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This is contrary to trends seen among FTSE 100 and FTSE 250 listed companies where, NBSC says, LTIPs have increasingly been implemented over Option Plans.

David Tankel, senior partner at NBSC, comments: ‘In recent years, there has been increasing emphasis on transparency with regard to remuneration and investors have heavily scrutinised the performance related elements of pay.’

The survey, which analysed the remuneration arrangements of 403 companies coming to the market (the Full List or AIM) between 1 August 2004 and 30 April 2006, found that of the 20 larger AIM companies granting options at IPO, 40 per cent disclosed that all or some options would be subject to performance conditions.

Looking at the smallest AIM companies granting options at IPO, NBSC identified that 25 per cent disclosed some or all of the options would be subject to performance conditions. The most popular performance condition was earnings per share (EPS) with shareholder return being the measure of choice by only nine per cent of companies.

A significant number of companies, says NBSC, chose to pay a special bonus at IPO. Thirty-three per cent of those companies with a full listing paid executive directors a bonus at IPO, compared to 21 per cent in a similar survey conducted in 2004.

Bar one company, NBSC found these bonuses were paid wholly in cash. Of the AIM companies with market capitalisation over £50 million, five paid cash bonuses at IPO. Only eight per cent of smaller AIM listing companies paid a bonus and all were in cash.

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