IQE Iqe Plc

 
TIDMIQE 
 
 
   IQE plc 
 
   ("IQE", the "Company" or the "Group") 
 
   2019 AGM LTIP RESOLUTION VOTING AND PROPOSED ACTIONS 
 
   At the AGM on 25 June 2019, 42.9 percent of shareholders voted against 
the resolution to approve the adoption of the 2019 IQE Long Term 
Incentive Share Option Plan ("2019 LTIP"). 
 
   In line with Provision 4 of the UK Corporate Governance Code 2018, this 
announcement is intended to outline the Company's understanding of the 
reasons behind the 2019 AGM LTIP resolution voting result and to provide 
an update on the actions of the Remuneration Committee and Board as a 
result of the vote. 
 
   The 2019 LTIP replaced the previous Executive Share Option Scheme 
approved by shareholders at the AGM in July 2009 and was intended as a 
natural update to the prior rules, which had not been the subject of any 
representations from shareholders since it was approved by shareholders 
in 2009. Accordingly, the Remuneration Committee did not anticipate any 
significant dissent and therefore did not seek to engage shareholders in 
advance of submitting the plan to an advisory vote at the 2019 AGM. 
 
   The Board was aware however that in advance of this year's AGM, 
Institutional Shareholder Services ("ISS") issued a report in which it 
recommended that shareholders vote against the resolution to approve the 
2019 LTIP plan, citing two principal concerns: 
 
   1.    That the dilution limits sought under the plan exceeded the 
standard dilution limit expected by institutional investors of 10% in 10 
years for all of the Company's share schemes; and, 
 
   2.    That the plan permits the vesting of outstanding options to good 
leavers without a pro-rata reduction to vesting based on performance and 
the portion of the vesting period expired up to the time of the 
termination of employment. 
 
   Prior to and following the AGM, the Board engaged with shareholders, 
emphasising that as a global technology company with the majority of its 
operations employing staff in Asia and the USA, share options are 
considered an essential tool for the Company to attract and retain the 
world-class talent required to sustain and grow our business.  The 
adoption of the 15% dilution limit in 10 years in 2009 was intended to 
ensure that we would have sufficient flexibility to offer competitive 
rewards to highly-sought after candidates in critical roles throughout 
the entirety of the organisation, as all IQE employees are offered share 
options as part of their compensation packages. 
 
   The Board would also state that since IQE's award levels are typically 
denominated in percentage of salary terms, dilution is also a function 
of the prevailing share price.  With the current IQE share price notably 
higher than over the period 2009-2016, it is considered significantly 
less likely that the exceptional dilution limit set out in the 2019 LTIP 
scheme will be utilised. 
 
   Notwithstanding the above and that the 2019 LTIP resolution was 
ultimately approved at the AGM, the Board recognises that the 
significant vote against is an indication of the strength of shareholder 
sentiment in this area.  The Board has therefore resolved to take the 
following actions in response: 
 
 
   1. The Remuneration Committee will undertake a review of the Directors' 
      Remuneration Policy with a view to submitting a new Policy to 
      shareholders at the 2020 AGM.  As part of this review, the Remuneration 
      Committee has undertaken an exercise to understand when IQE expects to be 
      able to comply with the standard 10% dilution limit.  The result 
      demonstrated that, due to the number of share options currently 
      outstanding to all IQE employees, a reduction to the 10% dilution limit 
      is not currently feasible.  However, the Board recognises the importance 
      of moving to a 10% dilution limit and is committed to doing so over time; 
      and, 
 
   2. The Board is taking steps to amend the LTIP plan rules to align the 
      leaver provisions for all employees to those set out for the Executive 
      Directors.  This language will make clear that the maximum potential 
      entitlement for a good leaver will be a pro-rata vesting of outstanding 
      awards i.e. taking account of the time from grant to the time of 
      departure as a proportion of the full vesting period. 
 
 
   CONTACTS 
 
   IQE plc 
 
   +44 (0) 29 2083 9400 
 
   Drew Nelson 
 
   Tim Pullen 
 
 
 
   Peel Hunt LLP (Nomad and Joint Broker) 
 
   +44 (0) 20 7418 8900 
 
   Edward Knight 
 
   Nick Prowting 
 
   Christopher Golden 
 
 
 
   Citigroup Global Markets Limited (Joint Broker) 
 
   +44 (0) 20 7986 4000 
 
   Christopher Wren 
 
   Peter Catterall 
 
   Headland Consultancy (Financial PR) 
 
   + 44 (0) 20 38054822 
 
   Andy Rivett-Carnac: +44 (0) 7968 997 365 
 
   Tom James: +44 (0)78 1859 4991 
 
   ABOUT IQE 
 
   https://www.globenewswire.com/Tracker?data=B-tsx-575oTDVktIEifpujfiyFQyzW3TVfCiiaUmEct1sMeY0KFPjbsdA5_CpeJIA16PD1YPGPxrTgcRNVCtUAUhktKxwqWqA_3YXT24BCZTba_HkQTp5lV_Y2Z1qXhiKwyw9_hbC7mP7pEAI9LJh7zYdj9BAHQZJzyRcRQiamMpF_PMt_h34ihHTdSsRB99TNV3ASMocTORdCpkAMDiBD9nIV21EiVJ1XqMxTB0ATRc3_BodfnTkbqhspkqdV3doIQg-CRtEUmaaQnFp3L29HtP0bC0fdj_tefPOj9CMzjp5RHT8KEPSc1qjelQy1f1TCK0rN9NG1M2ahExzr-ZSx3Ynf_kvYNOknJ2nkGShn7jcmdGh_uh5c1X1XofjfbjlohJ2HVhKVkWoRr_BYhdVjcsbCsx_tKktI9uuSx_1fA= 
http://iqep.com 
 
   IQE is the leading global supplier of advanced compound semiconductor 
wafers that enable a diverse range of applications across: 
 
 
   -- handset devices 
 
   -- global telecoms infrastructure 
 
   -- connected devices 
 
   -- 3D sensing 
 
 
   The macro trends of 5G and connected devices are expected to drive 
significant growth for compound semiconductors over the coming years. 
 
   As a scaled global epitaxy wafer manufacturer, IQE is uniquely 
positioned in this market which has high barriers to entry. IQE supplies 
the whole market and is agnostic to the winners and losers at chip and 
OEM level. By leveraging the Group's intellectual property portfolio 
including know-how and patents, it produces epitaxy wafers of superior 
quality, yield and unit economics. 
 
   IQE is headquartered in Cardiff UK, and is listed on the AIM stock 
Exchange in London. 
 
 
 
 

(END) Dow Jones Newswires

December 24, 2019 02:00 ET (07:00 GMT)

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