On December 16, the boards of Acuity 1 and Acuity 2 ann-ounced that an agreement in principle had been reached for the merger of the two VCTs.
Board members are the same for both VCTs and are unchanged for the merged trust but proposals include an increase in directors’ remuneration. Directors’ annual base fees will rise from £15,000 per VCT to £30,000 and from £20,000 to £40,000 for the VCTs’ chairman and the chairman of the audit committee.
Acuity managing partner Nick Ross will not get a fee for his role as director and the changes will only be implemented if the merger is app-roved by shareholders.
In a shareholder circular, Acuity says the level of remuneration was reviewed in light of “changes to the burden being placed on directors of public companies”.
Chelsea Financial Services head of investment products Matthew Woodbridge says: “I do not believe that the increased workload due to the merger justifies a 100 per cent increase in their pay.
“The industry standard for a chairman is about £15,000-£20,000 per annum and yet they are proposing £40,000 despite poor performance.”
Hargreaves Lansdown investment manager Ben Yearsley says: “The merger is quite a good idea but I have a massive problem with the fees for directors.”
Tax Efficient Review editor Martin Churchill says: “If each venture capital trust was completely separate in terms of their investment, directors would have to spend about as much time in board meetings as they do currently but that is not the case. There is a high commonality between
“This is not acceptable and if investors agree, they can vote not to accept the merger under these conditions.”
Acuity was unavailable for comment.