked a further step on the Company's
journey to align its resources and capabilities to meet client needs and
reinforce areas of strength across the Group.
In approving the announcement of the programme, the Board considered the need
to remove management layers, increase spans of control, generate further
efficiency in outsourcing and technology areas, as well as reduce overheads in
Group functions and support services. The Board also considered the Company's
key stakeholder groups and that whilst the programme was expected to result in
the reduction of approximately 500 roles, the bulk of the savings would be
generated from non-staff costs. The Board further noted that following the
announcement of the programme, focus would remain on delivering excellent
service and strongly competitive investment performance to all clients,
supported by the Group's strong risk management and control environment.
In relation to potential key outcomes of the programme, the Board noted that a
streamlined operations and management structure will enable the Group to
deploy its resources more efficiently and improve management accountability.
The increased profitability will enable incremental investment in the
capabilities to deliver excellent customer outcomes. Further information
regarding the benefits and outcomes of the Transformation programme can be
found at page 7.
Appointment of CEO In May 2024, the Company announced the launch of a CEO succession plan,
following the strategic repositioning of the Company to a specialist asset
manager, and a digitally-focused wealth manager. Jason Windsor was announced
as Interim Group CEO, while a formal and thorough search process supported by
an external search firm was conducted.
In line with the Group's long term succession planning process, the Board
considered a number of internal and external candidates for the role and
identified detailed suitability criteria that it was looking for in the next
CEO. The Board's considerations included the importance of the CEO to all of
the Company's key stakeholder groups, the Group's strategy and in leading the
day-to-day running of the Group.
The Board met on a number of occasions to consider the shortlist of internal
and external candidates and in September announced Jason Windsor as Group CEO.
Jason was the unanimous choice of the Board to lead the Company in its next
phase and brings significant expertise and knowledge of the Group's industry.
Following Jason's appointment in September, there has been a focus on
strengthening leadership and enhancing the operating model with the result
that the Executive Leadership Team has been broadened with greater client
expertise and a new Group Operating Committee (GOC) has been introduced to
improve the pace of decision-making. The Board looks forward to continuing to
work with Jason, with a focus on the delivery of the Company's strategic
objectives in 2025.
Speaking up
The workforce has the means to raise concerns in confidence and anonymously,
and these means are well communicated. The Audit Committee's oversight of the
whistleblowing policy and the Audit Committee Chair's role to report to the
Board on whistleblowing matters is covered in the Audit Committee report on
page 106.
Outside appointments and conflicts of interest
The Board's policy encourages executive Directors to take up one external
non-executive director role, as the Directors consider this can bring an
additional perspective to the Director's contribution. Jason Windsor is a
Governor of Felsted School and a Director of Felsted School Trustees Limited.
Any proposed additional appointments of the non-executive Directors are
firstly discussed with the Chair and then reported to the Nomination and
Governance Committee prior to being considered for approval. The Senior
Independent Director takes that role in relation to the Chair's outside
appointments. The register of the Board's collective outside appointments is
reviewed annually by the Board. Directors' principal outside appointments are
included in their biographies on pages 88 to 91. These appointments form part
of the Chair's annual performance review of individual non-executive
Directors' contribution and time commitment, and similarly that of the Senior
Independent Director of the Chair.
The Directors continued to review and authorise Board members' actual and
potential conflicts of interest on a regular and ad hoc basis in line with the
authority granted to them in the Company's Articles. As part of the process to
approve the appointment of a new Director, the Board considers and, where
appropriate, authorises their potential or actual conflicts. The Board also
considers whether any new outside appointment of any current Director creates
a potential or actual conflict before, where appropriate, authorising it. All
appointments are approved in accordance with the relevant Group policies. At
the start of every Board and Committee meeting, Directors are requested to
declare any actual or potential conflict of interest and in the event a
declaration is made, conflicted Directors can be excluded from receiving
information, taking part in discussions, and making decisions that relate to
the potential or actual conflict.
(ii) Division of responsibilities
The Group operates the following governance framework.
Governance framework
Board
The Board's role is to organise and direct the affairs of the Company and the
Group in accordance with the Company's constitution, all relevant laws,
regulations, corporate governance, and stewardship standards. The Board's role
and responsibilities, collectively and for individual Directors, are set out
in the Board Charter. The Board Charter also identifies matters that are
specifically reserved for decision by the Board. During 2024, the Board's key
activities included approving, overseeing and challenging:
The updated strategy and the 2025 to 2027 business plan to implement the Significant corporate transactions.
strategy.
Succession planning, in particular in the appointment of Jason Windsor as CEO.
Capital adequacy and allocation decisions.
The performance of each of the business areas.
Oversight of culture, our standards and ethical behaviours.
The sustainability strategy and approach across the Group, both as a corporate
Dividend policy including the decision framework governing the sustainability and as an asset manager.
of the dividend.
Significant external communications.
Financial reporting.
The work of the Board Committees.
Risk management, including the Enterprise Risk Management (ERM) framework,
risk strategy, risk appetite limits and internal controls and in particular Appointments to the Board and to Board Committees.
how these apply in a blended working environment with colleagues working from
home. Matters escalated from subsidiary boards to the Board for approval.
The Board regularly reviews reports from the CEO and from the CFO on progress
against approved strategies and the business plan, as well as updates on
financial market and global economic conditions. There are also regular
presentations from the Business CEOs and business functional leaders.
Chair CEO Senior Independent Director (SID)
Leads the Board and ensures that its principles and processes are maintained. The CEO operates within authorities delegated by the Board to: The SID is available to talk with our shareholders about any concerns that
they may not have been able to resolve through the channels of the Chair, the
Promotes high standards of corporate governance. Develop strategic plans and structures for presentation to the Board. CEO or CFO, or where a shareholder was to consider these channels as
inappropriate.
Together with the Company Secretary, sets agendas for meetings of the Board. Make and implement operational decisions.
The SID leads the annual review of the performance of the Chair.
Ensures Board members receive accurate, timely and quality information on the Lead the GOC/ELT in the day-to-day running of the Group.
Group and its activities.
Report to the Board with relevant and timely information.
Encourages open debate and constructive discussion and decision-making.
Develop appropriate capital, corporate, management and succession structures
Leads the performance assessments and identification of training needs for the to support the Group's objectives.
Board and individual Directors.
Together with the Chair, represent the Group to external stakeholders,
Speaks on behalf of the Board and represents the Board to shareholders and including shareholders, customers, suppliers, regulatory and governmental
other stakeholders. authorities, and the local and wider communities.
Non-executive Directors (NEDs)
The role of our NEDs is to participate fully in the Board's decision-making
work including advising, supporting and challenging management as appropriate.
Nomination and Governance Committee (N&G) Audit Committee (AC) Remuneration Committee (RC) Risk and Capital Committee (RCC)
- Board and Committee composition and appointments. - Financial reporting. - Development and implementation of remuneration philosophy and policy. - Risk management framework.
- Succession planning. - Internal audit. - Incentive design and setting of executive Director targets. - Compliance reporting.
- Governance framework. - External audit. - Employee benefit structures. - Risk appetites and tolerances.
- Culture, Diversity, Equity & Inclusion (DEI). - Whistleblowing. - Transactional risk assessments.
- Regulatory financial reporting. - Capital adequacy.
- Non-financial reporting (sustainability). - Anti-financial crime.
Group Operating Committee (GOC)
The GOC is responsible to the CEO for the development of corporate objectives
and strategy, oversight of commercial operations, finalisation of the annual
budget and business plan, proposals for inorganic strategic activity,
commercial aspects of people-related matters and to support the effective
operation and cohesion of the ELT. Membership of the GOC includes the CEO,
CFO, Group General Counsel, Chief Operating Officer & CEO of interactive
investor, Chief People Officer, CEO of Investments and CEO of Adviser.
Executive leadership team (ELT)
The ELT is responsible to the CEO for the execution of corporate objectives
and strategy, competitive analysis, sharing client insights, ensuring
communication and alignment across senior leadership, oversight of annual
budget and business plan proposals, review of performance against targets and
plan, idea generation, oversight and delivery of people-related matters,
oversight of sustainability and oversight of risk and controls. Membership of
the ELT includes the members of the GOC and the Chief Strategy and Business
Development Officer, Chief Risk Officer, Chief Internal Audit Officer, Chief
Investment Officer, Investments Chief Client Officer, Investments Chief
Product & Marketing Officer, interactive investor Chief Operating Officer
and Adviser Chief Distribution Officer.
Businesses Talent Efficient Operations Control
Business CEOs support the CEO to deliver growth across the business: The Chief People Officer (CPO) supports the CEO in developing talent Strategy, Technology, Legal and Finance ELT members, including the CFO, The Chief Risk Officer (CRO) supports the ELT and the CEO in their first line
management and succession planning and culture initiatives. support the CEO by overseeing global functions and the delivery of functional management of risk. The Chief Internal Audit Officer attends ELT controls
- ii. priorities. meetings.
- Adviser.
- Investments.
The framework is formally documented in the Board Charter which also sets out
the Board's relationship with the boards of the key subsidiaries in the Group.
In particular, it specifies the matters which these subsidiaries refer to the
Board or to a Committee of the Board for approval or consultation.
You can find the Board Charter on our website www.abrdn.com
Board balance and director independence
The Directors believe that at least half of the Board should be made up of
independent non-executive Directors. As at 3 March 2025, the Board comprises
the Chair, eight independent non-executive Directors and one executive
Director. The Board is made up of six men (60%) and four women (40%) (2023:
men 60%, women 40%). Catherine Bradley stepped down from the Board on 24 April
2024 and Stephen Bird stepped down on 24 May 2024. As noted in her biography
on page 90, following her appointment as Group CFO at HSBC, Pam Kaur will not
seek re-election to abrdn's Board at the Company's Annual General Meeting in
May. Katie Bickerstaffe and Vivek Ahuja were appointed to the Board on 1
October 2024 and will stand for election at the Company's AGM on 8 May 2025.
The Chair was independent on his appointment in December 2018. The Board
carries out a formal review of the independence of non-executive Directors
annually. The review considers relevant issues including the number and nature
of their other appointments, any other positions they hold within the Group,
any potential conflicts of interest they have identified and their length of
service. Their individual circumstances are also assessed against independence
criteria, including those in the Code. The Nomination and Governance
Committee, on behalf of the Board, conducts a particularly rigorous review for
any non-executive director whose term exceeds six years. In addition to the
above, this review includes any feedback from the Board effectiveness review,
ongoing overall contribution, and the output from individual annual
performance discussions with each NED conducted by the Chair. Cathi Raffaeli
and the Chair have both served more than six years and no issues or
considerations were raised through this assessment. John Devine's term will
reach nine years in July 2025 and it is proposed that John is re-appointed for
a further term (to expire at the end of the 2026 AGM) in order to facilitate
an orderly transition of his role as Risk Committee Chair. Following a
recommendation from the Nomination and Governance Committee, the Board
concluded that John continued to be independent in character and judgement and
that there were no relationships that were likely to affect or could appear to
affect his judgement. The Board also considered that John continues to make
high quality contributions to Board and Committee meetings, providing
effective and constructive challenge to management and demonstrating objective
and independent judgement. The Board therefore concluded that it was in the
best interests of the Company for John to remain on the Board to facilitate
the orderly transition of Risk Committee Chair responsibilities and that John
was considered to be independent. Following the review, the Board has
concluded that all the non-executive Directors are independent and
consequently, the Board continues to comprise a majority of independent
non-executive Directors. Jonathan Asquith served as Senior Independent
Director throughout 2024. In this role, he is available to provide a sounding
board to the Chair and serve as an intermediary for the other Directors and
the shareholders. He also led the process to review the Chair's performance.
The roles of the Chair and the CEO are separate and are summarised on page 98.
Each has clearly defined responsibilities, which are described in the Board
Charter. The Directors have access to the governance advice of the Company
Secretary whose appointment and removal is a matter reserved to the Board.
You can find out more about our Directors in their biographies on pages 88 to
91.
(iii) Board composition, succession, diversity and evaluation
The Board's policy is to appoint and retain non-executive Directors who bring
relevant expertise as well as a wide perspective to the Group and its
decision-making framework. The Board continues to support its Board Diversity
statement, which also applies to the Remuneration, Audit and Nomination and
Governance Committees and states that the Board:
- Recognises that diversity can bring insights and behaviours that
make a valuable contribution to its effectiveness and the Group's performance.
- Supports the CEO's commitment to achieve and maintain a diverse
workforce and an inclusive workplace.
- Believes in equity and supports the principle that the best person
should always be appointed to the role with due regard given to the benefits
of a full range of diversity characteristics, when undertaking a search for
candidates, whether executive or non-executive.
- Recognises that diversity can bring insights and behaviours that
make a valuable contribution to its effectiveness.
- Is committed to maintaining the diverse composition that is
appropriate to its needs.
- Has a zero-tolerance approach to unfair treatment or
discrimination of any kind, both throughout the Group and in relation to
clients, individuals and 3(rd) parties, associated with the Group.
- Supports and has oversight of the Group's DEI framework.
Board Diversity
Gender
Male: 6
Female: 4
Nationality
British: 6
American: 1
American and British: 1
Singaporean: 1
Irish: 1
Diversity activities and progress to meet our targets are covered in the
People - Diversity, equity & inclusion section of the Strategic report on
page 49. The ELT's diversity policy is covered in the Diversity, equity and
inclusion section of the Directors' report on page 146.
Board changes during the period are covered above and in the Directors' report
on page 144.
Ethnicity
White: 8
Asian: 2
In accordance with UKLR 6.6.6(9), as at 31 December 2024:
- At least 40% of the individuals on the board of directors are
women.
- At least one individual on the board of directors is from a
minority ethnic background.
During 2024, we applied our policy on diversity when searching for a successor
to Stephen Bird, with Jason Windsor ultimately appointed, as CEO.
Consequently, we do not currently meet the requirement under UKLR
6.6.6(9)(a)(ii) to have a woman represented in the identified Board leadership
positions (Chair, Senior Independent Director, CEO or CFO).
The Board supports the principle that the person best qualified, in the
particular circumstances of the role, should always be appointed to the role
with due regard given to the benefits of a full range of diversity
characteristics. This principle applies to the search for and appointment of
all candidates, both executive and non-executive.
Board appointment process, terms of service and role
Board appointments are overseen by the Nomination and Governance Committee and
more information can be found on page 119.
Each non-executive Director is appointed for a three-year fixed term and
shareholders vote on whether to elect/re-elect them at every AGM. Once a
three-year term has ended, a non-executive Director can continue for a maximum
of two further terms, if the Board is satisfied with the non-executive
Director's performance, independence and ongoing time commitment. Taking
account of their appointment dates the current average length of service of
the non-executive Directors is four years. For any non-executive Directors who
have already served two three-year terms, the Nomination and Governance
Committee considers any factors which have the potential to impact their
independence or time commitment prior to making any recommendation to the
Board. Cathi Raffaeli, Hannah Grove and Sir Douglas Flint came to the end of a
three-year term during 2024.
External search consultants may be used to support Board appointments. The
Group has used the services of MWM Consulting to support senior management
searches. MWM Consulting has no other connection to the Group or the
Directors.
Time commitment
The letter of appointment confirms that the amount of time each non-executive
Director is expected to commit to each year, once they have met all of the
approval and induction requirements, is a minimum of 35 days.
When appointing a non-executive Director, the Nomination and Governance
Committee carefully considers time commitments, investor guidelines and voting
policies and their application on current directorships. The Committee also
reviews in detail the planned changes to a non-executive Director's portfolio
and overall capacity, including the balance of listed and non-listed
non-executive Director roles. This is also reviewed by the Chair as part of a
formal sequence of bilateral conversations with each Board member during the
Company's annual Board Effectiveness process. This covers: time commitment and
the impact of any anticipated changes to external appointments over the next
12 months; conflicts of interest and; any training requirements that would
support the Board member in their role during the year. The Company supports
plc Directors taking active roles on the main Group subsidiary boards. Cathi
Raffaeli chairs the Standard Life Savings Limited and Elevate Portfolio
Services Limited boards, and Hannah Grove also sits on these boards. Time
commitment for their roles on these group boards are also considered as part
of the annual evaluation process.
Having carefully reviewed various inputs, including those outlined above and
each non-executive Director's contribution and capacity in 2024, the
Nomination and Governance Committee concluded that all non-executive Directors
continue to have sufficient time to dedicate to their role as independent
non-executive Directors of abrdn plc.
The service agreements/letters of appointment for Directors are available to
shareholders to view on request from the Company Secretary at the Company's
registered address (which can be found in the Shareholder information section)
and will be accessible for the 2025 AGM. Non-executive Directors are required
to confirm that they can allocate sufficient time to carry out their duties
and responsibilities effectively. As set out in their letters of appointment,
Non-executive Directors are also required to advise, support and challenge
across a number of areas including, but not limited to, strategy, performance,
risk and remuneration.
Director election and re-election
At the 2025 AGM, all of the Directors will retire and stand for election or
re-election. As well as in the Board of Directors section, the AGM Guide 2025
includes background information about the Directors, including the reasons why
the Chair, following the Directors' annual reviews, believes that their
individual skills and contribution support their election or re-election.
Details of Directors' outside appointments can be found in their biographies
on pages 88 to 91.
Advice
Directors may sometimes need external professional advice to carry out their
responsibilities. The Board's policy is to allow them to seek this where
appropriate and at the Group's expense. Directors also have access to the
advice and services of the Company Secretary. With the exception of
professional advice obtained by the Remuneration Committee, as detailed in
page 141, no independent professional advice was sought in 2024.
Board effectiveness
Review process
An externally facilitated review was last undertaken in 2022, and the 2024
effectiveness review, which considered all aspects of the Board's
effectiveness, was conducted internally, on behalf of the Board, by the Chair
and supported by the Company Secretary. A questionnaire was issued to each
Board member, which allowed individual feedback on a confidential basis. As
part of the review process, the questionnaire is also supplemented by a
year-end 1:1 discussion with the Chair, providing Directors with the
opportunity to raise any matters directly with the Chair.
The tone of the 2024 review was positive and concluded that the Board and its
Committees continued to operate effectively during 2024, with no material
issues or concerns raised and priorities for the coming year clarified.
Progress was noted on matters identified in the 2023 review and it was noted
that the Board is effective in monitoring culture and behaviour throughout the
Group, understands principal risks and assesses risk management assurance
processes well and acts collegiately and collaboratively, with Board members
having trust in the voice and opinions of others. The Chair again hosted a
conference in September 2024 bringing together non-executive directors from
the Group's subsidiary companies and EMEA-based fund boards. The main areas
arising from the 2024 review on which the Board looked to see continued
improvement in 2025, both in respect of its own effectiveness and that of its
Committees, were in relation to improving the insights within and brevity of
materials presented. The report also acknowledged that given the criticality
of human talent and technology to future sustainable success, succession
planning would remain a core focus for the Board, as would technology
development given its impact on the future of asset and wealth management.
As in prior years, the report noted the strong levels of Board engagement and
participation, both in formal meetings and other Board initiatives, such as
the BEE programme. The report also recognised positively Board dynamics, the
effectiveness of Board Committees and the breadth of knowledge and experience
of Board members. Maintaining these attributes was seen as essential to the
Company's successful navigation of current macro-economic challenges and the
delivery of its desired strategic outcomes.
Chair
The review of Sir Douglas's performance as Chair is led by the SID, Jonathan
Asquith, supported by the Company Secretary. It is based on feedback given in
returned questionnaires specifically regarding the Chair's performance and
discussions between the SID and the other non-executive Directors. The
feedback is summarised into a report which is considered by the Directors in a
meeting led by Jonathan Asquith and without Sir Douglas being present. It was
noted that the Chair's industry experience, style and development of the Board
continued to be of significant benefit to the Group. As with the main Board
evaluation, the continued focus on delivery for shareholders and other
stakeholders is a key priority and the important role that the Chair plays in
supporting the execution of the Group's strategy was recognised. As part of
the process, Jonathan Asquith meets with Sir Douglas to pass on feedback from
the review directly and his final report is made available to all
non-executive Directors.
Directors
An important part of the annual effectiveness review process is the individual
evaluation of each member of the Board. This process is undertaken personally
by the Chair and this year was conducted through year-end bilateral
discussions with each Board member to a specific agenda. These discussions ran
alongside the broader effectiveness process and fed into Nomination and
Governance Committee's consideration of director re-election and ongoing
succession planning. In addition to discussing individual performance,
consideration was also given to Non-Executive Directors' time commitment and
capacity, conflicts of interest, any individual training and development needs
and broader Company engagement opportunities.
Director induction and development
The Chair, supported by the Company Secretary, is responsible for arranging a
comprehensive preparation and induction programme for all new Directors. The
programme takes their background, knowledge and experience into account. If
relevant, Directors are required to complete the FCA's approval process before
they are appointed and Directors self-certify annually that they remain
competent to carry out this aspect of their role. These processes continue to
adapt to meet evolving best practice in respect of the Senior Managers and
Certification Regime.
The formal preparation and Induction programme includes:
- Meetings with the executive Directors and the members of the GOC
and the ELT.
- Focused technical meetings with internal experts on specific areas
including the three businesses, regulatory reporting, sustainability, conduct
risk, risk and capital management, and financial reporting.
- Visits to business areas to meet our people and gain a better
insight into the operation of the business and its culture.
- Meetings with the external auditors and contact with the FCA
supervisory teams.
- Meetings with the Company Secretary on the Group's corporate
governance framework and the role of the Board and its Committees.
- Meetings with the Chief Risk Officer on the risk management
framework as well as meetings on their individual responsibilities as holders
of a Senior Management Function role.
Background information is also provided including:
- Key Board materials and information, stakeholder and shareholder
communications and financial reports.
- The Group's organisational structure, strategy, business
activities and operational plans.
- The Group's key performance indicators, financial and operational
measures and industry terminology.
The induction programme provides the background knowledge new Directors need
to perform to a high level as soon as possible after joining the Board and its
Committees and to support them as they build their knowledge and strengthen
their performance further.
When Directors are appointed to the Board, they make a commitment to broaden
their understanding of the Group's business. The Secretariat, Finance, Risk
and Reward teams monitor relevant external governance and risk management,
financial and regulatory developments and keep the ongoing Board training and
information programme up to date. Specific Board and Committee awareness and
deep-dive sessions took place on:
- Macro trends.
- Cyber resilience.
- Corporate reform.
- abrdn's Internal Capital and Risk Assessment.
- Operational resilience self-assessment.
- Transformation.
- Sustainability.
- Technology.
- FCA Consumer Duty.
- Vulnerable Customers.
- Investments business.
- Equities.
(iv) Audit, risk and internal control
The Directors retain the responsibility to state that they consider the Annual
report and accounts, taken as a whole, is fair, balanced and understandable,
presents an assessment of the Company's position and prospects and presents
the necessary information for shareholders to assess the business and
strategy. They also recognise their responsibility to establish procedures to
manage risk and oversee the internal control framework. The Directors'
responsibilities statement is on page 149. The reports from the Audit
Committee and the Risk and Capital Committee Chairs show how the Committees
have supported the Board in meeting these responsibilities.
The Board's view of its principal and emerging risks and how they are being
managed is contained in the Risk management section of the Strategic report on
pages 82 to 85.
Annual review of internal control
The Directors have overall responsibility for the governance structures and
systems of the Group, which includes the ERM framework and system of internal
control, and for the ongoing review of their effectiveness. The framework is
designed to manage, rather than eliminate, risk and can only provide
reasonable, not absolute, assurance against material misstatement or loss. The
framework covers all of the risks as set out in the Risk management section of
the Strategic report.
In line with the requirements of the Code, the Board has reviewed the
effectiveness of the system of internal control. The Audit Committee undertook
the review on behalf of the Board and reported the results of its review to
the Board. The system was in place throughout the year and up to the date of
approval of the Annual report and accounts 2024.
The review of abrdn's risk management and internal control systems was carried
out drawing on inputs across the three lines of defence taking into account
the operation of each component of the Enterprise Risk Management Framework.
The business continues to make control improvements to meet increasing
regulatory expectations, particularly, in the areas of operational resilience
and third-party oversight. 2024 has seen the business continue to strengthen
controls within its operating model through better definition of
accountability and processes. Technology advances and the implementation of
actions around the Consumer Duty and Operational Resilience regulations
continue to drive further improvements in the control environment. The Finance
function operates a set of defined processes which operate over all aspects of
financial reporting, which includes the senior review and approval of
financial results, controlled processes for the preparation of the IFRS
consolidation, and the monitoring of external policy developments to ensure
these are adequately addressed. These processes include the operation of a
Technical Review Committee and the Financial Reporting Executive Review Group
to provide senior review, challenge and approval of relevant disclosures,
accounting policies, and changes required to comply with external
developments.
The Board's going concern statement is on page 148 and the Board's viability
statement is on page 80.
(v) Remuneration
The Directors' remuneration report (DRR) on pages 122 to 141 sets out the work
of the Remuneration Committee and its activities during the year, the levels
of Directors' remuneration and the shareholder approved remuneration policy.
The Company's approach to investing in and rewarding its workforce is set out
on page 136 of the DRR. The Board believes that its remuneration policies and
practices are designed to support the Company's strategy and long-term
sustainable success. More information about the policies and practices can be
found in the DRR.
Other information
You can find details of the following, as required by FCA Disclosure and
Transparency Rule 7.2.6, in the Directors' report and in the Directors'
remuneration report:
Share capital
- Significant direct or indirect holdings of the Company's
securities.
- Confirmation that there are no securities carrying special rights
with regard to control of the Company.
- Confirmation that there are no restrictions on voting rights in
normal circumstances.
- How the Articles can be amended.
- The powers of the Directors, including when they can issue or buy
back shares.
Directors
- How the Company appoints and replaces Directors.
- Directors' interests in shares.
Board meetings and meeting attendance
The Board and its Committees meet regularly, operating to an agreed timetable.
Meetings are usually held in Edinburgh or London. During the year, the Board
held specific sessions to consider the Group's strategy and business planning.
The Chair and the non-executive Directors also met during the year, formally
at each Board meeting, and informally, without the executive Directors present
and where matters including executive performance and succession and Board
effectiveness were discussed. The Board scheduled nine formal meetings and a
focused strategy meeting in 2024.
Directors are required to attend all meetings of the Board and the Committees
they serve on, and to devote enough time to the Company to perform their
duties. Board and Committee papers are distributed before meetings other than,
by exception, urgent papers which may need to be tabled at the meeting. If
Directors are not able to attend a meeting because of conflicts in their
schedules, they receive all the relevant papers and have the opportunity to
submit their comments in advance to the Chair or to the Company Secretary. If
necessary, they can follow up with the Chair of the meeting. Recognising that
some Directors may have existing commitments they cannot change at very short
notice, the Board has established the Standing Committee as a formal procedure
for holding unscheduled meetings. The Standing Committee meets when,
exceptionally, decisions on matters specifically reserved for the Board need
to be taken urgently. All Directors are invited to attend Standing Committee
meetings. The Standing Committee met once during 2024.
The Company Chair is not a member of the Audit, Risk and Capital, or
Remuneration Committees. He is invited to attend meetings of all Committees,
by invitation, in order to keep abreast of their discussions and routinely
does so. The table below reflects the composition of the Board and Board
Committees during 2024 and records the number of meetings and members'
attendance.
Board Audit Committee Nomination and Governance Committee Remuneration Committee Risk and Capital Committee
Chair
Sir Douglas Flint 10/10 - 3/3 - -
Executive Directors
Jason Windsor 10/10 - - - -
Non-executive Directors
Jonathan Asquith 10/10 - 3/3 8/8 -
John Devine 10/10 5/6 3/3 - 6/6
Hannah Grove 10/10 - 3/3 8/8 -
Pam Kaur 10/10 6/6 - - 6/6
Cathleen Raffaeli 10/10 - - 8/8 6/6
Vivek Ahuja (appointed on 1 October 2024) 2/2 2/2 - - -
Katie Bickerstaffe (appointed on 1 October 2024) 2/2 - - 2/2 -
Mike O'Brien 10/10 6/6 - - 5/6
Former members
Stephen Bird (stood down 24 May 2024) 4/4 - - - -
Catherine Bradley (stood down 24 April 2024) 4/4 2/2 1/1 3/3 -
Tenure as at March 2025
0-3 years: 5
3-5 years: 1
5+ years: 4
Board Committees
abrdn plc Board
Audit Committee Remuneration Committee Nomination and Governance Committee Risk and Capital Committee
The Board has established Committees that oversee, consider and make
recommendations to the Board on important issues of policy and governance. At
each Board meeting, the Committee chairs provide reports of the key issues
considered at recent Committee meetings, and minutes of Committee meetings are
circulated to the appropriate Board members. This includes reporting from the
Chair of the Audit Committee on any whistleblowing incidents which have been
escalated to them. The Committees operate within specific terms of reference
approved by the Board and kept under review by each Committee.
These terms of reference are published within the Board Charter on our website
at www.abrdn.com (www.abrdn.com)
Executive and Non-executive mix
Non-executive: 9
Executive: 1
All Board Committees are authorised to engage the services of external
advisers at the Company's expense, whenever they consider this necessary. With
the exception of fees paid to external advisers of the Remuneration Committee,
as detailed on page 141, no such expense was incurred during 2024.
Committee reports
This statement includes reports from the chairs of the Audit Committee, the
Risk and Capital Committee and the Nomination and Governance Committee. The
report on the responsibilities and activities of the Remuneration Committee
can be found in the Directors' remuneration report section.
The Committee Chairs are happy to engage with you on their reports. Please
contact them via questions@abrdnshares.com
1. Audit Committee report
The Audit Committee assists the Board in discharging its responsibilities for
external financial and material non- financial reporting, internal controls
over financial reporting and the relationship with the external auditors.
I am pleased to present my report as Chair of the Audit Committee (the
Committee).
Following Catherine Bradley's announcement of her intention not to stand for
re-election at the 2024 AGM, the Board requested that I take on the Chair role
of the Audit Committee on an interim basis until a suitable replacement was
identified. Vivek Ahuja has now been appointed to this role from 1 January
2025.
While the Committee focuses its attention primarily on the Company's financial
and non-financial control framework, during 2024 it has also put specific
governance emphasis on:
The Committee also continued to focus on the quality of financial reporting.
While ensuring we fulfil our delegated responsibilities on behalf of the
Board, the Audit Committee continues to be a dynamic forum which benefits from
a high degree of transparency from management, enabling effective discussion
and decision making. This will remain fundamental to the Committee's
effectiveness and its oversight of the Company's financial and non-financial
reporting and control environment during 2025.
The report is structured in four parts:
(1) Governance
(2) Report on the year
(3) Internal audit
(4) External audit
John Devine
Chair, Audit Committee
(i) Governance
Membership
All members of the Audit Committee are independent non-executive Directors.
For their names, the number of meetings and committee member attendance during
2024, please see the table on page 104.
The Board believes Committee members have the necessary range of financial,
risk, control and commercial expertise required to provide effective challenge
to management and have competence in accounting and auditing as well as recent
and relevant financial experience. John Devine is a member of the Chartered
Institute of Public Finance and Accounting and had previously chaired the
Company's Audit Committee. Pam Kaur is a qualified chartered accountant. Mike
O'Brien is a fellow of the Institute and Faculty of Actuaries. Vivek Ahuja,
who took on the role of Chair of the Committee on 1 January 2025, has
extensive experience in international financial services and private equity.
In his executive career, he was most recently CEO of Terra Firma, a leading
European Private Equity firm and, prior to that, Deputy Group CFO at Standard
Chartered plc. He is a qualified chartered accountant who brings broad
commercial and operational experience spanning finance, strategy, business and
cultural transformation, risk management and corporate governance and is an
experienced non-executive Director. The Committee members are also members of
audit committees related to their other non-executive Director roles.
Invitations to attend Committee meetings are extended to the Chair, the Chief
Executive Officer, the Chief Financial Officer, the Group Financial
Controller, the Chief Internal Audit Officer and the Group Chief Risk Officer,
as well as the external auditors.
The Audit Committee meets privately for part of its meetings and also has
regular private meetings separately with the external auditors and the Chief
Internal Audit Officer. These meetings address the level of co-operation and
information exchange and provide an opportunity for participants to raise any
concerns directly with the Committee.
Key responsibilities
The Audit Committee's responsibilities are to oversee, and report to the Board
on:
- The appropriateness of the Group's accounting and accounting
policies, including the going concern presumption and viability statement.
- The findings of its reviews of the financial information in the
Group's annual and half year financial reports.
- The clarity of the disclosures relating to accounting judgements
and estimates.
- Its view of the 'fair, balanced and understandable' reporting
obligation.
- The findings of its review of certain Group prudential external
disclosures.
- Internal controls over financial reporting.
- Sustainability disclosures relating to financial and quantitative
information.
- Liaison with the Remuneration Committee on any financial reporting
matters related to the achievement of targets and measures.
- Outcomes of investigations resulting from whistleblowing.
- The appointment or dismissal of the Chief Internal Audit Officer,
the approved internal audit work programme, key audit findings and the quality
of internal audit work.
- The skills of the external audit team and their compliance with
auditor independence requirements, the approved audit plan, the quality of the
firm's execution of the audit, and the agreed audit and non-audit fees.
- Internal controls over financial reporting.
In carrying out its duties, the Committee is authorised by the Board to obtain
any information it needs from any Director or employee of the Group. It is
also authorised to seek, at the expense of the Group, appropriate external
professional advice whenever it considers this necessary. The Committee did
not need to take any independent advice during the year.
In accordance with the Senior Managers and Certification Regime the Audit
Committee Chair is responsible for the oversight of the independence, autonomy
and effectiveness of our policies and procedures on whistleblowing including
the procedures for the protection of employees who raise concerns related to
detrimental treatment. Throughout the year the Audit Committee Chair met
regularly with the Chief Internal Auditor, the external audit partner, the
Chief Sustainability Officer - Investments and the Global Head of Corporate
Sustainability to discuss their work, findings and current developments.
Committee effectiveness
The Committee reviews its remit and effectiveness each year. Following the
externally facilitated review in 2023, the 2024 review was conducted
internally, on behalf of the Board, by the Company Secretary. The review
concluded that the Committee continued to operate effectively during 2024 with
no material issues or concerns raised. More information about the process
involved, and its outcomes, can be found on page 101.
(ii) Report on the year
Audit agenda
As well as regular reporting, agenda items were aligned to the annual
financial cycle as set out below:
What was discussed
Jan-Mar - Annual report and accounts 2023.
- Strategic report and financial highlights 2023.
- Financial reporting judgements.
- Liaison with the Remuneration Committee on any financial reporting matters
related to the achievement of targets and measures.
- External auditor's review of Full year results.
- Whistleblowing.
- Sustainability reporting.
- Effectiveness of the Internal Audit function.
Apr-Jun - Internal audit findings.
- Prudential and Regulatory reporting.
- Initial financial reporting matters for Half year 2024.
- Whistleblowing.
- External auditor's management letter, and audit strategy.
- Transformation programme
Jul-Sep - Half year results 2024.
- External auditors' review of Half year results.
- External auditors' independence.
- Internal audit findings.
- Whistleblowing.
- Material legal actions and open litigations
Oct-Dec - Initial financial reporting matters for Full year 2024, including pension
scheme assumptions.
- Non-audit services policy.
- The internal audit plan and charter.
- Internal audit findings.
- Effectiveness of the external auditors and related non-audit services.
- External audit tender.
- Whistleblowing.
- Sustainability reporting.
- Risk management and internal control system annual review and future
plans.
- Transformation programme
- Corporate and Audit Reform update.
The indicative proportion of time spent on the business of the Committee is
illustrated below:
Diagram removed for the purposes of this announcement. However it can be
viewed in full in the pdf document
Detail of work
The focus of work in respect of 2024 is described below.
Financial and non-financial reporting
Our Annual report and accounts are prepared in accordance with International
Financial Reporting Standards (IFRS). The Committee believes that some
Alternative Performance Measures (APMs), which are also called non-GAAP
measures, can add insight to the IFRS reporting and help to give shareholders
a fuller understanding of the performance of the business. The Committee
considered the presentation of APMs and related guidance as discussed further
in the 'Fair, balanced and understandable' section below.
The Committee reviewed the Group accounting policies and confirmed they were
appropriate to be used for the 2024 Group financial statements. This year
there were no new accounting standards which had a significant impact on the
Group accounting policies.
The Committee reviewed the basis of accounting and in particular the
appropriateness of adopting the going concern basis of preparation of the
financial statements. In doing so, it considered the Group's cash flows
resulting from its business activities and factors likely to affect its future
development, performance and position together with related risks, as set out
in more detail in the Strategic report. The Committee recommended the going
concern statement to the Board.
In addition, the Committee considered the form of the viability statement and
in particular whether the three-year period remained appropriate, and
concluded that it did. This reflects both our internal planning cycle and the
timescale over which changes to major regulations and the external landscape
affecting our business typically take place. In formulating the statement, the
Committee considered the result of stress testing and reverse stress testing
presented to the Risk and Capital Committee. The Committee recommended the
viability statement to the Board.
During 2024, the Committee reviewed the Annual report and accounts 2023 and
the Half year results 2024. For both periods it received written and/or oral
reports from the Chief Financial Officer, the interim Chief Financial Officer,
the Company Secretary, the Chief Internal Audit Officer and the external
auditors. The Committee used these reports to aid its understanding of the
composition of the financial statements, to confirm that the specific
reporting standards and compliance requirements had been met and to support
the accounting judgements and estimates. Following its reviews, the Committee
was able to recommend the approval of each of the reports to the Board, being
satisfied that the full and half year financial statements complied with laws
and regulations and had been appropriately compiled.
The Committee recognises the importance of sustainability reporting. During
2024 the Committee discussed and reviewed the sustainability reporting
landscape and the related governance framework at a number of meetings. In
particular, as part of the review of the Annual report and accounts, the
Committee reviewed content relating to the Task Force on Climate-Related
Financial Disclosures (TCFD). The Committee's review focused on ensuring
metrics and outcomes were appropriately explained and validated. KPMG in their
role as auditor have reviewed our TCFD disclosures as part of their audit
engagement. More information can be found on page 112.
Accounting estimates and judgements
The Audit Committee considered all estimates and judgements that Directors
understood could be material to the 2024 financial statements. The Committee
also focused on disclosure of these key accounting estimates and judgements.
Significant accounting estimates, judgements and assumptions for the year How the Audit Committee addressed these significant accounting estimates and
ended 31 December 2024 assumptions
Goodwill impairment reviews
Goodwill is required to be tested annually for impairment and the The Committee spent time reviewing and challenging recoverable amount
determination of recoverable amounts for this impairment assessment is a key assumptions at three meetings.
area of estimation. The impairment assessment is performed by comparing the
carrying amount of each cash-generating unit (CGU) with its recoverable For Finimize, the Committee noted that the business is inherently difficult to
amount, being the higher of its value in use (VIU) and fair value less costs value as there are few directly comparable companies and therefore there are a
of disposal (FVLCD). In 2024 an impairment of goodwill was recognised in range of reasonable valuations. The Committee discussed the valuation
relation to the Finimize CGU (impairment of £5m) within Other business assessment with management and agreed that the recoverable amount was within
operations and corporate costs and therefore the determination of the the reasonable range.
recoverable amount for this CGU was a key judgement which directly impacted
the amount of the impairment. The impairment reflects higher anticipated The Committee agreed with management's view that the goodwill for the
losses in the period prior to which abrdn anticipates Finimize is likely to interactive investor and abrdn financial planning CGUs were not impaired.
achieve profitability and the related Group support required in this period.
Following this impairment, there is no remaining goodwill for Finimize. The Committee noted the inherent sensitivity of the recoverable amounts and
supported the disclosure of appropriate sensitivities.
The recoverable amount for Finimize was determined based on FVLCD, with the
primary approach being a revenue multiple valuation approach. Further details on goodwill impairment reviews are disclosed in Note 13 of the
Group financial statements.
Goodwill relating to the interactive investor and abrdn financial planning
CGUs were also tested for impairment and the recoverable amounts, based on
FVLCD, indicated that no impairments were required.
UK defined benefit pension plan
In compiling a set of financial statements, it is necessary to make some The Committee considered the proposed assumptions taking into account market
judgements and estimates about outcomes that are dependent on future events. data and information from pension scheme advisors.
This is particularly relevant to the defined benefit pension plan surplus
which is inherently dependent on how long people live and future economic Note 31 of the Group financial statements provides further details on the
outcomes. actuarial assumptions used, and sets out the impact of mortality, discount
rate and inflation sensitivities. Note 31 also provides details on the
For the principal UK defined benefit pension plan, the Committee reviewed the accounting policy applied and accounting policy judgements relating to the
assumptions for mortality, discount rate and inflation. Group's assessment that it has an unconditional right to a refund of a
surplus, and the treatment of tax relating to this surplus.
Tritax contingent consideration fair value
In 2021, the abrdn group purchased 60% of the membership interests in Tritax The Committee analysed and discussed management's assumptions underlying the
Management LLP. Subject to certain conditions, an additional contingent fair value of the contingent consideration at 31 December 2024 and agreed
deferred earn-out is expected to be payable to acquire the remaining 40% of that the fair value was within the reasonable range. The Committee reviewed
membership interests in Tritax should the selling partners choose to exercise and supported that disclosure of sensitivities to key assumptions should be
put options in respect of each of the years ended 31 March 2024, 31 March 2025 provided given the inherent uncertainties in the valuation. See Note 36 of the
and 31 March 2026. The amount payable is linked to the EBITDA of the Tritax Group financial statements for further details.
business in the relevant period. abrdn has the right to purchase any
outstanding interests at the end of 2026 through exercising a call option.
The contingent consideration liability is required to be recognised at fair
value, which is primarily dependant on future earnings projections.
- Oversight of the Group's transformation programme, designed to
restore our core Investments business to an acceptable level of profitability
and allow for incremental reinvestment into growth areas.
- Significant changes in senior personnel in the Finance function.
- Oversight of the work required to support compliance with the
changes introduced in the 2024 UK Corporate Governance Code.
- Oversight of the Group's external audit tender process.
Significant accounting estimates, judgements and assumptions for the year How the Audit Committee addressed these significant accounting estimates and
ended 31 December 2023 assumptions
Investments in subsidiaries
In relation to the abrdn plc Company only accounts, an assessment is made at The Committee discussed the investment in subsidiaries impairment assessment
each reporting date as to whether there are any indicators of impairment in with management and noted that the judgements in relation to these assessments
relation to investments in subsidiaries. At year end 2024 management noted were materially the same as the judgements relating to the goodwill impairment
that the Company's net assets attributable to shareholders of £4.4bn (post reviews. The Committee supported the view that relevant disclosures were made
impairments) continues to be higher than the Company's market capitalisation in the Company only accounts including disclosure that appropriate
of £2.6bn. Taking this into account along with the payment by abrdn consideration had been given to the Company net assets being higher than the
Investment Holdings Limited (aIHL) and abrdn Holdings Limited (aHL) of abrdn market capitalisation. The Committee noted that the Company's
dividends of £102m and £40m respectively to the Company in 2024 and the distributable profits were £2.9bn which continued to provide support for the
continued headwinds facing active asset managers, it was assessed that there dividend policy.
were indicators of impairments in relation to aIHL and aHL, the Company's
asset management holding companies. Following the performance of valuation Further details on the assessment of investments in subsidiaries are set out
exercises, impairments of aIHL and aHL of £115m and £15m respectively have in Note A of the Company financial statements section.
been recognised.
Indicators of impairment were also identified in relation to abrdn Financial
Planning Limited (aFPL). aFPL paid distributions in specie totalling £47m in
2024 following the sale of abrdn Financial Planning and Advice to another
subsidiary of the Company. Following this the valuation of aFPL was £1 and an
impairment of £45m has been recognised.
No other indicators of impairment were identified on any material investment
in subsidiaries including ii which, as noted above, is also fully supported by
a valuation exercise performed for goodwill purposes.
Principal risks are disclosed in the Strategic report and recommended to the
Board by the Risk and Capital Committee. The Committee was satisfied that the
estimates and quantified risk disclosures in the financial statements were
consistent with the Strategic report. The Committee concluded that appropriate
judgements had been applied in determining the estimates and that sufficient
disclosure had been made to allow readers to understand the uncertainties
surrounding outcomes.
Fair, balanced and understandable
The Committee supported management's continued aim to compile the Annual
report and accounts to be 'fair, balanced and understandable'.
abrdn's principles
To create clarity on fair, balanced and understandable for abrdn, a set of
principles is applied, as set out below:
Fair - The narrative contained in the Annual report and accounts is honest,
accurate and comprehensive.
'We are being open and honest in the way we present our discussions and
analysis, and are providing what we believe to be an accurate assessment of - The key messages in the narrative in the Strategic report and Governance
business and economic realities.' sections of the Annual report and accounts reflect the financial reporting
contained in the financial statements.
- The Key Performance Indicators (KPIs) for the period are consistent with
the key messages outlined in the Strategic report.
Balanced - The Annual report and accounts presents both successes and challenges
experienced during the year and, as appropriate, reflects those expected in
'We are fully disclosing our successes, the challenges we have faced in the the future.
period, and the challenges and opportunities we anticipate in the future; all
with equal importance and at a level of detail that is appropriate for our - The level of prominence we give to successes in the year versus challenges
stakeholders.' faced is appropriate.
- The narrative and analysis contained in the Annual report and accounts
effectively balances the information needs and interests of each of our key
stakeholder groups.
Understandable - The layout is clear and consistent and the language used is simple and
easy to understand (industry specific terms are defined where appropriate).
'The language we use and the way we structure our report is helping us present
our business and its performance clearly; in a way that someone with a - There is a consistent tone across and good linkage between all sections in
reasonably informed knowledge of financial statements and our industry would a manner that reflects a complete story and clear signposting to where
understand.' additional information can be found.
Activities
An Internal Review Group (IRG) is in place which reviews the Annual report and
accounts specifically from a fair, balanced and understandable perspective and
provides feedback to our financial reporting team on whether it conforms to
our standards. The members of the IRG are independent of the financial
reporting team and include colleagues from Investor Relations, Sustainability
reporting, Risk, Internal Audit, Communications and Strategy.
The key points discussed by the IRG covered:
- The overall balance and tone of reporting.
- The balance of messaging on net flows in the year.
- How adjustments between IFRS metrics and APMs have been reported.
Fair, balanced and understandable guidance was provided to relevant
stakeholders involved in the Annual report and accounts production process.
The Audit Committee, reviewed the messaging in the Annual report and accounts,
taking into account material received and Board discussions during the year.
Three drafts of the Annual report and accounts 2024 were reviewed by the Audit
Committee at three meetings. The Committee complemented its knowledge with
that of executive management and Internal Audit.
The Annual report and accounts goes through an extensive internal verification
process of all content to verify accuracy.
The Committee also reviewed the use and presentation of APMs which complement
the statutory IFRS results. This review considered guidelines issued by the
European Securities and Markets Authority in 2016 and the thematic reviews by
the Financial Reporting Council (FRC). A Supplementary information section is
included in the Annual report and accounts to explain the rationale for using
these metrics and to provide reconciliations of these metrics to IFRS measures
where relevant. This section also provides increased transparency over the
calculation of reported financial ratios.
Adjusted operating profit and adjusted profit before tax are key profit APMs.
The Committee considered whether the allocation of items to adjusted operating
profit was in line with the defined accounting policies, consistent with
previous practice and appropriately disclosed. Where there were judgemental
areas, such as in relation to certain interactive investor related costs, the
Committee specifically reviewed the proposed treatments and ensured that the
Annual report and accounts provided appropriate disclosures.
The Audit Committee agreed to recommend to the Board that the Annual report
and accounts 2024, taken as a whole, is fair, balanced and can be understood
by someone with a reasonably informed knowledge of financial statements and
our industry.
Prudential reporting
The Committee also considered disclosures relating to IFPR (Investment Firms
Prudential Regime) results included in the Strategic report and notes sections
of the Annual report and accounts and half year reporting, together with
related assurance over these disclosures.
Internal controls
As noted earlier, the Directors have overall responsibility for abrdn's
internal controls and for ensuring their ongoing effectiveness. This does not
extend to associates and joint ventures. Together with the Risk and Capital
Committee, the Committee provides comfort to the Board of their ongoing
effectiveness.
Internal Audit regularly reviews the effectiveness of internal controls and
reports to the Committee and the Risk and Capital Committee.
The Finance function sets formal requirements for financial reporting which
apply to the Group as a whole, defines the processes and detailed controls for
the consolidation process and reviews and challenges reporting submissions.
Further, the Finance function runs a Technical Review Committee and is
responsible for monitoring external technical developments. The Committee
focuses on ensuring appropriate sign-offs on financial results are provided,
and a mechanism for the escalation of issues from major regulated subsidiary
Boards is in place.
The Committee oversees and monitors controls over financial and non-financial
reporting, considering reports from management on the control environment and
status of remediation activities where appropriate. This directly supports the
review and assessment of reporting by the Committee.
In 2024 the Committee monitored control environment developments supported by
investments in technology. Particular focus was also given to certain controls
over revenue and the control over journal entries in certain components of the
group, and associated actions. In H2 2024, the Committee discussed the impact
of historic billing issues reflected in financial results for the current year
reporting.
In 2025, the Committee will continue to oversee actions taken to strengthen
and enhance controls in these areas, alongside the wider control environment.
This is with a view to enhancing the control environment, supporting reduced
reliance on substantive testing and compensating controls in aspects of the
audit.
Whistleblowing
Our people are trained via mandatory training modules to detect the signs of
possible fraudulent or improper activity and how to report concerns either
directly or via our independent whistleblowing hotline. The Committee Chair is
the designated whistleblower's champion and the Committee receives regular
updates on the operation of the whistleblowing procedures (Speak Up) from the
Head of Conduct, Conflicts and Training. The anonymised reports include a
summary of the incidents raised as whistleblowing, and information on
developments of the arrangements in place, to ensure concerns can be raised in
confidence about possible malpractice, wrongdoing and other matters.
The Committee oversees the findings of investigations and required follow-up
action. If there is any allegation against the Risk and Internal Audit
functions, the Committee directs the investigation. The Committee is satisfied
that the Group's procedures are currently operating effectively. The Committee
Chair reports to the Board on the updates the Committee receives.
(iii) Internal audit
The role and mandate of the Internal Audit function is set out in its Charter,
which is reviewed and approved by the Committee annually. Whilst Internal
Audit maintains a relationship with the external auditors, in accordance with
relevant independence standards, the external auditors do not place reliance
on the work of Internal Audit. The internal audit plan is reviewed and
approved by the Committee at least annually and is flexed during the year to
respond to internal and external developments. The function's coverage aligns
to the Group's activities and footprint, taking account of local internal
audit requirements. Regular reporting is provided to the Committee to
illustrate plan progress, any emerging risks or themes and the status of
implementation of recommendations.
The Committee assesses the independence and quality assurance practices of the
Internal Audit function and agrees the effectiveness of the function, aligned
to the Group's objectives on an annual basis. Independent external reviews are
also undertaken at regular intervals. The most recent one was completed in H2
2021 by Deloitte who assessed the abrdn internal audit function as having the
highest overall rating with conformance against all aspects of the Institute
of Internal Auditors' International Professional Practices Framework (IPPF)
and the Internal Audit Financial Services Code of Practice (the Standards).
The Committee's own review of the function in 2024 was positive and supports
the continuous evolution and enhancement of Internal Audit.
The Committee Chair meets the Chief Internal Audit Officer periodically,
without management being present.
(iv) External auditors
The appointment
The Committee has responsibility for making recommendations to the Board on
the reappointment of the external auditors, determining their independence
from the Group and its management and agreeing the scope and fee for the
audit. Following its review of KPMG's performance, the Committee concluded
that there should be a resolution to shareholders to recommend the
reappointment of KPMG at the 2025 AGM. The Committee confirms that the
recommendation to vote in favour of the reappointment of KPMG is free from
influence by a third party and no contract to which the Company is party
restricts the members' choice in respect of the external auditor.
The Committee complies with the UK Corporate Governance Code, the FRC Guidance
on Audit Committees with regard to the external audit tendering timetable, the
provisions of the EU Regulation on Audit Reform, and the Competition and
Markets Authority Statutory Audit Services Order with regard to mandatory
auditor rotation and tendering. The Committee also complied with the
requirements of the FRC's Audit Committees and the External Audit: Minimum
Standard for the year ended 31 December 2024.
The audit was last subject to a tender during the first half of 2016, and on
17 May 2016 the Company announced its intention to appoint KPMG as its auditor
for the year ending 31 December 2017, replacing PwC who were the Company's
previous auditors.
In March 2017, the proposed acquisition of Aberdeen Asset Management PLC was
announced. Consequently, the Standard Life plc Audit Committee (now abrdn plc)
sought assurance that KPMG's independence would not be compromised as a result
of their previous position as external auditor of Aberdeen Asset Management
PLC, from its incorporation in 1983 until 30 September 2015. While recognising
that the KPMG tenure had ceased nearly two years prior to the proposed
acquisition, a paper outlining the matters which had been considered was
brought to the Committee and, following review, the Committee was satisfied
that there were no impacting issues.
KPMG's independence has subsequently been regularly reviewed by the Committee,
which remains satisfied of their independence. Further detail on this
assessment is set out below. The Committee considers KPMG's tenure for abrdn
plc and its group of companies to run from the completion of the 2016 tender
exercise and their appointment for year end in 2017.
The audit for the year ended 31 December 2024 is, therefore, KPMG's 8th year
as auditor. The Senior Statutory Auditor is Richard Faulkner. The Committee
has continued to follow the annual appointment process and has concluded that
a tender for the 2024 year end was not required. This is currently considered
to be in the best interests of the Company taking into account the results of
the formal review of the effectiveness of the KPMG audit discussed in this
section. In October 2024, the Committee approved holding an audit tender
process in 2025, effective for the 2027 year end. This is in line with
mandatory tender requirements, with the 2026 year end being KPMG's 10th year
as auditor.
Auditor independence
The Board has an established policy (the Policy) setting out which non-audit
services can be purchased from the firm appointed as external auditors. The
Committee monitors the implementation of the Policy on behalf of the Board.
The aim of the Policy, which is reviewed annually, is to support and safeguard
the objectivity and independence of the external auditors and to comply with
the revised FRC Ethical standards for auditors (Ethical Standards). It does
this by prohibiting the auditors from carrying out certain types of non-audit
services, and by setting out which non-audit services are permitted. It also
ensures that where fees for approved non-audit services are significant, they
are subject to the Committee Chair's prior approval. KPMG has implemented its
own policy preventing the provision by KPMG of most non-audit services to FTSE
350 companies which are audit clients. A 70% fee cap on non-audit services to
audit clients is in place.
The services prohibited by the Policy are as set out in the FRC Revised
Ethical Standard 2024.
The Policy permits non-audit services to be purchased, following approval,
when they are closely aligned to the external audit service and when the
external audit firm's skills and experience make it the most suitable
supplier.
These include:
- Audit related services, such as regulatory reporting.
- Investment circular reporting accountant engagements.
- Attesting to services not required by statute or regulation.
- Other reports required by a regulator or assurance services
relating to regulatory returns.
- Sustainability and TCFD report audits/reviews.
- Fund merger assurance engagements, where the engagement is with
the manager and the external auditor is also the auditor of the fund.
KPMG has reviewed its own independence in line with these criteria and its own
ethical guideline standards. KPMG has confirmed to the Committee that
following its review it is satisfied that it has acted in accordance with
relevant regulatory and professional requirements and that its objectivity is
not impaired.
Having considered compliance with our Policy and the fees paid to KPMG, the
Committee is satisfied that KPMG has remained independent.
Audit and non-audit fees
The Group audit fee payable to KPMG in respect of 2024 was £7.5m (2023:
£7.2m). In addition, £2.7m (2023: £2.8m) was incurred on audit related
assurance services. Fees for audit related assurance services are primarily in
respect of client money reporting and the half year review. The Committee is
satisfied that the audit fee is commensurate with permitting KPMG to provide a
quality audit and monitors regularly the level of audit and non-audit fees.
Non-audit work can only be undertaken if the fees have been approved in
advance in accordance with the Policy for non-audit fees. Unless fees are
small (which we have defined as less than £75,000), the approval of the
Committee Chair is required.
Non-audit fees amounted to £0.9m (2023: £1.0m), of which £0.9m (2023:
£1.0m) related to other assurance services and £nil (2023: £nil) related
to other non-audit fee services. Other assurance services in 2024 primarily
related to control assurance reports, which are closely associated with audit
work. The external auditors were considered the most suitable supplier for
these services taking into account the alignment of these services to the work
undertaken by external audit and the firm's skill sets. The Committee also
monitors audit and non-audit services provided to non-consolidated funds and
were satisfied fees for those services did not impact auditor independence.
Further details of the fees paid to the external auditors for audit and
non-audit work carried out during the year are set out in Note 7 of the Group
financial statements.
The ratio of non-audit fees to audit and audit related assurance fees is 9%
(2023: 10%). The total of audit related assurance fees (£2.7m) and non-audit
fees (£0.9m) is £3.6m, and the ratio of these audit related assurance fees
and non-audit fees to audit fees is 48% (2023: 53%). As noted above the audit
related assurance fees are primarily fees in relation to required regulatory
reporting, where it is normal practice for the work to be performed by the
external auditor.
The Committee is satisfied that the non-audit fees do not impair KPMG's
independence.
Audit quality and materiality
The Committee places great importance on the quality of the external audit and
carries out a formal annual review of its effectiveness.
The Committee looks to the audit team's objectivity, professional scepticism,
continuing professional education and its relationship with management, all in
the context of regulatory requirements and professional standards.
Specifically:
- The Committee discussed the scope of the audit prior to its
commencement.
- The Committee reviewed the annual findings of the Audit Quality
Review team of the FRC in respect of KPMG's audits. The Committee was
satisfied insofar as the issues might be applicable to abrdn's audit, that
KPMG had proper and adequate procedures in place for our audit.
- The Committee approved a formal engagement with the auditor and
agreed its audit fee.
- The Committee Chair had regular meetings with the lead audit
partner to discuss Group developments.
- The Committee receives updates on KPMG's work and its findings and
compliance with auditor independence requirements.
- The Committee reviewed and discussed the audit findings including
audit differences prior to the approval of the financial statements. See the
discussion on materiality in the following paragraphs for more detail.
- The Committee also continued to monitor and discuss relevant
external matters in relation to KPMG as a firm.
The Committee discussed the accuracy of financial reporting with KPMG both as
regards accounting errors that would be brought to the Committee's attention
and as regards amounts that would need to be adjusted so that the financial
statements give a true and fair view. Differences can arise for many reasons
ranging from deliberate errors (fraud etc.) to good estimates that were made
at a point in time that, with the benefit of more time, could have been more
accurately measured. KPMG have set overall audit materiality at £13.2m (2023:
£13.7m) based on revenue (as set out in the KPMG independent auditors'
report). This is within the range in which audit opinions are conventionally
thought to be reliable. To manage the risk that aggregate uncorrected
differences become material, the Committee supported that audit testing would
be performed to a lower materiality threshold for individual reporting units.
Furthermore, KPMG agreed to draw the Committee's attention to all identified
uncorrected misstatements greater than £0.7m (2023: £0.7m). The aggregated
net difference between the reported pre-tax profit and the auditor's judgement
of pre-tax profit was less than audit materiality. The gross differences were
attributable to various individual components of the consolidated income
statement and balance sheet. No audit difference was material to any line item
in either the income statement or the balance sheet. Accordingly, the
Committee did not require any adjustment to be made to the financial
statements as a result of the audit differences reported by the external
auditors.
KPMG has confirmed to the Committee that the audit complies with their
independent review procedures.
2. Risk and Capital Committee report
I am pleased to present my report as Chair of the Risk and Capital Committee
(the Committee).
The Risk and Capital Committee supports the Board in providing effective
oversight and challenge of risk management and the use of capital across the
Group so as to ensure that we meet the expectations of our shareholders,
regulators, and clients.
During 2024 the Committee maintained its client-first focus in the management
of risk and capital matters. Particular emphasis was placed on client and
conduct risk, and operational and financial resilience. Throughout 2024, the
Committee considered the financial and strategic implications of the
challenging market and economic environment and the increased focus on
sustainability and geopolitical risks. The Committee continued to review and
challenge key activities undertaken by the business and advise the Board on
these, including:
- Enhancement of the Enterprise Risk Management Framework (ERMF).
- Delivery of the Group's ICARA and capital and liquidity
objectives.
- Conduct risks across our three businesses, the embedding of
Consumer Duty and the continuing support of vulnerable customers.
- Key project delivery updates from the transformation activity.
- The strengthening of anti-financial crime and anti-money
laundering processes and controls across the Group.
- Developments in the framework for managing investment risk.
- Maturing our approach to managing cyber resilience in line with
the US National Institute of Standards and Technology (NIST) framework.
- Ongoing simplification and diversification of the business model.
- The Group's exposure to emerging risks, including client,
sustainability and geopolitical risks and events.
Furthermore, the Committee has closely monitored regulatory developments from
across the world as regulators have progressed their priorities, including
operational resilience, ESG and innovation in technologies such as (AI).
Further details on these and other activities carried out by the Committee
during the year can be found in the report that follows
John Devine
Chair, Risk and Capital Committee
Membership
All members of the Risk and Capital Committee are independent non-executive
Directors. For their names, the number of meetings and Committee member
attendance during 2024, please see the table on page 104.
The Committee meetings are attended by the Chief Risk Officer. Others invited
to attend on a regular basis include the Chief Executive Officer, the Chief
Financial Officer, Group General Counsel, and the Chief Internal Auditor, as
well as the External Auditors.
Regular private meetings of the Committee's members were held during the year,
providing an opportunity to raise any issues or concerns with the Chair of the
Committee. The Committee's members have also held regular private meetings
with the Chief Risk Officer and with management and subject matter experts
outside of the Committee meetings, to support them in gaining an in-depth
understanding of specific topics.
Key responsibilities
The Company's purpose results in opportunities and exposure to a range of
risks and uncertainties. Understanding and actively managing the sources and
scale of these opportunities and risks are key to fulfilling this purpose.
The role of the Committee is to provide oversight and advice to the Board, and
where appropriate, the Board of each relevant Group company on the following:
- The Group's current risk strategy, material risk exposures and
their impact on the levels and allocations of capital.
- The structure and implementation of the Group's ERMF and its
ability to react to forward-looking issues and the changing nature of risks.
- Changes to the risk appetite framework and quantitative risk
limits.
- Risk aspects of major investments, major product developments and
corporate transactions.
- Regulatory compliance across the Group.
- Specific deep dives, including asset classes and the treatment of
vulnerable customers.
Further detail on the work performed in each of these areas is set out in the
report below.
In addition, the Committee acts as the Board Risk Committee for the Group's
two main UK investment companies, abrdn Investment Management Limited (aIML)
and abrdn Investments Limited (aIL). Accordingly, the CEO of these entities is
also invited to attend the Committee meetings.
In carrying out its duties, the Committee is authorised by the Board to obtain
any information it requires from any Director or employee of the Group. It is
also authorised to seek, at the expense of the Group, appropriate external
professional advice whenever it considers this necessary. The Committee did
not need to take any independent advice during the year.
The Committee's work in 2024
Overview
The Committee operates a dynamic agenda and uses each meeting to consider a
range of recurring items as well as other items that are more ad hoc and/or
more forward-looking in nature. An indicative breakdown as to how the
Committee spent its time is shown below:
Diagram removed for the purposes of this announcement. However it can be
viewed in full in the pdf document
The key recurring items which were considered by the Committee are:
- The 'Views on Risk' report - this provides an independent holistic
assessment from the Chief Risk Officer of the key risks and uncertainties
faced by the Group's businesses and the ongoing monitoring against risk
appetites.
- Conduct risks in each of abrdn's three main businesses, with a
focus on the embedding of the Consumer Duty requirements.
- Ongoing activity to enhance and develop abrdn's ERMF, including
the process for risk identification and conformance with the ERMF and Policy
Framework.
- Performance of the Group's ICARA processes in accordance with
IFPR, including the firm's stress and scenario testing programme. The ICARA
supports the Committee in understanding changes to the risk profile of the
Group and the capital position over time.
Through these recurring activities the Committee was able to challenge
management's assessment of risks and oversee the key actions being taken to
manage these risks.
In addition to reviewing these recurring items, the Committee provided
oversight of a broad range of topics in 2024. This included consideration of:
What was discussed
Jan-Mar - Advice provided to the Remuneration Committee regarding the delivery of
performance relative to risk appetites.
- Risk and Control Self Assessment (RCSA) reform and delivery.
- Property fund management review, with focus on liquidity.
- Findings from the abrdn Investment Management business Internal Controls
Report.
- Stress testing results from the ICARA process.
- Oversight of risk appetite metrics.
- Review of abrdn's principal risks and risk disclosures for the Annual
report and accounts.
Apr-Jun - Conduct risks for the ii business.
- Cyber risks and operational resilience.
- ESMA Liquidity Stress Testing framework.
- Bank counterparty credit approach.
- ICARA 2024 approach.
Jul-Sep - Conduct risks for the Adviser business.
- Response to the CrowdStrike incident.
- MLRO Annual report.
- Seed Company Investment Process.
Oct-Sep - ICARA process and FCA supervisory review.
- The remit of the Risk & Compliance function.
- Investments business management of Risks & Issues, including Conduct.
- ERMF Taxonomy.
- Conflicts of Interest.
- 2025 Monitoring & Oversight assurance plan.
After each meeting, the Committee Chair reports to the Board, summarising the
key points from the Committee's discussions and any specific recommendations.
Risk exposures and risk strategy
abrdn's risk appetite framework enables the communication, understanding and
control of the types and levels of risk that the Board is willing to accept in
its pursuit of the strategy of the Group. This includes the business plan
objectives and the capital and liquidity it requires.
The Committee has received regular reporting through the 'Views on Risk'
report on each of the Group's nine principal risks. The reporting has included
risk dashboards, commentary and management information.
The Committee continued to monitor the risk appetite measures and limits
against the approved Board risk appetites, revised in Q2, 2024. The Committee
considered changes to the risk profile in view of the external environment and
ongoing transformation of the business.
Through reviewing the Views on Risk reporting, the Committee supports the
Board by monitoring risk exposures and the resilience of the capital position
under current and stressed conditions. Key items that the Committee discussed
during the year in this context included:
- The risks associated with the delivery of the business plan.
- Components of the Group's risk appetite framework.
- The process of completion of the abrdn ICARA and its results.
- Improvements to anti-financial crime processes.
- Deepening the focus on conduct risks and embedding Consumer Duty.
- The management of cyber risk and operational resilience across the
Group.
Results from regular stress testing and scenario analysis has supported the
Committee in understanding, monitoring, and in managing the capital and
liquidity risk profile of the business under stressed conditions. These
results provided the Committee with a forward-looking assessment of the
Group's financial resilience in response to potentially significant adverse
events affecting key risk exposures. The material presented to the Committee
included combined stress scenarios which looked at simultaneous stresses
impacting on economic conditions, flows and idiosyncratic factors specific to
the Group.
From reviewing the stress testing and scenario analysis results, the Committee
concluded that the Group was financially resilient and there was no
requirement for the business to reduce its risk exposures.
The Committee reviewed the results of reverse stress testing to explore
extreme but plausible events which have the potential to cause the business to
become unviable. This allowed the Committee to assess both the risk of
business failure and the ability of the Group to prevent and mitigate this
risk.
From reviewing the reverse stress testing results, the Committee concluded
that the risk of the Group having to wind down due to these scenarios was
remote. This assessment was supported by the regular risk reporting presented
to the Committee, in particular the reporting on cyber and third-party risks
which are notable potential causes of business failure, as well as regular
updates on the Group's financial and operational resilience.
Enterprise Risk Management Framework (ERMF)
During the year, the business continued to evolve the ERMF which is used to
identify, assess, control, and monitor the Group's risks. In particular, the
Committee reviewed and supported key enhancements to the ERMF in respect of
the risk appetite framework, the RCSA process and the risk taxonomy.
The Committee has obtained assurance regarding the operation of the ERMF
through its review of regular content within the Views on Risk reporting
presented by the Chief Risk Officers. In particular, the risk appetite
dashboard and supporting indicators help the Committee to understand the
Group's risk profile relative to its defined risk appetite. Additionally, an
annual review of the effectiveness of the ERMF was undertaken which was
discussed and supported by the Committee.
Exceptions-based reporting is also provided to the Committee, setting out any
matters of significance in respect of the results of Policy compliance
reporting and also the actions being taken in response to material risk
events. These two items further support the Committee in performing its
oversight of the ERMF.
Regulatory developments and compliance
The Committee reviews and assesses regulatory compliance plans which detail
the planned schedule of monitoring activities to be performed by the Risk and
Compliance function to ensure there is appropriate coverage. Regular updates
on key findings from regulatory compliance activity and progress against the
plans were reported to the Committee through the Views on Risk report.
As a Committee we have closely monitored global regulatory developments to
understand and anticipate potential implications for both the Group and the
wider financial services sector. In particular the Committee paid close
attention to geopolitical risks and resulting operational implications. The
Committee has also closely followed regulatory developments and implementation
activity in relation to the new Consumer Duty requirements, operational
resilience, and new sustainability regulations.
Governance arrangements
The Committee has continued to refer to the work of those non-executive risk
committees operating in subsidiary companies to provide oversight and
challenge of risks within those subsidiaries. This has included the risk
committees in place for abrdn Life and Pensions Limited, Standard Life Savings
Limited and Elevate Portfolio Services Limited.
The Committee receives updates from, and reviews the minutes of, these
committees in order to maintain awareness and oversight of risks across the
Group. In addition to the Committee's review of reporting from the subsidiary
risk committees, arrangements also exist for the Committee's Chair to attend
these subsidiary risk committees on request.
In its capacity since January 2022 as the board risk committee for aIL and
aIML; the Group's two main UK investment firms, the Committee has routinely
considered the implications of Group risk management activities for these two
companies and identified any significant risk concerns to be brought to the
attention of the respective Boards, The Chair of the two investment company
Boards has a standing invitation to attend the Risk and Capital Committee.
During the year, the Committee provided advice to the Remuneration Committee
regarding the delivery of performance in the context of incentive packages. In
particular, the Committee considered whether performance had been delivered in
a manner that was consistent with the Group's strategy, risk appetite and
tolerances and its capital position. The provision of this advice helped to
ensure that the Group's overall remuneration practices are aligned to the
business strategy, objectives, culture, and long-term interests of the Group
and also that individual remuneration is consistent with, and promotes,
effective risk management.
Committee effectiveness
The Committee reviews its remit and effectiveness each year. The 2024 review
was conducted internally, on behalf of the Board, by the Company Secretary.
The review concluded that the Committee continued to operate effectively
during 2024, with no material issues or concerns raised. More information
about the process involved, and its outcomes, can be found on page 101.
3. Nomination and Governance Committee report
I am pleased to present my report as Chair of the Nomination and Governance
Committee (the Committee).
The Committee's main priorities during the year have been in managing
succession in the leadership of the firm and in ensuring that our policy
frameworks supporting talent development incentivises and rewards the
behaviours that we want to be hallmark of abrdn as an employer, a business
partner and as a counterparty. We also took responsibility, on behalf of the
Board, to ensure that our stewardship responsibilities and accountabilities
were fully factored into our decision making and were transparently disclosed.
Most significantly during 2024, we completed an orderly succession in the
leadership of the firm. Stephen Bird handed over the reins to Jason Windsor in
May last year, with Jason being appointed as CEO in September of that year,
following a thorough, externally supported, process. I am pleased to report
that Jason has made a strong start as CEO, impressing both clients and
colleagues with his commitment to prioritising service delivery focused on
enabling our clients to meet their investment objectives. Once again, I would
like to place on record our thanks to Stephen for his leadership as CEO
through what was a very turbulent period.
In addition, the Committee focused on wider Board succession, with Catherine
Bradley stepping down in April to concentrate her service to the Group as
Chair of interactive investor. Katie Bickerstaffe and Vivek Ahuja were
appointed to the Board in October; details of their background and experience
can be found on pages 88 and 89 and the Board approved further terms of
appointment for Cathi Raffaeli, Hannah Grove and myself as we reached the end
of our current terms.
As Jason began the work of shaping his executive team, the Committee supported
succession planning for the executive, particularly in relation to the
establishment of the Group Operating Committee, the expanded Executive
Leadership Team, the transition from Rene Buehlmann to Xavier Meyer as
Investment business CEO, and the expanded role of Richard Wilson as Group
Chief Operating Officer in addition to his position as CEO of interactive
investor.
We continued to oversee initiatives supporting enhancement of performance
management, talent, leadership, diversity, equity and inclusion frameworks.
Monitoring progress on embedding the Company's values within our expectations
of employee and employer behaviours to reinforce our cultural commitments, is
an important standing agenda item. This followed the expansion of the remit of
the Committee in 2022 to include oversight of culture, recognising the
contribution this would make as an important enabler within the Company's
transformation programmes.
Governance Framework
We continued to review our governance framework against the Code principles
and provisions and welcomed the revisions made to the Code in early 2024.
There were no material changes proposed to our governance framework during
2024.
Board evaluation
Our 2024 Board review was conducted internally and I am pleased to report that
it concluded the Board was operating effectively while helpfully highlighting
areas where further progress could be made. More information about what the
process involved, and its outcomes, can be found on page 101.
Culture, Diversity, Equity and Inclusion
The Board has consistently supported the recruitment, development and
advancement of the best person for the job, ensuring there is no systematic
bias in our processes. The Committee received regular updates during the year
on the work being done to implement the Group's culture, diversity, equity and
inclusion (DEI) programmes and improve our talent development and performance
measurement frameworks. In 2024, we introduced a Colleague Council to bring
together a group of 30 colleagues representing all aspects of the global abrdn
population to help shape the best outcomes across all matters that connect us
as an organisation.
The Committee monitored the development of a new Career Framework, alongside
our DEI discovery and reset initiatives, which have continued to embed our
cultural commitments. The Board supported ongoing engagements with colleagues
through various informal initiatives such as coffee sessions, as well as
through the established BEE program. These efforts have been instrumental in
fostering a more inclusive, diverse, and engaged workplace environment.
During 2024, the Group successfully implemented an ambitious transformation
programme. The Committee received presentations to ensure that the impact of
staff reductions was not disproportionately borne by any particular group of
employees in terms of their diverse characteristics.
There is more detail about this below and on page 125 onwards of the strategic
report.
Talent and Leadership
The Committee received regular reports from teams involved with Talent and
Organisation Effectiveness, reviewing and inputting guidance on their plans to
deliver effective leadership, talent and performance management across the
Group. During the year we have spent particular time on the Career Framework.
Delivering for our clients by supporting our talented colleagues to perform,
grow, and progress is key; with the Career Framework supporting that by
providing clarity for colleagues and allowing them to understand how their
development, their career, and their performance will be supported and
measured. Alongside our early-, mid-, and senior- talent development
programmes and succession planning, this has allowed us to better recognise
and develop our key talent.
Board composition
The Committee, on behalf of the Board, assesses the balance of executive and
non-executive Directors, and the composition of the Board in terms of the
skills, experience, cognitive diversity and sufficiency of time availability
needed for the Company to be successful. These factors are important to the
Board when reviewing overall composition and during the year were reviewed by
the Committee, are covered in my 1:1 discussions with Directors, all of which
feed into the Board effectiveness review.
In addition to the Board changes noted above, Pam Kaur has advised that as a
consequence of her appointment as Chief Financial Officer and an Executive
Director of HSBC Holdings plc with effect from 1 January 2025, she will not
seek re-election at the Company's Annual General Meeting on 8 May 2025 and
will stand down from the Board from that date. We shall miss her wise guidance
and wish her well in her new role.
There were no other Board or Committee composition changes during the year.
Sir Douglas Flint
Chair and Chair of the Nomination and Governance Committee
Membership
The members of the Committee are the Chair, the Chairs of Board Committees and
the NED responsible for Employee Engagement. For their names, the number of
meetings and committee member attendance during 2024, please see the table on
page 104.
Jason Windsor, in his CEO role, is invited to Committee meetings to discuss
relevant topics, such as the roles within and membership of the GOC, ELT,
talent development and management succession.
Key responsibilities
The Committee's primary role is to support the composition and effectiveness
of the Board, and to oversee the Group's activities to strengthen its talent
pipeline. It also oversees ongoing development and implementation of the
Group's governance framework and its work to embed appropriate diversity and
inclusion policies.
The Committee's key responsibilities are:
- Identifying and recommending Directors to be appointed to the
Board and the Board Committees and ensuring relevant training is provided on
appointment and throughout their tenure.
- Reviewing and assisting in the development and implementation of
initiatives to embed the Board's desired outcomes for diversity, equity and
inclusion within the Group and to define, monitor and performance manage the
behaviours expected of all employees that will be seen to represent the
Group's culture.
- Reviewing Board diversity, skills and experience.
- Supporting the process and output of the Board's effectiveness
review.
- Overseeing succession planning, and leadership and talent
management development throughout the Group.
- Considering how the Group should comply with current and upcoming
corporate governance requirements, guidance and best practice and relevant
directors' duties.
The Committee reports regularly to the Board so that all Directors can be
involved in discussing these topics as appropriate.
The Committee's work in 2024
An indicative breakdown as to how the Committee spent its time is shown below:
What was discussed
Jan-Mar - Reviewed compliance with the UK Corporate Governance Code for the 2023
ARA.
- Reviewed the results of the Committee Effectiveness Review.
- Reviewed progress on Talent and Leadership development activities.
- Reviewed the Diversity, Equity and Inclusion Strategy and Board Diversity
Statement.
- Reviewed the recommendations to shareholders to re/elect Directors at the
AGM.
- Received an update on the 2023 year-end annual performance process.
- Reviewed Board skills and succession planning.
Apr-Sep - Recommended the appointment of Jason Windsor as CEO and Katie Bickerstaffe
and Vivek Ahuja as independent non-executive Directors.
- Received an update on the progress of the Diversity, Equity and Inclusion
Strategy and action plan.
- Reviewed executive succession planning.
- Received updates on the Group's People and Talent strategies.
- Reviewed the Group's annual Stewardship Code Report.
Oct-Dec - Received an update on Diversity, Equity and Inclusion progress and input
into the 2025 Plan.
- Received an update on colleague engagement survey results.
- Received the regular update on the activities of the abrdn Financial
Fairness Trust.
- Recommended to the Board changes to the Committee's Terms of Reference.
- Reviewed senior talent moves.
An indicative breakdown as to how the Committee spent its time is shown below:
Diagram removed for the purposes of this announcement. However it can be
viewed in full in the pdf document
Board and committee appointments and composition
The Committee keeps under constant review the skills, experience and
capabilities needed for particular Board roles. This recognises the need to
secure a pipeline of potential successors to be able to chair the Board
Committees, and also the need to plan ahead to take account of the length of
time served on the Board by the current independent non-executive Directors.
In addition, it also recognises the skills which the Board will need as it
moves forward to oversee the implementation of the Group's approved strategy
and takes account of the Group's commitments to achieve and maintain its
published Board diversity targets.
Where Board augmentation is needed, an external search consultant is then
requested to prepare a list of suitable candidates. From that, the Committee
agrees a shortlist. Following interviews with potential candidates, the
Committee makes recommendations to the Board on any proposed appointment,
subject always to the satisfactory completion of all background checks and
regulatory notifications or approvals. Part of this includes considering
existing or planned external commitments of candidates to assess their ability
to meet the necessary time commitment and whether there are any conflicts of
interest to address.
The Committee also oversees the process that recommends continuation of
appointments; members of the Committee do not, however, take part in
discussions when their own performance - or continued appointment - is being
considered.
Following Catherine Bradley's decision not to seek re-election at the
Company's AGM in April, the Committee requested that John Devine take on the
role of Audit Committee Chair on an interim basis. During the year the
Committee then considered the appointments of Vivek Ahuja, as Audit Chair
Designate (subject to regulatory approval), and of Katie Bickerstaffe as a
member of the Remuneration Committee, and recommended these appointments to
the Board. Katie and Vivek were appointed on 1 October, and Vivek took on the
role of Audit Committee Chair on 1 January 2025.
Succession planning and talent management activities
The Committee regularly reviews succession planning activities, including
identifying key person and retention risk, and talent development programmes
across the Group.
During 2024, in particular, the Committee discussed the future leadership and
talent needs of the Group and how the current programmes could be revised to
take account of the skills and expertise required by the Board, the GOC and
the ELT. These programmes are designed to recognise the changing shape of the
Group, and also to identify both the talent available within the Group and the
need/benefits of external recruitment. Diversity was considered as a core part
of these discussions, and progress was reviewed against our diversity goal to
achieve minimum 40% women on ELT succession plans.
The Talent and Change agenda is led by the CPO, in conjunction with the CEO.
The Committee spent time during 2024 building on the foundations built in 2023
and looking at the strategic priorities of the talent team to:
- Bring the best possible people into the organisation and continue
to develop our colleagues.
- Enable people to be the best they can and encouraging movement of
talent across our organisation.
- Create the best possible environment for our people to thrive.
The Committee discussed the team's progress to deliver initiatives to support
early careers, talent acquisition, future talent, core capabilities and
behaviours and effective performance management. The Committee discussed the
inclusive design of the initiatives such as early careers, talent acquisition
and future talent and considered the diversity of talent this achieved.
The Committee reviewed the effectiveness of its NED mentoring programme which
allows each NED to get to know members of the next generation of talent
through individual meetings which take place over the course of the year and
evolve based on the needs of each individual being mentored. Having received
positive feedback from both mentors and mentees, the mentoring relationships
were refreshed in 2024 to continue the Board's exposure to our top talent and
the programme will continue in 2025.
During the year, the Committee reviewed the succession and contingency
planning for our top performing fund managers and the enterprise-wide roles
identified which are considered as critical to delivering business results and
revenue growth. The identification of successors for these roles creates
opportunities for talent development as well as ensuring better business
continuity.
The Committee regards all of these initiatives as helpful in supporting its
oversight of the development of the Company's key talent. Continuing to focus
on those commercial roles and those that manage key client and revenue
generating relationships will remain an important focus of the Committee.
Board evaluation
The Committee has a key role in supporting the Board evaluation process.
Details of the 2024 review are on page 101.
Culture, Diversity, Equity and inclusion
The Committee and the Board spent time with both the CEO and the Chief People
Officer understanding the evolving hardwiring of our cultural commitments
(Client first, Empowered, Ambitious, Transparent). During 2024 this moved
beyond a phased programme of work and into 'Evolve and sustain' where
continued measurement, evolution, and delivery of our cultural commitments is
sustained through BAU activity.
Over the course of 2024, the Committee oversaw and received updates on key
colleague engagement activity, and shifting sentiment against a shifting
internal and external landscape. Measuring progress against cultural ambitions
through colleague sentiment via our employee engagement online platform
(pulse), trends on key themes such as pride and advocacy, and insight into
plans to drive further colleague engagement.
The Board's diversity statement is on page 99. The Committee has a key role in
supporting publication of this statement through its oversight of DEI
activities, these are presented to the Committee at least twice a year to
report on progress to deliver against Committee-approved framework, action
plans and initiatives. The Committee reviewed progress against the Group's DEI
ambition and plan, being:
- We're committed to building a business that attracts brilliant
talent and where all our people can thrive; where they belong, and can learn,
develop and do their best work. Priorities:
- Gender: Supporting and growing our Balance network; Mentoring and
sponsorship; Continued actions to close the UK gender pay gap; Establishing
communities of support.
- Ethnicity: Supporting and growing our Unity Network; Publishing
the UK Ethnicity pay gap; Working with our new partner for ethnicity.
- Business/regional: Locally defined and owned based on data,
demographics, and cultural or regional nuances.
The Committee further reviewed relevant trends, data points, and regulation
including:
- Internal colleague sentiment in relation to themes such as voicing
contrary opinion, and the perceptions of diversity & inclusion by
colleagues.
- External landscape such as client and RFP volume and interest, and
external partnerships, industry bodies, and abrdn pledges.
Committee effectiveness
The effectiveness review was conducted internally in 2024, with the most
recent externally-facilitated review undertaken in 2022.
Details of the 2024 review are on page 101 and reflect the themes raised
across the Board and its Committees.
4. Directors' remuneration report
Remuneration Committee Chair's statement
This report sets out what the Directors of abrdn were paid in 2024 together
with an explanation of how the Remuneration Committee reached its
recommendations.
Where tables and charts in this report have been audited by KPMG LLP, we have
marked them as 'audited' for clarity.
The report is structured in the following sections and corresponding page
numbers:
Page
At a glance - 2024 remuneration outcomes 126
At a glance - 2025 Policy implementation 127
Directors' remuneration in 2024 128
Shareholdings and outstanding share awards 131
Executive Directors' remuneration in context 135
Remuneration for non-executive Directors and the Chair 138
The Remuneration Committee 140
Approval
The Directors' remuneration report was approved by the Board and signed on its
behalf by:
Jonathan Asquith
Chair of the Remuneration Committee
3 March 2025
Dear shareholder
On behalf of the Board I am pleased to present the Directors' remuneration
report for the year ended 31 December 2024.
Introduction
At the 2024 AGM our directors' remuneration report for 2023 received an 86%
vote in favour. I would like to thank all shareholders for your continued
support and constructive dialogue on remuneration matters. I would also like
to welcome Katie Bickerstaffe who joined the Remuneration Committee in
October.
The Directors' Remuneration Policy (the Policy) is now in its final year of
operation prior to being submitted to shareholders at the 2026 AGM. Therefore,
during 2025, the Remuneration Committee will review the Policy to ensure that
it remains fit for purpose for our strategy and that it reflects the evolving
executive remuneration landscape. Shareholder input will, as always, be sought
as part of the process.
2024 was a year of transition for abrdn in which good progress resulted in
improved financial outcomes. As set out in the strategic report, all three of
our businesses reported increased profits in 2024, AUMA increased from last
year and progress on the transformation programme has exceeded our initial
expectations. Overall, noteworthy traction in financial and non-financial
outcomes was noted in H2 2024.
ii reported another year of strong growth in customer numbers, AUMA and net
flows and our Adviser business reported increased profits. Our Investments
business delivered significantly reduced net outflows and improved investment
performance. As a result, financial performance measures for the annual bonus
came out towards the upper end of the range. Strategic actions taken by
management in year also resulted in outcomes at the upper end of the range
against non-financial performance for annual bonus.
New Chief Executive Officer's remuneration
The remuneration arrangements for Jason Windsor's appointment as Chief
Executive Officer and Stephen Bird's exit were agreed by the Remuneration
Committee in conformity with the Policy agreed at the 2023 AGM. Jason's
remuneration package as Chief Executive Officer comprises:
- A base salary of £800,000 per annum.
- A pension allowance of 18% of salary aligned to the maximum
contribution available to abrdn's UK-based employees and other benefits in
line with our Policy.
- An Annual Bonus up to a maximum of 250% of salary subject to
performance (with 50% of any bonus earned being deferred for three years into
abrdn shares, which will vest in three equal annual tranches).
- An annual Long Term Incentive award of 350% of salary (final
vesting percentage is based on stretching financial and shareholder return
targets over the three-year performance period and the award is subject to a
further two-year holding period after vesting).
The structure and quantum of the Chief Executive Officer's remuneration
package is consistent with our Policy and falls below the maximum levels
permitted under the Policy. Jason's package was calibrated in the context of
an assessment of what it would take to attract the required skills and
expertise from the market (utilising benchmarking data for similar roles
across FTSE Financial Services peer group companies), the expectations of
other candidates considered for the role and the previous Chief Executive
Officer's remuneration package.
The Remuneration Committee is confident that the remuneration package has been
set at a level that takes into account the skills and experience that Jason
brings to his new role.
Implementation in 2024
Jason's annual bonus opportunity was based on a pro-rata combination of his
CEO and CFO maximum opportunities and salaries, based on the portion of 2024
served in each role. Further details are set out on page 126.
Similarly, his 2024 LTIP award was based on a pro-rata combination of his CEO
and CFO maximum opportunities and salaries. As set out in the announcement on
27 September 2024, this was delivered through a supplementary LTIP award, as
the original 2024 LTIP award was granted prior to Jason becoming CEO. Further
details are set out on page 133.
New Chief Financial Officer's remuneration
As announced on 28 February 2025, Siobhan Boylan has been appointed as Chief
Financial Officer, subject to regulatory approval. She is expected to join the
Company during the summer and her remuneration arrangements are fully in line
with our Policy. Siobhan's ongoing annual remuneration package consists of a
salary of £495,000, pension allowance of 18% of salary and other benefits in
line with our Policy, maximum bonus opportunity of 150% of salary and a
typical LTIP grant of 200% of salary. Siobhan is also eligible to be granted
buyout awards for any awards that she will forfeit in resigning from her
current role. Full details on any buyout awards that are granted and how her
remuneration was implemented in 2025 will be disclosed in the Annual report
and accounts 2025.
How our Policy was applied in 2024
Strategic progress was made in 2024 in reducing our cost base, sustaining
strong organic customer growth in ii, improving customer satisfaction whilst
maintaining profits in Adviser and improving our investment performance and
Investments net flows position. While we remained focused on increasing group
profitability and there is continued work to be done to return Adviser and
Investments to growth, 2024 was a year of improvement.
The annual bonus, as set out in our current Policy, is intended to reward the
successful delivery of the Company's business plan for the year. The LTIP is
intended to align with our shareholders and promote sustainability of our
performance by rewarding the delivery of long-term growth in shareholder
value. With the strong in-year momentum balanced by low shareholder returns,
as measured by the metrics in the 2022 LTIP, the Remuneration Committee is
comfortable that the Policy operated as intended with the annual bonus and
LTIP outcomes.
Annual bonus (detail on pages 128 to 130)
Financial performance (65%)
Financial targets were set with reference to the Board-approved plan including
measures on investment performance, net flows and adjusted operating profit.
Adjusted operating profit increased overall. Despite market challenges,
investment performance improved in 2024. While net flows for Adviser
disappointed in 2024, net flows have materially improved in Investments and
have significantly increased for ii.
Investment performance: investment performance on a 1-year basis exceeded 70%
and on a 3-year basis improved year on year. Strong investment performance has
continued within alternatives, fixed income, liquidity and quantitative
strategies. Equities performance remained challenged, including the impact of
our AUM bias towards Asia and emerging markets. The overall outcome was
between threshold and stretch targets.
Net flows: in ii, net flows have remained strong, significantly increasing to
£5.7bn in 2024 from £2.9bn in 2023. Despite positive traction on gross
inflows, higher redemptions in 2024 were reflected in net outflows of £3.9bn
for Adviser. While still in net outflows, our Investments business has seen an
encouraging improvement in net flows year on year. Excluding liquidity, net
flows from Institutional, Retail and Wealth clients were £9.5bn better year
on year, benefiting from both higher gross inflows and lower redemptions.
Performance on net flows exceeded the stretch target for ii, fell below the
threshold target for Adviser and fell between threshold and stretch targets
for Investments.
Adjusted operating profit: this came in 2% higher than the prior year, at
£255m. Adjusted operating profit increased in all three of our Wealth and
Investments businesses. The overall outcome was between threshold and stretch
targets.
The outcomes for the financial element of the 2024 annual bonus are summarised
below.
Financial performance measure Weighting 2024 outcome
(% of total scorecard)
Investment performance 15% 10.50%
Net flows 15% 7.33%
Adjusted operating profit 35% 32.07%
This resulted in an overall outcome of 49.90% out of a maximum of 65% on
financial measures.
Non-financial performance (35%)
In 2024, we assessed non-financial performance against three groups of
measures: Strategic (one measure related to a critical group-wide strategic
initiative), ESG (comprising Environment and Social categories) and Customer.
See page 129 for further details.
Strategic: the transformation programme, established to deliver increased
efficiency across the Group, was the key strategic focus in 2024. In 2024, the
initial cost targets that were set out have been surpassed, with £70m of
in-year cost savings delivered and over £100m of savings on an annualised
basis have been achieved, all within risk appetite. This increased progress
towards right-sizing our cost base, reinforces our focus in 2025 on further
streamlining the company and positioning it for future growth. On this basis,
we determined the final outcome of 10% out of 10%.
Environment: as investors, we concluded our two-year engagement programme with
our top 20 largest financed emitters, with voting action to follow where
required. Tracking at a 45% carbon intensity reduction in in-scope public
market portfolios compared to our 2019 baseline (34% reduction in in-scope
real estate portfolio), we are also making good progress towards our target of
a 50% reduction by 2030. For our own operational net zero, we improved
year-on-year in our progress to meet our long-term net zero carbon emission
target. Noting these, the Remuneration Committee also took into account slower
progress in certain other areas considered as part of the scorecard, Overall,
the outcome was determined at 3.5% out of 5%.
Social/people: with organisational transformation ongoing, engagement levels
continued on their positive trajectory from 50% in 2022, to 54% in 2023 and to
57% in 2024. Colleagues have demonstrated their desire to contribute to
shaping the future of the company with participation in the engagement survey
at its highest ever. Under new leadership in the second half of 2024, swift
changes brought with them momentum in employee sentiment. Increased employee
scores in motivation and confidence were observed, with colleagues reporting
strong client focus, challenging and interesting work, collaborative team
relationships and growing belief in leadership. Progress on global senior
leadership gender representation and UK ethnicity diversity targets remained
strong. Taking into account a wide range of performance indicators, the
Remuneration Committee determined the final outcome of 8% out of 10%.
Customer: in ii, the Remuneration Committee noted the sustained strong organic
growth in customer numbers and continued customer satisfaction across website
customers. In our Adviser business, customer satisfaction scores and service
net promoter scores both significantly increased through 2024. This was
balanced by net outflows and a reduction in total customer numbers year on
year. In our Investments business, strong relationships persisted with key
clients despite a challenging environment. There was also a reduction in
redemptions observed year on year, along with an improved new business win
rate, resulting in improved net flows. Taking into account the range of
quantitative and qualitative performance indicators across the three
businesses, the Remuneration Committee determined the final outcome of 6.08%
out of 10%.
Considering all components together, this resulted in an overall assessment of
27.58% out of a maximum of 35% on non-financial measures.
Remuneration Committee assessment
To assess whether the outcomes generated by the scorecard were fair in the
broader performance and risk context, the Remuneration Committee reviewed the
individual components which contributed to the delivery of this performance
and the alignment of scorecard outcomes with the experience of a range of
stakeholders.
The Committee carefully considered, amongst other factors:
- The wider workforce experience, while taking into account that by
design, there are differences in how the wider workforce and executive
Directors are remunerated:
- Continued investment in individual salary reviews within the wider
workforce, with no salary increases awarded to the executive Directors.
- Increased bonus pool funding.
- Continued material funding for restricted stock awards.
- Our shareholder experience:
- While share price and total shareholder returns (TSR) performance
is not where we would like it to be, TSR - in its various forms - comprises
100% of the LTIP for executive Directors and constitutes the majority of their
maximum total variable pay outcome. Shareholder experience is, therefore,
reflected in long-term remuneration outcomes for executive Directors.
- Additionally, the executive Directors' own mandated shareholding
provides for further alignment to the shareholder experience.
- Feedback received from the Audit Committee and the Risk and
Capital Committee on material accounting, reporting and disclosure matters and
the management of risk within the business.
The Remuneration Committee concluded that the outcomes delivered by the
scorecard were a fair and balanced assessment of performance and no adjustment
to them was needed or made.
Summarising these results, the Remuneration Committee approved the following
outcomes based on performance against targets:
Executive Director Final outcome 2024 total bonus (000's)
(% of max)
Jason Windsor(1) 77.48% 1,249
Stephen Bird(2) 77.48% 843
1. The 2024 total bonus for Jason Windsor reflects his time served
as CFO and CEO during the year.
2. The 2024 total bonus for Stephen Bird was prorated to reflect
his commencement of garden leave effective 1 July 2024.
Long-term incentives (detail on page 130)
Vesting of the 2022 Long-Term Incentive Plan (LTIP) award granted to Stephen
Bird is based on performance over the three-year period ending on 31 December
2024. A proportion of Jason Windsor's 2022 Long-Term Incentive Buyout is also
subject to the performance conditions of the 2022 LTIP (see pages 126 and 127
of the Annual report and accounts 2023 for more detail). After review, the
Remuneration Committee concluded that performance had not met the stretching
targets set under both measures. Therefore, the award will not vest.
Policy implementation in 2025
Following a review, no change has been made to salaries for the executive
Directors or fees for the non-executives and the Chair for 2025.
In line with previous practice, we will continue to set stretching targets for
the annual bonus and the LTIP to ensure that the maximum opportunity will only
be earned for exceptional performance.
The scorecard for the 2025 annual bonus is detailed on page 127 and the
targets, which are commercially sensitive, will be disclosed at the end of
this performance year in the Annual report and accounts 2025. The scorecard
continues to focus the majority of the opportunity on the achievement of
financial targets as set out in our Policy (65%), with the balance measured
against non-financial performance including Strategic, Environment,
Social/People and Customer objectives. The Remuneration Committee has agreed a
Strategic measure and a range of key indicators in the other areas which will
allow a rounded assessment of performance to be made. Details on these
metrics, including how the Remuneration Committee assessed performance against
them, will be disclosed retrospectively.
The Remuneration Committee has reviewed the operation of the Relative TSR
measure for LTIP awards over the past few years and observed the wide
dispersion in the performance of individual companies in the competitor set,
driven by the idiosyncratic effects of differences in scale, product mix,
channel and geographical focus. This dispersion, combined with the changes in
the Group's own profile over the period, has led the Remuneration Committee to
conclude that we cannot select a bespoke peer group for Relative TSR
benchmarking purposes that is not overly subjective and prone to distortion.
The Group is committed, under its Policy, to have at least one relative
performance measure for the determination of rewards under the LTIP. Given the
investment alternatives available to our shareholders and the need for a more
stable basis to judge the Group's relative performance over time, the
Remuneration Committee has decided that the benchmark for the Relative TSR
component (50%) of the 2025 LTIP will be the total return of the FTSE 350
index. Performance ranges will be set as before, with threshold (25%) being
set at median performance and maximum (100%) at the 75th centile. Details of
the 2025 LTIP grant can be found on page 127.
To help you navigate the report effectively, I would like to draw your
attention to the sections on pages 126 and 127 which summarise both the
outcomes for 2024 and how the Policy will be implemented in 2025.
On behalf of the Board, I invite you to read our remuneration report. As
always, the Remuneration Committee and I are open to hearing your views on
this year's report and our Policy in general.
At a glance - 2024 remuneration outcomes
Outcome of performance measures ending in the financial year
The following charts show performance against the target range for the annual
bonus and commentary on the 2022 LTIP. Further detail on the assessment of the
performance conditions can be found on pages 128 to 130.
Performance vs Maximum (%) - Financial measures
Diagram removed for the purposes of this announcement. However it can be
viewed in full in the pdf document
Performance vs Maximum (%) - Non-financial measures
Diagram removed for the purposes of this announcement. However it can be
viewed in full in the pdf document
2024 annual bonus scorecard outcome
The following table sets out the final outcome for the 2024 annual bonus. A
detailed breakdown of the assessment of performance conditions can be found on
pages 128 to 130.
Bonus Scorecard Outcome Total Bonus Outcome
Financial metrics Non-financial metrics (maximum 35%) Board approved outcome Total award
(minimum 65%) (% of maximum) ('000s)
Jason Windsor(1) 49.90% 27.58% 77.48% 1,249
Stephen Bird(2) 843
1. Jason Windsor was appointed to the Board effective 23 October
2023 as Chief Financial Officer. He then served as Interim CEO from 24 May
2024 to 10 September 2024 and was appointed as CEO on 10 September 2024. For
the period 1 January to 23 May 2024, the outcome was linked to 150% maximum of
his Chief Financial Officer salary of £675,000. For the period 24 May 2024 to
31 December 2024, the outcome was linked to 250% maximum of his Chief
Executive Officer salary of £800,000.
2. Stephen Bird commenced garden leave effective 1 July 2024. The
total 2024 annual bonus awarded value was prorated to reflect the proportion
of the 2024 performance year for which he served at abrdn prior to
commencement of garden leave.
2022 LTIP outcome
The performance period for the 2022 LTIP concluded on 31 December 2024.
Performance against the Adjusted Diluted Capital Generation per share (CAGR)
and Relative TSR performance measures were assessed to be below the threshold
required. Therefore, the award will not vest. Detail of the performance
assessment for the 2022 LTIP can be found on page 130.
Total remuneration outcomes in 2024
The chart below shows the remuneration outcomes for the CEO in 2024 based on
performance compared to the maximum opportunity.
Diagram removed for the purposes of this announcement. However it can be
viewed in full in the pdf document
At a glance - 2025 Policy implementation
This section sets out how we propose to implement our Policy in 2025. The full
Policy, which remains unchanged for 2025 from the Policy approved by
shareholders at the 2023 AGM, including detail on how it addresses the
principles as set out in the 2018 Corporate Governance Code, can be found in
the Annual report and accounts 2022 on pages 120 to 130.
Element of remuneration Key features of operation 2025 implementation
Salary
Core reward for undertaking the role Normally reviewed annually, taking into account a range of internal and Jason Windsor: £800,000
external factors.
Pension
Competitive retirement benefit Aligned to the current maximum employer contribution available to the UK wider Jason Windsor 18% of salary
workforce (18% of salary).
Benefits
Competitive benefits Includes (i) private healthcare; (ii) death in service protection (iii) income No change to benefits provision
protection (iv) reimbursement of membership fees of professional bodies; and
(v) eligibility for the all-employee share plan.
Annual bonus
To reward the successful delivery of the Company's business plan Annual performance assessed against a range of key financial and non-financial Jason Windsor: 250% of salary
measures. At least 65% will be based on financial measures. At least 50% will
be deferred into shares vesting in equal tranches over a three-year period. See below for 2025 performance conditions
Awards are subject to malus and clawback terms.
Long-term incentive plan
To align with our shareholders and reward the delivery of long-term growth Awards are subject to a three-year performance period, with a subsequent Jason Windsor: 350% of salary
two-year holding period. Dividend equivalents accrue over the performance and
holding period. 2025 performance metrics are set out below
Awards are subject to two equally-weighted performance metrics linked to
long-term strategic priorities and the creation of long-term shareholder
value.
Awards are subject to malus and clawback terms.
Shareholding requirements Executive Directors are required to build up a substantial interest in Company Jason Windsor: 350% of salary
shares. The share ownership policy for executive Directors requires shares up
to the value of the shareholding requirement to be held for a period of two
years following departure from the Board.
Performance conditions for 2025 annual bonus
Financial (65% weighting) Investment performance (10%), adjusted operating profit (40%) and net flows
(15%)
Non-financial (35% weighting) Performance against Customer (10%) and ESG objectives (comprising Environment
and Social measures) (15%) and progress on a key strategic initiative (10%)
Due to commercial sensitivity, actual targets and ranges will be disclosed at
the end of the performance period. The Remuneration Committee retains an
appropriate level of flexibility to apply discretion to ensure that
remuneration outcomes reflect a holistic view of overall performance,
including conduct and culture.
Performance conditions for 2025 Long-term incentive plan
Target range(1)
Net Capital Generation per share (50% weighting) 5% - 15% CAGR
Relative TSR (50% weighting)(2) Equal to median - equal to upper quartile
1. Straight line vesting occurs between threshold and maximum. 25%
vesting for threshold performance.
2. Relative TSR measure against the FTSE 350 Index.
Directors' remuneration in 2024
This section reports remuneration awarded and paid at the end of 2024 in
further detail, including payments to past Directors.
Single total figure of remuneration - executive Directors (audited)
The following table sets out the single total figure of remuneration for each
of the individuals who served as an executive Director at any time during the
financial year ending 31 December 2024:
Executive Salary for year Taxable benefits in year(1) Pension allowance paid in year Bonus paid in cash Bonus deferred(2) £000s LTIP with period ending in the year(3) Buyout Awards(4) Total for the year Total fixed Total variable
Directors £000s £000s £000s £000s £000s £000s £000s £000s £000s
Jason Windsor(5) 2024 773 1 128 624.5 624.5 - 1,041 3,192 902 2,290
2023 130 - 23 35 35 3 712 938 153 785
Stephen Bird(6) 2024 347 - 63 421.5 421.5 - - 1,253 410 843
2023 875 1 158 393 393 275 - 2,095 1,034 1,061
1. This includes the taxable value of all benefits paid in respect
of the relevant year. Included for 2024 are medical premiums at a cost to the
Group of £636 per annum for executive Directors.
2. This represents 50% of the total bonus award and is delivered
in shares which will vest in equal tranches over a three-year period.
3. The LTIP with period ending in the year values reported for
2023 are restated to reflect the share price at date of vesting for the
proportion of Jason Windsor's 2021 Long-Term Incentive Buyout award subject to
abrdn performance conditions and for Stephen Bird's 2021 LTIP award.
4. The value reported for 2024 for Jason Windsor includes two
elements. The first is the value (£228k) of the proportion of his 2021
Long-Term Incentive Buyout award subject to Aviva performance conditions
(157,431 shares vesting), based on the share price at the vesting date (144.55
pence). The outcome of the proportion of his 2021 Long-Term Incentive Buyout
award subject to Aviva performance conditions was not known, nor able to be
estimated, at the time of publication of the Annual report and accounts 2023.
The second element, as disclosed on page 127 of the Annual report and accounts
2023, is a buyout award in relation to the bonus foregone for the period 1
January to 13 October 2023 as a result of leaving his previous employer. The
value of this element (£813k) was determined by the Committee taking into
account the reported outcome and results of Jason's previous employer. 50% of
this element is deferred into abrdn shares vesting after 3 years, as detailed
on page 133.
5. Jason Windsor was appointed to the Board effective 23 October
2023. He received an annual salary supplement (neither pensionable nor taken
into account for annual bonus or LTIP outcomes) whilst serving as Interim CEO
from 24 May 2024 to 10 September 2024 and was then appointed as CEO on 10
September 2024.
6. Stephen Bird stepped down from the Board effective 24 May 2024
and commenced garden leave effective 1 July 2024. All figures, excluding the
2024 annual bonus outcome, reflect amounts paid/awarded until stepping down
from the Board. The 2024 annual bonus outcome reflects the proportion of the
2024 performance year for which he served at abrdn prior to commencement of
garden leave. See page 130 for further information on payments made to Stephen
Bird as a past director.
Base Salary (audited)
Jason Windsor received an annual salary supplement only for the period he
served as Interim CEO from 24 May 2024 to 10 September 2024, which totalled
£59,110 for the period. His annual salary was increased from £675,000 to
£800,000 on appointment as CEO on 10 September 2024.
Pension (audited)
Under the Policy approved at the 2023 AGM, the executive Directors received a
cash allowance in lieu of pension contribution of 18% of base salary.
Annual Bonus Plan
The following section contains details on the targets and the Remuneration
Committee's assessment of outcomes for the period 1 January 2024 to
31 December 2024 against each of the elements of the executive Director bonus
scorecard.
Financial performance metrics - 65% of total scorecard outcome
Weighting Threshold Stretch Actual Result
(% of overall (25% of (100% of (% of overall
scorecard) maximum) maximum) outcome)(1)
Investment performance(2) - % AUM above 15% 50% 70% 62% 10.50%
benchmark average of 1-year and 3-year for all asset classes
ii net flows (£bn) 5% 2.9 5.1 5.7 5.00%
Adviser net flows (£bn) 5% (1.0) 2.0 (3.9) 0.00%
Investments net flows(3) (£bn) 5% (7.0) 1.0 (4.7) 2.33%
Adjusted operating profit (£m) 35% 204 261 255 32.07%
1. Straight-line vesting between threshold and stretch targets.
2. Investment performance assessed using performance reporting
approach in place at the point in time that these targets were set by the
Remuneration Committee.
3. Excluding cash/liquidity and Insurance Partners.
Non-financial performance metrics - 35% of total scorecard outcome
Category Highlights from assessment Result
(% of overall outcome)
Strategic (10%): As announced in January 2024, the key strategic initiative that spans across 10%
the Group is our transformation programme. The intention of this initiative
Surpassed initial targets for key strategic initiative across our Group was to deliver increased efficiency and profitability across the Group.
Over 2024, the initial cost targets that were set out have been exceeded, with
£70m of in-year cost savings and over £100m of savings on an annualised
basis delivered within risk appetite. This has led to a 7% reduction in our
adjusted operating expenses and has helped to build a leaner, more efficient
company, laying the foundations for growth.
Environment (5%): The environmental measures we selected focused on the important contribution 3.5%
our Company has to make as a global institutional investor and a responsible
Year-on-year improvement on progress towards portfolio decarbonisation and Company. The Remuneration Committee considered a number of quantitative and
Operational Net Zero targets qualitative measures. Our Sustainability and TCFD report, available on our
website, contains further detail on our performance in this area. Key factors
in the determination were:
- In 2022, for our public market investments, we launched a two-year
engagement programme with our top 20 largest financed emitters. This enabled
meaningful engagement over time and reflects our goal to work with investee
companies to support real-world decarbonisation.
- In 2024, we were tracking at a 45% carbon intensity reduction in in-scope
public market portfolios compared to our 2019 baseline (34% reduction in
in-scope real estate portfolio), remaining on track for our target of a 50%
reduction versus our 2019 baseline by 2030. This represents a year-on-year
increase in progress against our long-term target, as we were tracking at a
41% reduction in 2023 compared to our 2019 baseline (25% reduction in in-scope
real estate portfolio).
- For our own operational net zero, we remain on track to meet our long-term
net zero carbon emission target of operational net zero by 2040, with a 74%
reduction versus our 2018 baseline in 2024. This represents a year-on-year
increase in progress against our long-term target, as we were tracking at a
69% reduction versus our 2018 baseline in 2023.
Social/people (10%): Noteworthy improvement in trackers of culture at abrdn, abrdn is a people business and we believe that in order to succeed it needs to 8%
increase in engagement score and continued progress on senior leadership embed diversity, equity and inclusion within a strong and shared cultural
gender representation and ethnicity diversity targets framework, enabling us to continue to attract and maintain an engaged and
diverse talent base. The Remuneration Committee considered a number of
quantitative and qualitative measures, including data points relating to
gender and ethnicity representation amongst senior leadership and employee
engagement.
- Against a backdrop of organisational transformation, our employee
engagement continued to steadily improve, with engagement scores at 57% (2023:
54% and 2022: 50%). However, there is still room for further improvement with
a sustained positive trajectory.
- Swift changes under new leadership in H2 2024 increased momentum in
employee sentiment, evidenced through increased scores in motivation and
confidence.
- Our culture is healthy with colleagues reporting strong client focus,
challenging and interesting work, collaborative team relationships and growing
belief in leadership.
- Amongst senior leadership, females (global) and individuals identifying as
minority ethnic (UK) both increased year on year to 40% and 7% (2023: 34% and
4%) respectively.
Category Highlights from assessment Result
(% of overall outcome)
Customer (10%): Our three-business model gives us a diverse customer base, from institutional 6.08%
to adviser to retail. We measure our success in delivering for our customers
Measured across our ii, Adviser and Investments businesses with reference to business-specific quantitative and qualitative metrics that
holistically capture the experience of our different customer and client
groups. The Remuneration Committee considered a range of quantitative and
qualitative measures from internal and external sources. Key factors in the
determination were:
- In ii, there was sustained strong organic customer growth over 2024 and a
significant year-on-year increase in the number of customer SIPPs. Customer
satisfaction remains robust across website customers.
- In Adviser, a significant improvement in client satisfaction occurred
through 2024 after technology upgrade implementation headwinds. However, net
outflows and a reduction in total customer numbers reflected a challenging
year.
- In our Investments business, strong relationships persisted with key
clients despite a challenging environment. There was a reduction in
redemptions year on year and improved new business win rate, as evidenced
through improved net flows.
2022 LTIP outcome
The following table details the targets and assessment of outcomes for the
2022 LTIP. The performance period for this award concluded on 31 December
2024. The Remuneration Committee concluded that the award had not met the
required threshold performance. Therefore, the award will not vest.
Threshold (25%) Maximum (100%) Actual outcome % vesting
Adjusted Diluted Capital Generation per share (CAGR) (50%) 5% 15% (1) % 0%
Relative TSR (50%)(1) Median Upper quartile Below Median 0%
1. The peer group was made up of the following global peers:
Affiliated Managers, Alliance Bernstein, Amundi, Ashmore Group, DWS Group,
Franklin Resources, Hargreaves Lansdown, Invesco, Janus Henderson Group,
Jupiter Fund Management, M&G, Man Group, Ninety One, Quilter, Schroders,
SEI Investments, St James's Place.
Payments to past Directors and payments for loss of office (audited)
Payments made to former executive Directors that have not been previously
reported elsewhere are reported if they are in excess of £20,000.
Stephen Bird stepped down from the Board effective 24 May 2024 and commenced
garden leave effective 1 July 2024 to his termination date of 31 December
2024. Between 24 May 2024 and 31 December 2024, Stephen received salary,
pension allowance and taxable benefits totalling £623,834.
The Company has also made a payment in lieu of notice of basic salary, pension
allowance and taxable benefits, in monthly instalments (subject to mitigation)
over the remainder of Stephen Bird's contract (being a further four months and
twenty-three days to 23 May 2025). The final monthly instalment is due to be
paid in May 2025. The total of the five payments will be £410,975.
Stephen Bird was entitled to a capped contribution towards legal fees incurred
in connection with his exit arrangements. The contribution towards legal fees
did not exceed £20,000.
The table below summarises the total payments to Stephen Bird as a past
director for 2024:
Payment element Amount (£)
Salary, pension allowance and taxable benefits after stepping down from Board £623,834
Payment in lieu of notice of basic salary, pension allowance and taxable £410,975
benefits
For Stephen's outstanding incentive awards, in accordance with the relevant
plan rules, the following treatment applied:
- Unvested deferred bonus awards (including the deferred award that
will be awarded relating to the prorated 2024 bonus) will continue to vest on
normal vesting dates and will remain subject to malus and clawback.
- Unvested LTIP awards will continue to vest on normal vesting dates
and will remain subject to the satisfaction of the relevant performance
conditions (measured over the full performance period), holding periods and
malus and clawback. All LTIP awards will be prorated based on the proportion
of the performance period completed to Stephen's termination date.
- The Company's post-cessation shareholding requirements apply for a
two-year period from Stephen's date of departure from the Board on 24 May
2024.
Shareholdings and outstanding share awards
This section reports our executive Directors' interests in shares.
Directors' interests in shares (audited)
Our shareholding requirements for executive Directors are detailed on page
127. The Policy requires executive Directors to accumulate and maintain a
material long-term investment in abrdn plc shares. The Remuneration Committee
reviews progress against the requirements annually. Personal investment
strategies (such as hedging arrangements) are not permitted for the purposes
of reducing the economic exposure arising from the shareholding requirements.
The following table shows the total number of abrdn plc shares held by the
executive Directors and their connected persons:
Unvested shares
Total number of Shares acquired Total shares Options exercised Vested but Subject to Not subject to Shares lapsed(4)
shares owned at during the period 1 owned as at 31 during the period 1 unexercised performance performance
1 January 2024 January 2024 and December 2024 January 2024 and shares(1) conditions(2) conditions(3)
31 December 2024 31 December 2024
Jason Windsor - 357,635 357,635 - 234,370 2,769,957 766,144 23,432
Stephen Bird(5) 782,355 134,751 917,106 269,503 454,602 3,182,881 597,635 2,793,795
1. For Jason Windsor, this Includes buyout of 2021 Long-Term
Incentive Plan and 2021 Bonus Award Buyout (bought-out) awards. For Stephen
Bird, this includes 2021 Long-Term Incentive Plan award and deferred bonus
awards. The number of vested but unexercised shares includes shares to be
awarded in lieu of dividend equivalents.
2. For Jason Windsor, this includes 2022 and 2023 Long-Term
Incentive Buyout awards and 2024 LTIP awards. For Stephen Bird, this includes
2022, 2023 and 2024 LTIP awards (awards subject to performance targets over
three-year periods). The number of unvested shares presented under awards
subject to performance conditions exclude shares to be awarded in lieu of
dividend equivalents. The figures for the 2022 LTIP are as at 31 December 2024
and do not reflect the subsequent lapsing of this award.
3. For Jason Windsor, this includes 2021 and 2022 Bonus Award
Buyout awards and 2024 deferred bonus award. For Stephen Bird, this includes
2022, 2023 and 2024 deferred bonus awards. The number of unvested shares
presented under awards not subject to performance conditions include shares to
be awarded in lieu of dividend equivalents.
4. For Jason Windsor, the shares lapsed relate to the performance
outcome of his 2021 Long-Term Incentive Buyout award. For Stephen Bird, the
shares lapsed relate to the performance outcome of the 2021 LTIP award - see
page 123 of the Annual report and accounts 2023 - and the proration of his
2023 and 2024 LTIP awards for time employed during the performance periods.
5. On 8 April 2024, Stephen Bird exercised the second tranche of
the deferred portion of his 2021 annual bonus. On 9 April 2024, he exercised
the third tranche of the deferred portion of his 2020 annual bonus award. On
11 April 2024, he exercised the first tranche of the deferred portion of his
2022 annual bonus award.
The following table shows the number of qualifying awards included in
assessing achievement towards the shareholding requirement, as at 31 December
2024. The total Qualifying holding includes shares held outright (which derive
from vested and exercised awards plus any purchased shares) as well as
Qualifying unvested or unexercised awards. Purchased shares are valued at the
higher of the cost of the purchase as disclosed in RNS announcements or the
closing market price on 31 December 2024. Qualifying unvested or unexercised
awards include 50% of the value (as a proxy for the payment of tax due on the
exercise of the awards) of awards not subject to performance conditions and
which have not yet vested.
Qualifying unvested or unexercised
awards
Number of shares Number of shares Total Qualifying Value of Shareholding Basic Total of the value of shares owned and 50% of the value of qualifying awards Shareholding
at 31 December 2023 as a % of salary
under the under option under holding (shares holding(2) requirement salary requirement
deferred share long-term incentive owned from table (as % salary) met?
plan which are plans which are no above and 50% of
not subject to longer subject to Qualifying unvested
performance performance or unexercised
conditions conditions awards)(1)
Jason Windsor 823,207 177,307 857,892 1,210,915 350% 800,000 151% In progress
Stephen Bird 788,245 263,992 1,443,225 2,683,431 350% 875,000 307% In progress
1. Of the total number of shares shown, Jason Windsor purchased
357,635 shares at a total cost of £505k and Stephen Bird purchased 750,000
shares at a total cost of £1,705k.
2. The closing market price at 31 December 2024 used to determine
the value of non-purchased shares was 141.15 pence.
Executive Directors who have not yet satisfied the shareholding requirement
are expected to accumulate shares until they have fully met their shareholding
requirement. They are required to hold 100% of vested shares (post-tax)
granted under the Company's share plans (including any dividend equivalents)
until they have met their shareholding requirement. All other shares acquired
and held by the executive Director or owned indirectly by a partner or family
trust also count towards the shareholding requirement.
Jason Windsor, who was appointed in October 2023, has not yet met the
shareholding requirement. However, the Remuneration Committee is satisfied
with the progress he has made towards his requirements given his tenure.
Under the Policy, an executive Director is required to hold shares up to the
value of their shareholding requirement for 24 months following departure from
the Board. However, if at the date of departure from the Board, the executive
Director holds shares with a value lower than the value of the requirement,
the number of shares held at the date of departure from the Board must be
retained for 24 months thereafter. Any self-purchased shares are not subject
to this requirement. Accordingly, Stephen Bird is required to retain any
shares (excluding self-purchased shares) until 24 May 2026.
Awards granted in 2024 (audited)
The following table shows the key details of the LTIP, deferred and buyout
awards granted in 2024:
Participant Type of award Basis of award % of Face value Number of % payable Details on performance conditions
salary at grant shares for threshold
awarded performance
Jason Windsor Conditional Award LTIP(1) 225% £1,518,750 1,079,884 25% Award is subject to performance against targets measured over three years as
set out on page 120 of the Annual report and accounts 2023
Conditional Award Supplementary LTIP(1,2) 350% £777,152 552,582 25%
Conditional Award Deferred Bonus(1) Not applicable £34,874 24,796 Not applicable Not applicable
Conditional Award 2023 Bonus Award Buyout(1,3) Not applicable £406,515 289,044 Not applicable Not applicable
Stephen Bird Conditional Award LTIP(1, 4) 350% £3,062,500 2,177,545 25% Award is subject to performance against targets measured over three years as
set out on page 120 of the Annual report and accounts 2023
Conditional Award Deferred Bonus(1) Not applicable £392,875 279,347 Not applicable Not applicable
1. The share price used to calculate the number of shares for the
awards was 140.64 pence (the five-day average price over the five dealing days
prior to the grant date of 8 April 2024). The Supplementary LTIP award has
also used this share price as the award relates to the original 2024 LTIP
award.
2. The Supplementary LTIP face value at grant has been calculated
by first determining what the original 2024 LTIP face value at grant would
have been based on a £675,000 salary and 225% maximum opportunity up to and
including 23 May 2024, then a £800,000 salary and 350% maximum opportunity
from 24 May 2024 up to and including 31 December 2024. The difference of this
value and the original 2024 LTIP face value at grant was then used as the face
value at grant for the Supplementary LTIP. This reflects that Jason Windsor
had fulfilled the CEO role from 24 May 2024 onwards, having being appointed as
Interim CEO on 24 May 2024 and consequently CEO on 10 September 2024.
3. As set out on pages 126 and 127 of the Annual report and
accounts 2023, the 2023 Bonus Award Buyout relates to the bonus foregone as a
result of Jason Windsor leaving his previous employer.
4. As set out in the announcement on 24 May 2024, time pro-rating
will be applied to the number of shares (if any) over which Stephen Bird's
2024 LTIP award vests by reference to the proportion of the award performance
period that had elapsed at his termination date of 31 December 2024.
Share dilution limits
All share plans operated by the Company which permit awards to be satisfied by
issuing new shares contain dilution limits that comply with the guidelines
produced by The Investment Association (IA). On 31 December 2024, the
Company's standing against these dilution limits was 0.00% where the guideline
is no more than 5% in any 10 years under all discretionary share plans in
which the executive Directors participate and 0.39% where the guideline is no
more than 10% in any 10 years under all share plans.
As is normal practice, there are employee trusts that operate in conjunction
with the Executive LTIP, the abrdn Discretionary Plan, the deferred elements
of the abrdn plc annual bonus plan, the Aberdeen Asset Management deferred
plans and the abrdn all-employee plans. On 31 December 2024, the trusts held
53,958,247 shares acquired to satisfy these awards. Of these shares 8,084,343
are committed to satisfying vested but unexercised option awards. The
percentage of share capital held by the employee trusts is 2.93% of the issued
share capital of the Company - within the 5% best practice limit endorsed by
the IA.
Promoting all-employee share ownership
The Company promotes employee share ownership with a range of initiatives,
including the abrdn plc (Employee) Share Plan which allows eligible UK
employees (our largest jurisdiction) to buy abrdn plc shares directly from
earnings.
A similar tax-approved plan is operated by the company in Ireland. As at 31
December 2024, 1,015 employees in the UK and Ireland were actively making
monthly contributions averaging £73. As at 31 December 2024, 1,304
individuals were abrdn plc shareholders through participation in the Plan.
The Sharesave Plan was offered in 2024 to eligible employees in the UK. This
plan allows UK tax resident employees to save towards the exercise of options
over abrdn plc shares with the option price set at the beginning of the
savings period at a discount of up to 20% of the market price. As at 31
December 2024, 1,352 employees were saving towards one or more of the
Sharesave offers.
Executive Directors' service contracts
Service contracts for both executive Directors are not for a fixed term but
have notice periods in line with the executive Director's role:
- Six months by the executive Director to the employer.
- Up to 12 months by the employer to the executive Director.
Executive Directors' external appointments
Executive Directors can accept a limited number of external appointments to
the boards of other organisations and can retain any fees paid for these
services. Jason Windsor and Stephen Bird held representative directorships on
behalf of the Group during the year. Jason Windsor is a Governor of Felsted
School and a Director of Felsted School Trustees Limited. The executive
Directors received no fees for their external appointments in 2024.
Significant external positions held during the year are set out below.
Executive Director Role and Organisation 2024 Fees
Stephen Bird Member of the Financial Services Growth & Development Board(1) £nil
Board member at the Investment Association(2) £nil
Member of the President's Committee for the Confederation of British £nil
Industry(3)
£nil
Member of the Lord Mayor's Strategic Advisory Board for the Finance for Growth
Project(4)
1. Appointed on 17 January 2022.
2. Appointed on 27 April 2022.
3. Appointed on 3 February 2023.
4. Appointed on 18 April 2023.
Executive Directors' remuneration in context
Pay compared to performance
The graph shows the difference in the total shareholder return at 31 December
2024 if, on 1 January 2015, £100 had been invested in abrdn plc and in the
FTSE 350 respectively. It is assumed dividends are reinvested in both. The
FTSE 350 has been chosen as abrdn plc has been a member of this index for the
full 10-year period.
Diagram removed for the purposes of this announcement. However it can be
viewed in full in the pdf document
Total shareholder return of abrdn plc compared to the FTSE 350 index
The following table shows the single figure of total remuneration for the
Director in the role of Chief Executive Officer for the same 10 financial
years as shown in the graph above. Also shown are the annual incentive awards
and LTIP awards which vested based on performance in those years.
Year ended 31 December Chief Executive Officer Chief Executive Officer single total Bonus outcome/ annual incentive rates against maximum opportunity (%) Long-term incentive plan vesting rates against maximum opportunity (%)
figure of remuneration(1) (£000s)
2024 Jason Windsor 3,192 77.48 -
Stephen Bird 1,253 77.48 -
2023 Stephen Bird 2,143 35.92 18.75
2022 Stephen Bird 1,696 30.25 -
2021 Stephen Bird 2,795 80.5 -
2020 Stephen Bird 1,044 48 -
Keith Skeoch 1,075 48 -
2019 Keith Skeoch 1,050 9 -
2018 Keith Skeoch 814 10 -
Martin Gilbert 814 10 -
2017 Keith Skeoch 3,028 82 70.00
Martin Gilbert 1,317 56 -
2016 Keith Skeoch 2,746 81 31.02
2015 Keith Skeoch 1,411 87 40.77
David Nish 2,143 90 40.77
1. The change in benefits figures for employees (including
executive Directors) are based on the change in medical premium paid by the
Group on their behalf. Benefits do not include pension contributions for these
purposes.
Relative importance of spend on pay
The following table compares what the Company spent on employee remuneration
to what is paid in the form of dividends to the Company's shareholders. Also
shown is the Company's adjusted operating profit which is provided for context
as it is one of our key performance measures:
2024 % Change 2023
Remuneration payable to all Group employees (£m)(1) 510 (4) % 529
Dividends paid in respect of financial year (£m) 260 (3) % 267
Share buybacks and return of capital (£m) - (100) % 302
Adjusted operating profit (£m) 255 2% 249
1. In addition, staff costs and other employee related costs of
£35m (2023: £78m) and £8m (2023: £4m) are included in restructuring and
corporate transaction expenses and in cost of sales respectively. See Note 6
of the Group financial statements for further information.
Annual percentage change in remuneration of Directors compared to UK based
employees
The table below shows the percentage year-on-year change in salary, benefits
and annual bonus in the relevant year for the executive Directors, along with
any percentage change in fees for the non-executive Directors, compared to the
average Group employee. Year-on-year movement on base salaries or Director
fees is primarily attributable to part-year appointment changes.
% Salary/fee Annual bonus outcome % Benefits(1)
2024 2023 2022 2021 2020 2024 2023 2022 2021 2020 2024 2023 2022 2021 2020
Executive Directors
Jason Windsor(2) 495% - - - - 1,684% - - - - 100% - - - -
Stephen Bird(3) -60% - - 100% - 7% 19% -62% 234% - -100% - - - -
Non-executive Directors(4, 5)
Sir Douglas Flint - - - - - - - - - - - - - - -
Vivek Ahuja - - - - - - - - - - - - - - -
Jonathan Asquith - - - - 202% - - - - - - - - - -
Katie Bickerstaffe - - - - - - - - - - - - - - -
Catherine Bradley -68% 20% - - - - - - - - - - - - -
John Devine 7% - 6% -3% -2% - - - - - 100% - -100% - -100%
Hannah Grove 4% 21% 334% - - - - - - - - - - - -
Pam Kaur - 72% - - - - - - - - - - - - -
Michael O'Brien - 72% - - - - - - - - 100% - - - -
Cathleen Raffaeli 2% 1% 10% - - - - - - - 100% - - - -100%
Group employees(6) 3% 5% - - 3% 17% -20% -47% 50% -53% 5% - - - 17%
1. The change in benefits figures for employees (including
executive Directors) are based on the change in medical premium paid by the
Group on their behalf. Benefits do not include pension contributions for these
purposes.
2. Jason Windsor was appointed to the Board effective 23 October
2023. He received an annual salary supplement whilst serving as Interim CEO
from 24 May 2024 to 10 September 2024 and was then appointed as CEO on 10
September 2024.
3. Stephen Bird stepped down from the Board effective 24 May 2024.
2024 remuneration figures for Stephen used for the purposes of year-on-year
comparison reflect amounts paid until the date on which he stepped down from
the Board, except from the annual bonus outcome which reflects the proportion
of the 2024 performance year for which he served at abrdn prior to
commencement of garden leave on 1 July 2024.
4. Remuneration for non-executive Directors and the Chair is
disclosed on page 138.
5. Catherine Bradley stepped down from the Board effective 24
April 2024. John Devine was appointed as Chair of the Audit Committee
effective 24 April 2024. The subsidiary Board fees as a Chair and a member of
the Standard Life Savings Limited and Elevate Portfolio Services Limited
Boards increased effective 1 August 2023. See the single total figure of
remuneration non-executive Directors table on page 138 for more detail on
differences in year-on-year remuneration.
6. Disclosure is made on the basis of the period 31 December 2023
to 31 December 2024.
How pay was set across the wider workforce in 2024
Our principles for setting pay across the wider workforce are consistent with
those for our executive Directors, in that the proportion of the remuneration
package which is linked to performance increases for more senior roles within
the Company as responsibility and accountability increase.
Base salaries are targeted at an appropriate level in the relevant markets in
which the Group competes for talent. The Remuneration Committee considers the
base salary percentage increases for the Group's broader UK and international
employee populations when determining any annual salary increases for the
executive Directors. As a result of organisational transformation in 2024,
some employees experienced significant changes to their role. New roles and
responsibilities were reviewed and targeted salary increases were made, taking
into account new responsibilities, internal relativities and market data.
These increases were designed to be meaningful to recognise the change in role
and increased contribution of these individuals. For other employees,
increases were generally limited to those earning less than £50,000 (or local
country equivalent).
Having considered the market position of our executive Director pay and the
recent determination of salary for Jason Windsor upon his original appointment
in October 2023, the Remuneration Committee determined that no salary
increases were appropriate for the executive Directors in 2024.
The eligibility criteria for participation in variable pay plans is set so
that more senior individuals have a greater proportion of their pay linked to
performance. For roles where variable remuneration eligibility is retained,
our clear approach is designed to support and reward performance at a Company,
team and individual level. Performance-related variable remuneration includes
deferred variable compensation at a suitable level for the employee's role,
ensuring a performance link over a longer time horizon than a single year.
Variable remuneration for employees, including executive Directors, is
determined as a total pool which is distributed across the business based on
the performance of each business line and function. Individuals are then
considered for a bonus payment on the basis of their individual performance
objectives and goals, taking into account conduct.
The Group operates a Compensation Committee comprising the Chief People
Officer (Chair), Chief Financial Officer and Chief Risk Officer, the role of
which is to consider the implementation of the remuneration policy across the
Group. The terms of reference of the Compensation Committee are set by the
Remuneration Committee and the Chair of the Compensation Committee formally
reports to the Remuneration Committee on all matters which fall within the
Compensation Committee's remit.
Pay ratio
The table below sets out the ratio of CEO pay to the median, 25(th) and 75(th)
percentile total remuneration of full-time equivalent UK employees. We have
identified the relevant employees for comparison using our gender pay gap data
set (snapshot data from 5 April 2024), referred to as Methodology B in the
legislation. This was chosen by the Remuneration Committee as it utilised a
data set which had already been processed and thoroughly reviewed and this
enabled timely reporting for disclosure purposes. Some employing entities are
excluded from the gender pay gap calculation in line with the regulations due
to the number of individuals employed by these entities being less than 250.
The Remuneration Committee considered this would not have a material impact on
the outcome of the pay ratio calculation given the limited number of
individuals this excludes, relative to the total population being captured,
and the range of the remuneration for those excluded individuals, which was
spread across quartiles.
The remuneration paid to each of the individuals identified under methodology
B was reviewed against other individuals within the quartile both above and
below. The individuals identified at the 25(th) and 75(th) percentiles had
ceased employment in the year; therefore, the next identified individuals were
selected. The individual identified at the 50th percentile had changed working
hours in the year; therefore, the next identified individual was selected.
Benefits figures were based on the medical premium paid by the Company on
behalf of employees.
The pay ratio has increased from 2023, which reflects the fact that the CEO
has a greater level of remuneration at risk which is dependent on Company
performance; based on both financial and non-financial performance in 2024,
the bonus for the CEO paid out at 77.48% of maximum, compared to 35.92% of
maximum in 2023 and the LTIP lapsed in its entirety as it did in 2023. The
change of CEO during the year, the buyout awards for Jason Windsor and the
transformation the company underwent in 2024 makes a year-on-year comparison
more challenging. In particular, £1,041,000 of the total remuneration for the
CEO in the year related to buyout awards with performance conditions solely
based on the performance of previous employers. If these were removed, the pay
ratio would be 62 for the 25th percentile employee, 42 for the 50th percentile
employee and 29 for the 75th percentile employee. By design, there are
differences in the priorities which drive how these two populations are
remunerated; as a result, their relative experiences can be different.
The Remuneration Committee is comfortable that the pay ratio reflects the pay
and progression policies and Remuneration Philosophy across the Company as set
out above. Further detail on the make up of workforce pay is set out below.
Year Method 25th percentile 50th percentile 75th percentile
Jason Windsor/Stephen Bird 2024 Option B 81 55 38
Stephen Bird 2023 Option B 39 27 19
Stephen Bird 2022 Option B 35 25 16
Stephen Bird 2021 Option B 62 45 25
Stephen Bird/Keith Skeoch 2020 Option B 49 30 18
Keith Skeoch 2019 Option B 34 23 13
Keith Skeoch 2018 Option B 30 19 12
Salary Total pay
(£000s) (£000s)
CEO remuneration of which: 1,120 4,445
Jason Windsor (excl. Buyout Awards) 773 3,192 (2,151)
Stephen Bird 347 1,253
25th percentile employee 46 55
50th percentile employee 65 80
75th percentile employee 91 118
Remuneration for non-executive Directors and the Chair
Single total figure of remuneration - non-executive Directors (audited)
The following table sets out the single total figure of remuneration for each
of the non-executive Directors who served as a Director at any time during the
financial year ending 31 December 2024. Non-executive Directors do not
participate in bonus or long-term incentive plans and do not receive pension
funding.
Non-executive Directors Fees for year ended Taxable benefits in Total remuneration
31 December year ended for the year ended
£000s 31 December(1) 31 December
£000s £000s
Sir Douglas Flint(2) 2024 475 - 475
2023 475 - 475
Jonathan Asquith 2024 139 - 139
2023 139 - 139
Catherine Bradley(3) 2024 42 - 42
2023 131 - 131
John Devine(4) 2024 140 2 142
2023 131 - 131
Hannah Grove(5) 2024 166 - 166
2023 159 - 159
Pam Kaur 2024 109 - 109
2023 109 - 109
Michael O'Brien 2024 109 1 110
2023 109 - 109
Cathleen Raffaeli(6) 2024 169 8 177
2023 166 - 166
Vivek Ahuja(7) 2024 23 - 23
2023 - - -
Katie Bickerstaffe(8) 2024 23 - 23
2023 - - -
1. Taxable benefits relate to taxable expenses incurred while
undertaking their roles as non-executive Directors of the Group.
2. Sir Douglas Flint is eligible for life assurance of 4x his
annual fee. This is a non-taxable benefit.
3. Catherine Bradley stepped down from the Board effective 24
April 2024.
4. John Devine was appointed as Chair of the Audit Committee
effective 24 April 2024.
5. The subsidiary Board fees as a member of the Standard Life
Savings Limited and Elevate Portfolio Services Limited Boards increased from
£37,500 p.a. to £50,000 p.a. effective 1 August 2023. Total fees include
subsidiary Board fees of £50,000 p.a. (previously £37,500 p.a.) as a member
of the Standard Life Savings Limited and Elevate Portfolio Services Limited
Boards. Hannah Grove also receives a Board Employee Engagement fee of £15,000
p.a.
6. The subsidiary Board fees as Chair of the Standard Life Savings
Limited and Elevate Portfolio Services Limited Boards increased from £55,000
p.a. to £60,000 p.a. effective 1 August 2023. Total fees include subsidiary
Board fees of £60,000 p.a. (previously £55,000 p.a.) as Chair of the
Standard Life Savings Limited and Elevate Portfolio Services Limited Boards.
7. Vivek Ahuja was appointed to the Board and the Audit Committee
effective 1 October 2024.
8. Katie Bickerstaffe was appointed to the Board and the
Remuneration Committee effective 1 October 2024.
The non-executive Directors, including the Chair, have letters of appointment
that set out their duties and responsibilities. The key terms are set out in
the Policy which can be found in the Annual report and accounts 2022 on pages
120 to 130. The service agreements/letters of appointment for Directors are
available to shareholders to view on request from the Company Secretary at the
Company's registered address (which can be found in the Shareholder
information section) and will be accessible for the 2025 AGM.
Details of the date of appointment to the Board and date of election by
shareholders are set out below:
Chair/Non-executive Director Initial appointment to the Board Initial election by shareholders
Chair
Sir Douglas Flint 1 November 2018 AGM 2019
Senior Independent Director
Jonathan Asquith 1 September 2019 AGM 2020
Non-executive Directors
Vivek Ahuja 1 October 2024 -
Katie Bickerstaffe 1 October 2024 -
Catherine Bradley 4 January 2022 AGM 2022
John Devine 4 July 2016 AGM 2017
Hannah Grove 1 September 2021 AGM 2022
Cathleen Raffaeli 1 August 2018 AGM 2019
Pam Kaur 1 June 2022 AGM 2022
Michael O'Brien 1 June 2022 AGM 2022
Implementation of policy for non-executive Directors in 2025
The following table sets out abrdn non-executive Director fees to be paid in
2025. Fees for 2025 remain at the current level.
Role 2025 fees 2024 fees
Chair's fees(1) £475,000 £475,000
Non-executive Director fee(2) £73,500 £73,500
Additional fees:
Senior Independent Director £25,000 £25,000
Chair of the Audit Committee £30,000 £30,000
Chair of the Risk and Capital Committee £30,000 £30,000
Chair of the Remuneration Committee £30,000 £30,000
Committee membership (Audit, Risk and Capital and Remuneration Committees) £17,500 £17,500
Committee membership (Nomination Committee) £10,000 £10,000
Employee engagement £15,000 £15,000
1. The Chair's fees are inclusive of the non-executive Directors'
core fees and no additional fees are paid to the Chair where he chairs, or is
a member of, other committees/boards. The Chair is eligible to receive life
assurance, which is a non-taxable benefit.
2. For non-executive Directors, individual fees are constructed by
taking the core fee and adding extra fees for being the Senior Independent
Director, chair or member of committees and/or subsidiary boards where a
greater responsibility and time commitment is required.
Non-executive Directors' interests in shares (audited)
The following table shows the total number of abrdn plc shares held by each of
the non-executive Directors and their connected persons:
Total number of shares owned Shares acquired during the period Total number of shares owned at
at 1 January 2024 or date of 1 January 2024 to 31 December 2024 or date of
appointment if later 31 December 2024 cessation if earlier
Sir Douglas Flint 200,000 - 200,000
Vivek Ahuja - - -
Jonathan Asquith 205,864 - 205,864
Katie Bickerstaffe 30,195 - 30,195
Catherine Bradley(1) 12,181 - 12,181
John Devine 52,913 - 52,913
Hannah Grove 33,000 - 33,000
Pam Kaur - - -
Michael O'Brien 173,780 - 173,780
Cathleen Raffaeli 9,315 - 9,315
1. Catherine Bradley stepped down from the Board effective 24
April 2024.
Sir Douglas Flint, as Chair, is subject to a shareholding guideline of 100% of
the value of his annual fee in abrdn plc shares to be reached within four
years of appointment. The total investment cost of Sir Douglas Flint's
shareholding was £495k, equivalent to 104% of his annual fee.
The Remuneration Committee
Membership
During 2024, the Remuneration Committee was made up of independent
non-executive Directors. For their names, the number of meetings and committee
member attendance during 2024, please see the table on page 104.
The role of the Remuneration Committee
To consider and make recommendations to the Board in respect of the total
remuneration policy across the Company, including:
- Rewards for the executive Directors, senior employees and the
Chair.
- The design and targets for any employee share plan.
- The design and targets for annual cash bonus plans throughout the
Company.
- Changes to employee benefit structures (including pensions)
throughout the Company.
The Remuneration Committee's work in 2024
Matters covered Key outcomes
Jan-Mar - 2023 Directors' remuneration report and Policy. - Published 2023 Directors' remuneration report for shareholder approval.
- Updates from the Risk and Audit Committees on relevant matters for the - Established remuneration framework to incentivise executive Directors to
Committee's consideration when determining pay outcomes. deliver against company strategy, maintaining alignment with long-term
shareholder value creation.
- Approve performance outcomes for 2023 Annual Bonus and 2021 LTIP.
- Agree 2024 Annual Bonus scorecard measures and targets and 2024 LTIP
measures and targets.
- Review remuneration outcomes for the Material Risk Taker population.
Apr-Jun - Agree Jason Windsor's Interim CEO remuneration package. - Supported the launch of abrdn's CEO succession plan as part of the
company's transformation.
- Approve Stephen Bird's exit remuneration arrangements.
- Ensured company compliance with regulatory remuneration disclosure
- Review regulatory remuneration disclosures and documentation. requirements.
- Assess implications of current external environment on executive pay, new - Considered options for the implementation of Policy in 2025 and for Policy
executive director policies within the UK listed investment management review in advance of being taken to shareholders for approval at the 2026 AGM.
industry and observations from the 2024 AGM season.
Jul-Sep - Mid-year review of performance against targets for annual bonus and - Tracked performance against financial and non-financial executive Director
in-flight LTIP awards for the executive Directors. Annual Bonus scorecard targets as well as for in-flight LTIP awards.
- Remuneration decisions for senior employees within the Remuneration - Supported the appointment of abrdn's CEO.
Committee's remit.
- Approve Jason Windsor's CEO remuneration package.
Oct-Dec - Update the Remuneration Committee and Compensation Committee's Terms of - Ensured Group Remuneration Policy supports company's long-term strategy.
Reference.
- Determined funding available for variable remuneration and reviewed
- Review gender and ethnicity pay gap data. allocation principles, supporting the operation of a performance-driven
culture.
- Review Group Remuneration Policy for 2025 implementation.
- Review variable remuneration pool allocation principles and approve
overall funding.
- Review 2025 remuneration proposals.
At various points throughout the year the Remuneration Committee also:
- Made remuneration decisions for the Executive Leadership Team and
other senior employees within the Remuneration Committee's remit.
- Considered and approved the design of special incentive schemes in
different business areas.
- Considered and approved employee regulatory classifications and
statutory and regulatory disclosures on remuneration matters.
- Received updates relating to regulatory changes and market best
practice.
- Reviewed minutes of subsidiary Committee meetings and their
governance documents.
External advisers
During the year, the Remuneration Committee took advice from PwC LLP (a member
of the Remuneration Consultants Group (RCG)) who were appointed by the
Remuneration Committee after a retender process was conducted in 2022, as
disclosed in the Annual report and accounts 2022 on page 118. As PwC LLP is a
member of the RCG, the Remuneration Committee is satisfied that the advice
given from PwC LLP during the year was objective and independent. The
remuneration advisers do not have connections with abrdn that might impair
their independence.
A representative from our external adviser attends, by invitation, all
Remuneration Committee meetings to provide information and updates on external
developments affecting remuneration as well as specific matters raised by the
Remuneration Committee. Outside the meetings, the Remuneration Committee's
Chair seeks advice on remuneration matters on an ongoing basis. As well as
advising the Remuneration Committee, PwC LLP also provided tax, accounting
support, risk management, consultancy and assurance services to the Company
during the year.
Fees paid to PwC LLP during 2024 for professional advice to the Remuneration
Committee were £126,300.
Where appropriate, the Remuneration Committee receives input from the Chair,
Chief Executive Officer, Chief Financial Officer, Chief People Officer, Global
Head of Reward and the Chief Risk Officer. This input never relates to their
own remuneration. The Remuneration Committee also receives input from the Risk
and Capital Committee and the Audit Committee.
Remuneration Committee effectiveness
The Remuneration Committee reviews its remit and effectiveness each year. The
2024 review was conducted internally, on behalf of the Board, by the Company
Secretary. As part of the review the views of the Board were sought on the
performance of the Remuneration Committee and how Directors felt they were
updated on its activities following each meeting. This is supplemented by any
matters a Director wish to raise as part of their year-end 1:1 discussion with
the Chair.
The review concluded that the Remuneration Committee continued to operate
effectively during 2024 with no material issues or concerns raised. The main
areas in which the Remuneration Committee looked to see continued improvement
in 2025 were in relation to the insight and brevity of materials presented.
More information about the process involved, and its outcomes, can be found on
page 101.
Shareholder voting
We remain committed to ongoing shareholder dialogue and take an active
interest in voting outcomes.
The Policy was last subject to a vote at the 2023 AGM on 10 May 2023 and the
following table sets out the outcome.
Policy 2023 AGM For Against Withheld
% of total votes 94.29% 5.71%
No. of votes cast 675,020,934 40,860,480 189,168,584
The Directors' remuneration report was subject to a vote at the 2024 AGM on 24
April 2024 and the following table sets out the outcome.
2023 Directors' Remuneration Report For Against Withheld
% of total votes 86.83% 13.17%
No. of votes cast 540,767,951 82,055,677 180,082,555
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