Income Asset Management (ASX: IAM) has announced the issue of equity-linked securities to key staff. Income Asset Management is a full-service investment house with market leading expertise in both bond and loan markets. They aim to provide investors, advisers and portfolio managers with the most capable platform to research, execute, and manage their income investments. The securities, which may convert to 34,000,000 ordinary shares, represent approximately 3.7% of the company’s currently issued shares.
The company’s board believes that aligning staff interests with those of shareholders is crucial for maximizing long-term value. Previously, IAM issued Zero Exercise Price Options (ZEPOs) and Performance Rights as part of its incentive scheme. However, these older incentives, with materially higher-than-market vesting hurdle target prices, are set to expire within 18 months, reducing their effectiveness.
Currently, non-KMP staff hold less than 1% of IAM shares. There are 26,725,000 ZEPOs and Performance Rights outstanding to non-KMP staff, with hurdle target prices ranging from $0.20 to $0.75, expiring in April 2027. The new issue of 34,000,000 ZEPOs is intended to refresh the staff incentive framework, ensuring it remains meaningful and aligned with shareholder outcomes.
Vesting of the new ZEPOs is contingent upon a three-year continuous service period, with no vesting hurdle target price. Each ZEPO will convert to one fully paid ordinary share upon exercise and will expire 10 years after the issue date. The IAM Board of Directors approved the announcement. The board believes this approach will support the company’s ability to attract and retain talent and preserve cash reserves by utilising equity-based incentives.
