Foxtons is to ask shareholders to back two new incentive schemes to align director bonuses with actual company performance.

The FTSE-250 listed firm’s current remuneration policy is due for renewal at its annual general meeting on May 13th.

The London agent is proposing removing the cash only bonus of up to 150% of salary for executive directors and senior management and replacing it with a mix of 70% deferred cash and 30% in deferred shares.

Each individual is given a bonus account that pays out 70% of cash annually for three years and the remaining balance in year four is paid in shares.

Awards will be based on the level of profit, cost reductions, sales and lettings growth, customer service levels and employee engagement.

Bonuses can be clawed back if performance conditions are not met.

Its chief executive Nic Budden could earn up to 150% of his salary.

The chief financial officer (CFO) Richard Harris and chief operating officer Patrick Franco (COO) will be entitled to a maximum of 75%.

Additionally, senior management will be entitled to a restricted share plan where stock only becomes unconditionally owned by the director or senior manager after a three-year period and must be held for another two years.

Under the previous plan, the chief executive was granted an option worth 404% of salary face value and 121% of salary fair value.

The new scheme has a maximum award of 100% of salary for the chief executive and 75% for the CFO and COO.

Foxtons said: “The cyclical nature of the market in which the company operates makes the timing of traditional long term incentive awards more relevant than the actual performance of the company.

“In practice they do not encourage a longer term focus for the executive directors because of the challenge of setting realistic targets three years in advance.

“The bonus banking plan only requires the remuneration committee to set annual targets which are more likely to be relevant to the market facing the company at that time.

“The restricted share plan awards are genuinely long-term and incentivise a focus on sustainable performance throughout the business cycle.”

Executive directors have already volunteered to take a 20% reduction in base salary and all non-executive directors a 20% reduction in fees for at least the two months of April and May 2020 due to the coronavirus pandemic.

The agent has asked shareholders to attend its AGM virtually next month due to the coronavirus restrictions.