Code said options should not vest for three years

Jim Sutcliffe, appointed deputy chairman of alternative business structure Quindell earlier this month, has resigned from the board of the Financial Reporting Council (FRC).

Mr Sutcliffe, who was chair of the FRC’s codes and standards committee, was given 10.9m share options in Quindell when he accepted the posts of deputy chairman and strategy director earlier this month.

The FRC’s corporate governance code states, in a schedule on remuneration of directors: “In normal circumstances, shares granted or other forms of deferred remuneration should not vest or be paid, and options should not be exercisable, in less than three years. Longer periods may be appropriate.”

Mr Sutcliffe’s options vest on different dates – all of them within a year.

Until now, corporate governance concerns at the AIM-listed company had centred on new non-executive chairman Richard Rose, who received over 8m in share options.

Under the Quoted Companies Alliance (QCA) corporate governance code, which applies to AIM-listed companies, non-executive directors “do not normally participate in performance-related remuneration or have a significant participation in a company share option scheme”.

The code said that on the rare occasion where performance-related remuneration was under consideration, “shareholders must be consulted and their support obtained.”

Like Mr Sutcliffe, the 8.7m options awarded to Mr Rose vest at various stages over the next year.

Announcing the departure of Mr Sutcliffe, FRC chairman Sir Win Bischoff thanked him for his commitment and service to the board and his “effective leadership of the codes and standards committee and before that the board for actuarial standards of the FRC.”

On its website, Quindell said its directors recognised the importance of sound corporate governance and “have regard to the corporate governance guidelines for AIM companies published by the QCA”.