Annual Report and Accounts 2022
Money
without
borders.
Wise Annual Report and Accounts 2022
Contents
Strategic Report
At a glance 2
Chair’s statement 4
CEO statement 6
Market overview 9
Our products 10
Our strategy 12
Our infrastructure 14
Key performance indicators 16
CFO review 18
Our people 22
Environmental & social impact 28
Our stakeholders and section 172 statement 34
Risk management 41
Viability statement 50
Non-financial information statement. 52
Corporate Governance
Governance at a glance 55
Our Board 56
Governance of the Wise Group 60
Chair’s introduction to governance 61
Corporate governance statement 63
Board leadership and company purpose 71
Composition, succession and evaluation 77
Nomination committee report 79
Audit and risk committee report 82
Directors’ remuneration report 90
Directors’ report 113
Statement of Directors’ responsibilities 116
Financial Statements
Independent auditors’ report 119
Consolidated statement of comprehensive income 125
Consolidated statement of financial position 126
Consolidated statement of changes in equity 127
Consolidated statement of cash flows 128
Notes to the Group consolidated financial statements 129
Company statement of financial position 154
Company statement of changes in equity 155
Notes to the Company financial statements 156
Other information
Alternative performance measures 160
Glossary 162
Company and shareholder information IBC
We are building
the best way to
move and manage
money around
the world.
We’re now moving 3.5% of people’s international transfers,
saving customers what we estimate to be over £1 billion
across the last year. But we know our customers need more
than just transfers, so we want to help them in more ways.
Changing our name from TransferWise to Wise a year ago
reflects this ambition. Transfers still power our underlying
infrastructure, but what we’re offering today
is an international banking experience.
We’re nowhere near mission complete, but 13 million people
and businesses are now helping us get closer every day.
Kristo Käärmann
Co-founder and CEO
The Wise Account is solving
international banking, and is now
available in more countries with
more product features
So we are growing fast, at scale,
and profitable. We are investing
heavily in future growth whilst
managing a healthy 20%+
Adjusted EBITDA margin
The improvements in product
experience drive our growth.
Customers moved £76bn of volume,
40% more than last year
Our infrastructure got leaner
and faster, enabling us to reduce
prices and complete 49%
of transfers instantly
…But we have just got started. Whilst we now move 3.5% of personal
transfers, there’s still so much more to do for people and businesses
around the world!
Highlights.
Revenue (£m) Gross profit (£m)
Adjusted EBITDA (£m) EPS (pence per share)
2022
559.9
421.0
302.7
2021
2020
2022
121.4
108.7
68.4
2021
2020
2022
371.9
260.5
188.1
2021
2020
2022
2021
2020
3.40
3.31
1.64
Wise Annual Report and Accounts 2022 1
Running-Header
2011
Kristo Käärmann and
Taavet Hinrikus start
TransferWise and hire
first employee
First office opens
in London and
US$1.3 million in
seed funding raised
£1 billion in cross-border
payments reached
2012 2014
2017
Multi-Currency
Account launched
(now the Wise Account)
Debit Mastercard
offered in the UK,
EU, US, Australia,
New Zealand and
Singapore
FCA licence to
offer regulated
investment
activities in the
UK granted
2018 2020
TransferWise
becomes Wise
Direct listing on
London Stock Exchange
2021
Wise Account launched in Brazil
and Malaysia
Launched Wise SWIFT Connector
2022
Launched in the United
States and Australia
2015
First business product
offering launched
Launch of our
Asia-Pacific hub
in Singapore
2016 2017
We’re just
getting started.
At a glance
Wise Annual Report and Accounts 20222
Strategic Report
Wise today.
Wise is a global technology company building the best way
to move and manage money around the world.
>13m
customers around the world
67
licences across 44 countries
66%
of customers coming via
word of mouth in FY2022
10
local account details giving
customers the ability to
receive money
3.1m
physical debit cards issued
£76bn
cross currency volume
processed in FY2022
£6.8bn
held in the Wise accounts
40%
FY2022 volume growth
Our products are trusted worldwide
Low cost
0.61%*
Fast
49% instant**
Convenient
send, spend,
receive, invest
in few taps
Transparent
No hidden fees
* Average fees we charge our customers as at Q4 FY2022.
** % of transfers which moved instantly in Q4 FY2022 – instant defined as less than 20 seconds.
Wise Annual Report and Accounts 2022 3
I am very pleased to be the Chair of Wise as we publish our
first Annual Report as a public company. With a mission to build
the best way to move money internationally, Wise continues
to improve international money services for millions of people
and businesses every day.
It’s been just over a decade since Wise was founded; it’s been
a long journey, and there’s much more still to do. This includes
building trust with even more customers and regulators, and
scaling increasingly complex operations across new regions –
each with their unique challenges. But 11 years since Wise was
conceived, the momentum for the mission is still as inspiring
as ever.
Wise’s mission to fix international money, coupled with the
deepening interconnectedness of our global economy, led us
to an early appreciation for our stakeholders around the world,
including customers, regulators and owners. As part of this,
we have spent the last five years developing a world-class
Board of Directors with broad functional,
scaling, and geographic
experience to support Wise’s
continued growth as a newly
public company.
With this faster growth
comes more challenges,
but in working through
these we’ll sustain
a competitive
advantage in the industry.
And maintaining this
is a key role of the Board.
Fixing
international
money.
Chair’s statement
40%
FY2022 volume growth
£559.9m
FY2022 revenue
Wise Annual Report and Accounts 20224
Strategic Report
And so the Board happily takes on this challenge to help Wise
scale, and to meet the ever-growing but appropriately high
standards of our stakeholders around the world.
Part of the magic is that we believe we have a rare alignment
across customer, regulator, and shareholder. Customer usability
and speed of service can sometimes be at odds with customer
and financial crime protection. Our products, management team,
and Board try to strike the right balance. Our role as a Board
is to help maintain this alignment and continue to keep our
stakeholders pleased over the coming decades.
But we don’t exist in a vacuum. The world is changing fast
in front of our eyes, and this past year has been sadly marked
by war and the ongoing pandemic. Both presented immense
challenges for our Wisers and our customers. The team at Wise
has worked hard through all of this to deliver on the mission –
to build a world-class infrastructure that provides a fast, cheap
and convenient way to move money.
What we’re doing is working.
Over seven million people and businesses from around the world
used Wise over the last year. Our growth has been significant,
with 24% more customers using Wise this year, completing more
transactions across more products than ever. The average price
our customers now pay has reduced by 12% over the year.
This is reflected in the 40% increase in the amount of money
transferred by Wise from one currency to another, reaching
£76 billion for the year.
All of this was delivered whilst maintaining a healthy and
sustainable adjusted EBITDA margin of 22%. This reflects our
investment in our future, which saw the expansion of the Wise
team by c. 950 to almost 3,400 Wisers working to deliver for
our customers.
What have we done as a Board to help build
a larger, stronger Wise?
Firstly, we’ve built out our Board, significantly enhancing the
calibre and diversity of experience. It was a privilege to become
Chair during this most recent financial year, building on my
experience with Wise as having served as Senior Independent
Non-Executive Director on the Board since 2019. We also welcomed
several new Board members: Clare Gilmartin, Hooi Ling Tan and
Terri Duhon. Our new Directors bring many years of experience
in the growth and governance of technology and financial
businesses (see more in the Corporate Governance section).
Our Board, with existing and new Directors, is entirely committed
to providing the leadership and governance needed to support
Wise on its mission. My sincere thanks go to our departing
Director, Taavet Hinrikus, for his substantial contributions to
making Wise the company that it is today.
Secondly, we’ve helped Wise break new ground and tackle
growth challenges. As a Board we’ve spent time providing the
support and challenge needed to develop the strategy by which
the business will pursue its mission. The growth numbers speak
for themselves and our work together is intended to support this
for years to come.
We also spent time helping the business navigate the expected
risk and compliance challenges. You’ll read more in our Audit
and Risk Committee Report how we’ve helped focus on
managing these exposures and vulnerabilities as we grow, as well
as building and maintaining enduring regulatory relationships.
We’ve also started to adapt our remuneration so it’s consistent
with what’s expected of a public company – and importantly
one that operates in financial services; see our Remuneration
Committee Report for more details. Like many businesses,
we’ve worked carefully through some challenges as we grow,
and our wider Corporate Governance Statement sets out how
we’ve maintained appropriate governance as a Board (see our
Nomination Committee Report more details).
Finally, we supported Wise as it transitioned into life as a
public company in July 2021. We worked hard and creatively to
meet the needs and expectations of a public company without
distracting from the day to day – making sure the business was
not negatively impacted. This was a significant but successfully
executed move, widely anticipated and the first of its kind
on the London Stock Exchange.
Where is our focus, and what can you count on?
Over the coming years we as a business will continue to focus
on investing in our significant growth opportunities, in a manner
that is consistent with our mission, and which is built upon
a long-term sustainable model.
I know the Board joins me in saying thank you to every Wiser
for their huge contribution, and to all our customers and
stakeholders for their support of our mission.
David Wells
Chair
28 June 2022
“Wise is changing how
money moves around the
world, and we’re building
governance that will help
Wise continue to scale and
achieve its mission.”
Wise Annual Report and Accounts 2022 5
Welcome! I’m excited to share
with you our first Annual Report
as a public company.
In 2011 TransferWise was born. My co-founder Taavet and I set
out to fix banking for international people. In fact, international
banking didn’t really exist.
We knew people deserved better than hidden charges, marked-
up exchange rates and slow transfers when their money crossed
borders. They didn’t want trips to their bank branch and they
didn’t want anxiety about where their money was when in transit.
So we started building the infrastructure to move money
instantly, conveniently, transparently and working towards
getting it closer to free. Fast-forward 11 years and we’re now
moving 3.5% of personal money that moves across borders.
We’re really pleased to get this far – but there’s still 96.5% left
to go. And the opportunity to support businesses is even greater.
Why, over a decade on, is our mission
still incomplete?
Firstly, because traditional banks haven’t improved. Many financial
institutions continue to lead with opaque and untransparent
pricing which can confuse customers. In the past there haven’t
been many ways to move money across borders, so traditional
banks have had no incentive to get smarter.
Secondly, when it comes to money, international people and
businesses need more than just transfers. We continue to answer
these needs and now offer more than just money transfers –
we’re an international account for expats, global networkers and
businesses around the globe. That’s why a year ago we changed
our name to Wise. Our infrastructure powers our three products
– the Wise Account, Wise Business, and Wise Platform.
Great progress.
But it’s still
so early.
CEO statement
Wise Annual Report and Accounts 20226
Strategic Report
How we’re responding to the war in Ukraine
With an office in Cherkasy and many Ukrainian Wisers, Russia’s
invasion of Ukraine has been particularly poignant for Wise.
Our priority has been the safety and wellbeing of our team
in Ukraine.
We’ve fought to keep our Hryvnia (UAH) route open, and have
been working with banks on the ground to remove transfer
limits. We’ve also kept fees to send to UAH as low as possible,
as well as waive fees for transfers to select charities.
Wise is in a unique position to help refugees send and receive
money. We’ve been able to issue thousands of digital cards to
Ukrainians, so they can continue to spend money in Ukraine,
Poland, Hungary and across Europe.
Along with the rest of the financial community, we have
responded to sanctions in Belarus and Russia, closing any
accounts there. In reacting quickly and increasing our screening
capacity, we ensured our other customers were not disrupted
by these changes.
Our fight against hidden fees continues
It’s 2022. And yet, we still see banks and other service providers
continuing to hide fees in inflated exchange rates with claims
that it’s not possible to show the true cost, or use the real
exchange rate. Consumers and businesses think they’re getting
a good deal, when in reality they are paying much more than the
market rate.
We’re not asking those financial providers to scrap all fees.
We’re calling on them to be transparent. To get there, we need
policymakers to address these misleading practices, close the
loopholes and make it possible for consumers and businesses
to accurately compare prices.
Years ago, we built a comparison table on our homepage,
comparing banks and other providers. We even tell people when
we’re not the cheapest option. If people want to pick a more
expensive deal, that’s okay! It will at least be an informed choice.
Unlocking that informed choice and getting rid of hidden fees
is core to why Wise was founded in the first place.
This year, we have a real opportunity to change the rules. In the
United States, the Consumer Financial Protection Bureau is looking
into hidden fees. In Europe, the Payment Services Directive could
close the loopholes. Globally, the United Nations, the World Bank
and the Financial Stability Board have all committed to stronger
wording on transparency in cross-border payments.
We have momentum. Wise has nothing to hide and you can
make sure others don’t either.
Through these products we bring money without borders
to those who live and work across multiple countries.
We’re making progress on strengthening those foundations.
49% of our transfers are now instant, arriving in less than
20 seconds. A lot of the time they’re incredibly low cost,
and we continue to find ways to reduce the cost for the
customer. This means that today, over 13 million people
and businesses are saving a billion pounds a year using
Wise compared to their bank.
I’m excited to take you through what we’ve been up to this
past year.
How have we done this year?
This year we brought the Wise Account to people in Brazil and
Malaysia and introduced the Wise card in Canada. The Wise
Account lets you hold over 50 currencies in one place, and
convert between them instantly. You can spend anywhere
with the Wise debit card too and get local bank account details
in 10 countries, allowing you to receive money internationally.
Last year, we also launched ‘Assets’ in the UK, so customers can
choose to invest their money, whilst retaining instant access
to it – no matter the currency. Our investment plans for the
Wise Account include developing and enriching our existing
capabilities of sending, receiving, spending and investing.
For Wise Business, we’ve deepened our partnership with
QuickBooks so that paying bills is simple and quick; listening
to feedback from customers on what they needed to run their
business. Money management has also been made easier for
employers and employees alike, with the launch of expense
cards; giving businesses the ability to issue cards to staff
members and set account spending limits.
And for banks and enterprises who want to offer international
banking features, they can plug into our Wise API, so their own
customers can benefit from our infrastructure and service.
We have also continued to build our Wise Platform, including in
the USA where we integrated with Google Pay, allowing US users
to send money to friends and family via their app, but we also
linked up with Sable (a US neo bank). We also integrated Wise
Platform with South Korea’s second largest bank, Shinhan Bank,
meaning that our cheaper and faster payments are now even
easier to use for over 11 million of their customers in South Korea.
This was also a big year for the Company itself. We grew from
around 2,400 Wisers to almost 3,400 in just 12 months – and
opened a new office in Austin, Texas to power up our growth
in North America. In July 2021, Wise listed on the London Stock
Exchange, and although the listing hasn’t changed who we are
or how we operate, we‘re hugely proud that our customers can
own a stake in Wise. Now every stakeholder can be more closely
aligned with our mission and invest in the fight against archaic
financial borders.
Matt will cover the details of the financials, but FY2022
was another great year financially for Wise. I take great pride
in being able to say that we continue to operate a sustainable
model and that we have been profitable for five consecutive
years, all whilst building a much better product and growing
volumes significantly.
Wise Annual Report and Accounts 2022 7
What’s next for Wise
In an increasingly fractured world, the need for honest and
borderless international banking has never been greater.
We are driven by our mission to build money without borders
and to make the lives of international people and businesses
easier – from their very first transfer to giving their successful
business a global reach.
International people and businesses are underserved. We grew
our market share of personal transfers to 3.5%, and we will
continue to grow our smaller share of business transfers.
CEO statement continued
What we will provide as we work towards our mission is:
• Wise Account – the best account for international people
• Wise Business – the best account for international businesses
• Wise Platform – infrastructure to allow other banks and
enterprises to serve their international customers better
We will continue to invest in infrastructure, build features for a
smooth and delightful banking experience, and expand globally
to bring Wise to more people and businesses in the world.
On behalf of the Board of Directors:
Kristo Käärmann
Co-founder and CEO
28 June 2022
with Kristo Käärmann on the importance of transparency.
Why does transparency matter?
When I started Wise with my co-founder Taavet over a
decade ago, we were both frustrated with how the financial
system was run: we had both made the same mistake.
We lost money in inflated exchange rates somewhere
in between banks when we tried moving money
internationally. What happened to us back then still
happens today. Millions of people get ripped off
every day, paying c.£180 billion in hidden fees every year.
We vowed to do things differently and make money
move freely across borders, without any nasty surprises.
That’s how the Company was born. But we will only achieve
our mission for full transparency if all providers are
transparent. People deserve to know the truth.
Will Wise lose its competitive advantage if the
industry moves towards transparency?
No. Transparency is about treating consumers and
businesses fairly. It’s about telling customers exactly how
much it costs when they make a transaction, using a neutral,
live mid-market rate as the global benchmark. No hidden
fees in inflated exchange rates.
Try and find a comparison website today that will tell you
all the costs and charges when you spend, send or receive
money across borders. It’s just not possible. People are
unable to find the best deal and we’re not competing
on an equal footing. Transparency will change that.
Wise already charges as little as possible. We pass our
savings on to our customers. Our low fees combined with
our convenience and our speed, that’s how we’ll remain
ahead of the competition.
Has there been any progress in the last year?
The international community has really stepped up their
game. Supranational organisations such as the Financial
Stability Board, the United Nations and the World Bank
are all advocating for stronger transparency rules. Now we
just need governments around the world to listen and act.
The financial industry knows it’s the right thing to do,
so better still, they should get ahead of the rules
and stop hiding fees in inflated exchange rates.
Luckily, there are legislative opportunities: in the United
States, the Consumer Financial Protection Bureau is looking
into hidden fees. In Europe, the Payment Services Directive
could close the hidden fee loopholes. But while we wait for
legislation to come through, we will continue to hold the
industry accountable. Research has shown that consumer
understanding doubles if transparency is introduced across
the market. Standardisation matters and transparency across
the industry remains a key pillar in our mission.
Are you hopeful about the direction of travel?
It will take a while before we get to 100% transparency, but
there is progress. In the past 11 years, I haven’t heard a single
compelling case against telling customers how much they’re
being charged. This shows that the industry is running out
of excuses and regulators will find it easier to crack down
with strong laws to put an end to hidden fees. Consumers
set higher standards for their financial services providers,
including standards on transparency. We should give them
the tools to hold their providers to account. Transparency
won’t happen overnight, but hopefully in a few Annual
Report time, we won’t need to have this conversation!
Wise Annual Report and Accounts 20228
Strategic Report
Market overview
More people and businesses are becoming international and
the need to move and manage money is growing. The market
is getting bigger, driven by an increase in international mobility,
and international trade, so globalisation, increased migration and
rapid technological developments are all underlying drivers for
this growth.
The market for cross border transfers alone is estimated
at £22 trillion in 2021 and is expected to reach £28 trillion
by 2027 according to strategic payments consultant Edgar,
Dunn & Company (EDC).
This includes a broad set of use cases such as remittances,
e-commerce card payments, real estate investments and tuition
bills, cross-border payments of salaries, suppliers, and payments
for merchandise and services from abroad.
But the market is dominated by banks that provide an
expensive, slow and inefficient service, reliant on outdated
infrastructure. Fees are kept high to cover the costs associated
Moving money internationally is
broken. That’s why we’re here.
with this intermediary-heavy
network which is unreliable,
hard to monitor and has
manual or semi-automated
processes. Further, the lack
of transparency on fees
means that there are limited
pressures to solve this
problem from within. Some
new entrants are bravely trying
to solve these problems.
We have spent the last 11 years
building a replacement infrastructure for
correspondent banking and have already made
great progress in fixing the important problem
of moving money across borders cheaply, conveniently and with
transparent fees.
Total number of international migrants
(at mid-year millions)
2021 2027E
Personal Business/SMB Enterprise CAGR
10%
3%
3%
2.4
8.5
11.3
4.3
10.4
13.8
Total: 22.3t
Total: 28.5t
Global cross-border payments market volume
(GBP in trillions) *
These include a broad set of use cases such as remittances, e-commerce
card payments, real estate investments and tuition bills, cross-border
payments of salaries, suppliers, and payments for merchandise and
services from abroad.
* Estimate of market size of cross-border payments market by EDC.
Converted to from USD to GBP at the exchange rate of 1.35 and
rounded to the nearest whole number.
0
100
200
300
1990 1995 2005 2010 2015 20202000
221
248
281
People and businesses
move over £22 trillion
around the world every
year but pay significant
fees, often unknowingly,
for a slow service
Source: Global Migration Data Portal
Wise Annual Report and Accounts 2022 9
Our products
We serve our customers
with three products.
When it comes to money,
international people and
businesses have more needs
than just transfers.
As a result, today we are much
more than just money transfers
– we’re an international account
for immigrants, global
networkers and businesses
around the globe.
This is why a year ago we
changed our name to Wise,
to better reflect our growing
proposition for our current and
future customers. Our transfer
infrastructure powers our three
core products – the Wise
Account, Wise Business
and Wise Platform.
Our focus remains building
money without borders for
those who live and work across
multiple countries. And there’s
still lots to do.
Wise Annual Report and Accounts 202210
Strategic Report
Wise Account
The Wise Account is our product for personal customers. We started with just transfers
and now our customers can also receive, spend, hold, and most recently invest through
Wise Assets. It has become a staple for those managing money across borders as we’ve
developed the features to support more of our customers’ money needs.
We know when customers adopt more of these features they start to really unlock the
full potential of the Wise proposition and we continue to build the Wise Account to
support the new use-cases which customers might need.
More customers adopt multiple products, using Wise more frequently. Personal volumes
account for over 70% of our total volumes.
Our vision for Wise Account is to be the best account for international people who need
to move and manage money across borders. For a subset of these customers we want
to become their primary account.
Wise Business
Our business offering is one of our fastest growing products. We know that international
businesses remain underserved by banks and neo banks alike. We are building a product
that will serve as one of their main business tools, so that they can focus on what’s
important – growing their business. Today businesses can pay their suppliers and
employees and manage their expenses on Wise.
During the year, over 400k businesses used our services – from sole traders, to SMBs
and larger companies using us to get paid, manage their funds and pay employees and
suppliers. The business portfolio drives 26% of Wise cross-currency volume and it grew
59% YoY.
Our vision for Wise Business is to be the only account international businesses need,
supporting them on all of their jobs – including getting paid, paying employees and
suppliers, managing cash flow and treasury and running expenses
Wise Platform
Our platform allows businesses and banks to offer their own customers faster,
cheaper and more efficient international payments. Customers get a smooth
transfer experience in their native banking app, and the businesses don’t have
to build the infrastructure themselves.
We continue to focus on building new partnerships across the world providing
more customers access to the Wise experience. We have over 50 partners –
banks and non-banks who serve their customers with cheaper and faster
money movement capabilities.
Our vision for Wise Platform is to become the distribution partner of choice for banks
and enterprises, opening up all of Wise’s features. We started with offering transfers
to our partners, but we aim to provide tailored access to the majority of features
that are available to our direct customers, including accounts, cards, and more.
Wise Annual Report and Accounts 2022 11
Our mission pillars.
How are we doing along our mission?
Our mission drives us, so we have defined and constantly monitor our mission pillars to track our progress.
We managed to reduce prices for cross border payments by 12% and over 49% of our transfers are now instant, arriving in less than
20 seconds. We improved our Account for People and Businesses and made it available in more countries.
This means that today, our personal and businesses customers are saving more than £1 billion a year using Wise compared to using
their bank.
Our strategy
Price
Our superior infrastructure underpins our low unit costs,
allowing us to charge up to eight times less than what
leading traditional banks charge, thereby saving our
customers more than £1 billion in FY2022. We remain
committed to sustainably reinvesting back into
the business in order to support price reductions
for our customers.
Speed
We move money at speeds previously thought impossible.
We have continuously increased the speed of our
transfers, and now 49% of our transfers are instant,
65% were delivered in under one hour and 88%
in under 24 hours.
Average price over time (%)
20/Q1 20/Q2 20/Q3 20/Q4 21/Q1 21/Q2 21/Q3 21/Q4 22/Q1
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.61
Time for money transfers to arrive (%)
0
20
40
60
80
100
18/Q1 Q2 Q3 Q4 19/Q1 Q2 Q3 Q4 20/Q1 Q2
88%
65%
49%
Q3 Q4 2 1/Q1 Q2 Q3 Q4 22/Q1
Instant <1h <24h
Wise Annual Report and Accounts 202212
Strategic Report
Convenience
We’re committed to making Wise available to anyone,
anywhere, any time and on any device. Our infrastructure
enables our customers to send, receive, hold, convert
and spend money in a growing number of currencies,
all in one place with only a few taps or clicks. Transforming
from just a ‘send-money’ functionality into what is now
our Account was driven by our principle of building
a convenient and reliable service for our customers.
Number of countries we can send to
>70
Number of countries we can send to and
receive from
49
Number of countries with debit cards
41
Number of countries with local bank details
10
Transparency
Customers rank transparency as one of the most important
factors for moving money cross-border. But banks and
other service providers continue to hide fees in inflated
exchange rates. Unlocking that informed choice and
getting rid of hidden fees is why Wise was founded
in the first place.
We built a fee comparison table on our homepage,
comparing banks and other providers. Adhering to
our transparency pillar, we tell people when we’re
not the cheapest option, so that they can make an
informed choice.
As noted in the CEO’s statement, this year we have a
real opportunity to change the rules. In the United States,
the Consumer Financial Protection Bureau is looking into
hidden fees. In Europe, the Payment Services Directive
could close the loopholes.
These principles around our mission and our approach
resonate with customers a lot and 66% of our customers
come from word of mouth.
Wise Annual Report and Accounts 2022 13
Our infrastructure
Infrastructure
Our infrastructure underpins everything
Developing the underlying infrastructure to move and manage
money around the world remains a focus and powers all our
products. We believe that our infrastructure gives us a long-term
sustainable competitive advantage. We are focused on increasing
speed and reducing price.
In order to solve the structural problems in the cross-border
payments market, we realised we needed to replace the
outdated correspondent banking system. Our infrastructure
does this by stitching together local payment systems,
eliminating intermediaries and cumbersome manual processes.
Thus removing the high costs, lack of transparency, delays and
inconvenience that are all too common to the correspondent
banking system. We also wrap a slick and efficient verification
and onboarding process over this.
We then partner with local financial institutions to get access
to payment rails. Once we establish our presence, we deepen
our connection by seeking our own regulatory licences, further
integrating with local payment systems and rolling out features
along the way.
This is all carried out in a highly localised manner that is bespoke
to each country, requiring close collaboration with local financial
regulators. The graphic on the next page illustrates our
geographical coverage as set out by the level of local
integration and the type of available features.
Our infrastructure underpins everything.
up to 5 days
Sender’s bank
Recipient’s bank
Thai correspondent
International correspondent
US correspondent
Fee
Fee
Fee
Fee
0-24 hours
Sender’s bank
Recipient’s bank
Wise Thai bank
Wise US bank
Single low transparent fee
Wise banking
transfer model
Conventional banking
transfer model
Wise Annual Report and Accounts 202214
Strategic Report
We’ve got an amazing infrastructure which powers our products…
Our unique
infrastructure
Sophisticated, scalable system
• 6 million lines of Java code in over
400 cloud-based services
• Facilitating over 700k transactions
per day
• 500+ skilled engineers across 70 teams
shipping 100 releases per day
• Proprietary machine learning approach
to fighting financial crime
Portfolio of licences and
regulatory relationships
• 67 licences across 44 countries
(including 30 EEA member states
and 49 US states) enabling us to
operate under the Wise name.
• Proactively engaging with
regulators globally
An extensive network
• Over 50 partnerships with banks
and payment partners
• Direct connection to 5 payment hubs
• Local payment processing
in 88 countries
• MasterCard and Visa card
issuance partnerships
• Cloud based connection with Visa
Highly capable Operations team
• Over 900 customer support agents
split by product and language
• More than 200 payments operators
with local expertise
• 94% of personal document review
is automated
• Our payment delivery estimates were
accurate 80% of the time
A trusted global brand
• Rebranded as Wise in 2021
reflecting a broadening of scope
• 4.5/5 on Trustpilot out
of 100,000 reviews
Two ways – we send
money to and from
One way –
we send money to
…across these locations around the world…
Wise Annual Report and Accounts 2022 15
Total take rate was lower in FY2022 as we made significant
headway on our mission. We reduced our cross-border cost
by 7bps over the period as we engineered away costs, partially
offset by other income during the period.
7.4m customers used Wise in FY2022. Personal customers
grew 24% YoY and business customers 34% YoY.
Customers moved more money, with personal VPCs up 9% YoY
driven by more customers adopting the Wise Account.
Business VPC grew +18% YoY. Similarly to personal, increased
adoption of the Wise Account is leading to higher volumes.
Additionally businesses are moving more money as they
grow with us.
Active customers
7.4m
YoY: 24%
Personal VPC
£8,110
YoY: 9%
Business VPC
£47,731
YoY: 18%
Total take rate
0.73%
We’re now one of the largest standalone money movers.
Total volume was £76bn, +40% YoY. Personal volume growth
was 35% and business 59% YoY.
Total volume
£76.4bn
YoY: 40%
KPIs that help explain our growth
2022
8,110
7,419
7,413
2021
2020
2022
0.24.5
0.35.7
7.0 0.4
Personal Business
2021
2020
2022
47,731
40,374
42,746
2021
2020
2022
0.73
0.77
0.73
2021
2020
2022
19.556.9
12.342.1
33.4 8.3
Personal Business
2021
2020
Key performance indicators.
In addition to the above, specific environmental and employee KPIs are set out in the Environment & social impact section on pages 28 to 33 and
Our people section on pages 22 to 27. See also pages 160 to 161 for the definition and reconciliation of alternative performance measures.
Key performance indicators
The Wise Account is driving volume growth.
Wise Annual Report and Accounts 202216
Strategic Report
Revenue
£559.9m
YoY: 33%
Revenue grew 33% YoY driven by volume growth across both
personal and business customers.
We continued to invest heavily in our future growth whilst
maintaining a healthy EBITDA margin >20%.
Basic EPS grew 3% YoY in FY2022 to 3.40 pence.
We’re bottom line profitable and funding our own growth
and capital generation
Gross profit grew 43% YoY, broadly in line with volume growth,
demonstrating our ability to drop prices for customers while
increasing our ability to invest.
Gross profit
£371.9m
YoY: 43%
Adjusted EBITDA*
£121.4m
YoY: 12%
Earnings per share**
3.40 pence per share
YoY: 3%
Profit before tax
£43.9m
YoY: 7%
Financial KPIs
2022
559.9
421.0
302.7
2021
2020
2022
121.4
108.7
68.4
2021
2020
2022
2021
2020
3.40
3.31**
1.64**
2022
2021
2020
43.9
41.1
20.4
2022
371.9
260.5
188.1
2021
2020
We’re growing fast at scale, and profitable. Our growth is self funded and is translating into sound financial fundamentals.
* To supplement performance assessment, the Group uses alternative performance measures (APMs), which are not defined under IFRS. APMs are
indicated in this document with an asterisk (*); definitions and further details are provided on pages 160 to 161.
** For comparability and consistent presentation, the weighted average number of Ordinary Shares and share options for 2021 and 2020 were determined
on the same basis as the 2022 figures, i.e. as if all shares (common and preference) were redesignated into a single class of A Shares, then each Class A
Shares split into 26 Class A Shares.
Wise Annual Report and Accounts 2022 17
We’re growing
fast, at scale
and profitable.
CFO review
Our mission is to create the best way to move and manage
money around the world. We remain focused on our customers’
needs and solving their problems, whilst building out a
sustainable and valuable business.
In bringing transparency and fairness in how we price our
products, we’ve found a common ground of creating massive
value for our customers and also our shareholders: our Owners.
This model is proving to work very well, and we see no sign
of this changing. Since we became profitable in 2018, we’ve
managed to more than quadruple our volumes and revenues.
And in FY2022 we helped over seven million customers, seeing
the volume they move grow 40% YoY, while generating an
Adjusted EBITDA* margin of circa 22%.
At the same time, we’ve continued to focus as a team on building
solid foundations for the future. Our direct listing in July 2021 saw
us develop processes to help us operate as a public company
that moves billions of pounds for our customers. We are
continuously developing our risk management and controls to
keep our customers’ and shareholders’ money safe and protected
from harm. We also continue to build up our operations with the
necessary controls, testing and monitoring to help us maintain
regulatory compliance everywhere we operate. This is a fast
moving landscape, and no doubt we’ll have areas to focus on, but
we have been putting in place the right governance to make sure
we succeed in the long run. We’ve much more to do still and this
will remain a focus as we grow and scale Wise (as you’ll read in
our risk update).
I’m excited to share this FY2022 update with you all.
Wise Annual Report and Accounts 202218
Strategic Report
Thanks to the
adoption of the
Wise Account,
we do see
customers using
more products,
and sending or
converting more
volume on Wise.
This growth is
evident from the fact
our customers’ deposit
balances grew 83% to
£6.8 billion vs £3.7 billion
in FY2021.
This volume growth has been partially hindered by changing
FX rates causing a headwind. On a fixed FX basis, we saw
VPCs grow 18% (vs 13% using floating rates) and therefore
overall volume grow at 46% on a fixed FX basis (vs 40%
using floating rates).
The volume growth has driven our revenue growth, which
is a function of the volume our customers move and also of
the prices we charge our customers. In FY2022 we generated
£559.9 million of revenue, a 33% increase versus £421.0 million
in FY2021. Revenue from personal customers grew 27% YoY
and revenue from business customers grew 59% YoY.
As some of you will have read in our Mission Updates throughout
the year, we managed to reduce our cross-currency take rate
by 7bps to 0.63% in FY2022 as compared to 0.70% in the prior
year. This was primarily driven by reductions in price that were
enabled by reduced unit costs that we passed on to our customers.
Specifically, this is enabled by lower foreign exchange losses and
reduced spread costs thanks to better risk management and
more favourable terms with our banking partners. With price
reductions being funded in this way we are able to grow the
business and strengthen our market position while generating
a healthy level of gross profit to reinvest into our future.
Cross-border payments and conversions make up the majority
of our revenue. But as we serve customers more broadly,
we’ve seen that our revenue from other products has been
growing faster. We earn fees when customers move money
in their local currencies, spend on their Wise debit card, and
hold their money in our Assets product. Because of this the total
take rate decreased by only 4bps to 0.73% in FY2022 compared
to 0.77% in the prior year, as the contribution to take rate from
other revenues grew from 0.07% in FY2021 to 0.10% in FY2022.
24%
YoY growth in active customers
40%
YoY growth in volume
33%
YoY growth in revenue
Our profitable model
funds significant
investment in our
long-term growth…
and this investment
is paying off.
Our customer focus drives our growth
In the past customers came to us to complete a cross-border
transaction that was fast and at a low cost. It is still what many
customers use our services for, but now more and more people
and businesses are using Wise for more than sending money.
The Wise Account lets consumers and businesses receive money,
hold balances in over 50 currencies, all in one place, and convert
between them instantly. They can also spend anywhere with the
Wise debit card and get bank account details in 10 currencies to
receive money internationally as easily as if they were receiving
money locally.
We earn revenue from our three products: Wise Account
(consumers), Wise Business (businesses) and Wise Platform
(bank and non-bank partners). Our active customers are customers
who’ve made a cross-border payment or conversion in the relevant
period. Consequently, our revenue is a function of (1) the number
of active customers, (2) the volume per active customer, and
(3) the fees we receive (or our take rate, as we call it).
In FY2022, we had 7 million active personal customers and
c. 410,000 active business customers. Both segments are
growing rapidly with personal customers growing at 24%
and business customers growing at 34% over FY2021.
We processed £76.4 billion in cross-border payments in FY2022,
which was a 40% increase over the prior year. We saw volume
from personal customers grow by 35% YoY whilst Business
customer volume grew by 59% YoY.
The volume growth was faster than the growth seen in the
number of customers, driven by the average volume per
customer, which we have seen increasing vs FY2021, which
was in part impacted by the Pandemic. Businesses typically send
larger volumes compared to personal customers and we also see
businesses sending more volume as they grow with us. And since
businesses represent a growing proportion of the total number
of customers, the average volume per customer for the Group is
gradually increasing, reaching £10,300 in FY2022, a 13% increase
over the prior year.
Wise Annual Report and Accounts 2022 19
CFO review continued
How we invest in our growth.
Better
customer
experience
Lower
unit
cost
Invest in
marketing
Invest in
product
and tech
Sustainably
lower
price
More
volume
and scale
More
features
More
customers
CFO review continued
Our pillars of price, speed, convenience and transparency set
our focus. This is what customers ask of us, and it’s also why
they advocate Wise – two thirds of customers join Wise on
recommendation from others. So we believe that if we invest
in these customers’ needs this will result in growth. And as more
customers bring more volume, this leads to a lower unit cost and
more capacity to invest again. So we invest in better products,
lower prices and also in marketing to help spread the word.
Wise Annual Report and Accounts 202220
Strategic Report
Our growth is profitable, and we’re investing for
the future
Whilst we dropped prices, we still generated £371.9 million
of gross profit, a 43% increase on £260.5 million last year
and equivalent to a 66% gross margin (FY2021: 62%), thanks
to the savings in our marginal unit costs mentioned above.
This growth in gross profit, which is in line with our growth
in volume, demonstrates that reductions in price can be
made whilst sustaining our ability to invest.
We invest in three ways to build better customer experiences
that in turn drive more customers, more volume and more scale.
This means we can lower our unit costs even more and still grow
our capacity to reinvest.
We first invest in our product and infrastructure platform.
We invest heavily in our Engineering teams, and in launching
new features and products. This drives a better customer
experience, more referrals, and also lowers our unit costs.
FY2022 saw us acquire a company for the first time. We
successfully completed the acquisition of Vaho Forex Private
Ltd in India, which helps us obtain an Authorised Dealer II licence
and should significantly speed up our growth in the market.
We then also invest in marketing. Although two-thirds of
our customers join us through recommendations, we invest in
marketing to reach new customers, but only if we can achieve
a sustainable payback period. And we invested 30% more
in marketing in FY2022 vs FY2021. This drives more customers
to our platform, which in turn drives more volume and scale,
and again lowers our unit costs.
And of course, we re-invest in sustainably lowering prices for
our customers. This is a long-term investment on the belief that
driving down the cost of international banking, and in turn having
the lowest unit cost, will position us the strongest for the future.
Administrative costs increased 38% to £321.4 million, primarily
due to an increase in employee costs, outsourced services,
marketing and other administrative expenses.
Employee costs increased 31% to £184.8 million as we continued
to build our teams to support growth. We increased the number
of Wisers by c.950 to almost 3,400.
Consultancy and outsourced services increased by 55% to
£42.3 million and other administrative expenses were almost four
times higher at £22.9 million. This increase includes the one-off
listing costs plus an increase in consultancy services related to
stricter compliance standards. The return of travel and office-
based working has also driven an increase in related expenses.
Marketing costs increased 30% to £28.2 million as we have used
additional targeted ways to drive customer growth, beyond our
primary ‘word-of-mouth’ approach. We continue to operate a
disciplined approach to return on investment for marketing.
Capitalisation of intangible assets in FY2022 reduced versus the
prior year by 76% to £4.7 million (vs £19.5 million in FY2021). This
previously announced change does not impact our cash flows
and we continue to expand and invest in our Engineering team.
Our Adjusted EBITDA* margin was 22% for the year
(FY2021: 26%) which corresponds to £121.4 million of Adjusted
EBITDA* (FY2021: £108.7 million) and an 11% increase over the
prior year, reflecting our commitment to investment in future
growth whilst maintaining sustainability.
Profit before tax was £43.9 million compared to £41.1 million last
year, a growth of 7%. This reflects the higher operating expenses
and the investment in our future, the costs of the listing, and
includes a £4.8 million loss on the sale of government bonds in
early 2022. Stock based compensation expense increased 11%
year on year, a total cost of £42.2 million for FY2022.
As at 31 March 2022, we held £7.2 billion of cash and highly liquid
investment grade assets, up 77% from £4.1 billion held at the end
of FY2021. Specifically, this includes £6.8 billion of customer
deposits (£3.7 billion at the end of FY2021), which we keep
safeguarded and readily available for our customers.
This amount also includes £357.8 million of our “own cash”
(£286.1 million at the end of FY2021). We are seeing this cash
balance increasing thanks to the cash-generating qualities of the
business we’ve built. Our FCF* conversion remains high at 93.3%
(95.6% for FY2021) of Adjusted EBITDA* for the year.
We are well capitalised for the future and as at 31 March 2022,
our Group eligible capital of £242.5 million was significantly
above our minimum capital requirements, set by our regulators
around the world.
Outlook
We continue to invest and build for the future. In the medium
term, we continue to expect to deliver revenue growth above
20% (CAGR) and an adjusted EBITDA* margin at or above 20%
as we continue to invest sustainably.
With some positive trends from FY2022 carrying through
to provide a strong start to the next financial year, we expect
revenue to grow by between 30% to 35% in FY2023.
So in summary…
We’re growing fast at scale, and profitable. And our growth
continues to be fuelled today and tomorrow by the products
we’ve been investing in over the past years, supported by the
ability to grow our investments in marketing and underpinned
by building products and features that everyone loves and
continues to recommend. We’re seeing faster growth from
customers adopting more features, which helps to drive
their activity, engagement and volumes they trust us with.
Last year was notable for our listing, but the work we do to
continue to build our business cannot and will not stop. We
have, as to be expected, work to do to continue to develop
our controls, processes and operations so that we can move
money around the world instantly, for everyone.
Our focus on our mission will not change as we continue to
grow and scale, and neither will our focus on building a strong,
sustainable and cash-generating business that is best placed to
address the evolving needs of our customers.
I’m therefore happy to keep saying that we’ve just got started,
and that we have a long way to go. But it is working. Onwards.
Matthew Briers
Chief Financial Officer
28 June 2022
Wise Annual Report and Accounts 2022 21
We’re people without borders.
People are central to the success of Wise.
Our people form the vital connection between our customers
and our products. We’re always innovating and thinking one step
ahead to deliver for our customers, and as a team we are only
as strong as each individual. We believe our current and future
success is dependent on our people.
3,368
people
110+
nationalities
17
countries
For open-minded people.
For idea sharing people.
For what’s next? people.
For break the mould people.
For we’re fixing finance people.
For so long status quo people.
Wise pursues the mission of
money without borders by creating
a culture which is values-driven
and mission-focused.
We invite a diverse range
of talented people to join us,
enriching our culture further
and representing the customers
we serve.
Our people.
Our people
Wise Annual Report and Accounts 2022
Strategic Report
22
It all starts with a values driven culture
Culture is one of the great differentiators which continues
to make Wise what it is today.
Wise has a unique culture that helps harness the talents
of our employees to fuel our long-term success. Our culture
is underpinned by our four core values which guide how work
is done, how employees interact with each other and how they
engage with our customers.
These values underpin the key behaviours which define what
is expected of employees and leaders at Wise. They also operate
as a benchmark for assessing talent in the recruiting process and
for talent management and succession planning.
At Wise, personal growth and impact are built through a
willingness to make a difference in customers’ lives and step
outside of comfort zones. Freedom, autonomy and trust are
baked into our culture, and Wise invests in the growth of its
employees from the point of onboarding through to learning
and development, knowledge sharing and regular 360
degree feedback.
We help sustain and develop our culture with fortnightly
all-hands team calls and the twice yearly Mission Day events
which keeps the team updated and connected with our progress
against the mission.
Underpinning our culture, values and ways of working is our
Code of Conduct. This code, which we updated in Q4 FY2022,
explains how each Wiser’s performance is reviewed, outlining
what conduct employees should expect of each other and how
they should interact with others. At Wise, we expect the highest
standards of behaviour, ethics and integrity, and are dedicated to
creating a culture of delivering to these standards. The Code of
Conduct also incorporates the FCA’s individual Conduct Rules.
These rules set out the baseline level of conduct and good
behaviour expected from a regulated financial institution,
applying to all employees as of August 2018, with the most
recent update completed in June 2021.
• This isn’t a job, we’re a revolution – We’re making
a positive, important change in the world.
• We get it done – We take ownership of what we do.
This thing belongs to all of us.
• Customers > team > ego – We’re working to create a
better world for our customers – that’s the whole point.
• No drama. Good karma – We respect others’ worldviews
and challenge arguments, not individuals.
Wise Annual Report and Accounts 2022 23
Our people continued
A team inspired by a mission
Wisers are motivated by our mission and they tell us this.
Their feedback plays a crucial role in continuing to attract
and retain top talent. We can only tell if we are successful
by asking our people, hence we do this through ‘WiserPulse’ –
our approach for measuring the level of employee engagement.
This enables Wise to gain direct insight from its global workforce
on the Company’s culture, business and leadership, sense
of belonging and approach to ongoing employee initiatives.
Year on year WiserPulse engagement scores have increased
from 74% in 2020 to 78% in 2021, demonstrating the value
of increased communication and other support measures Wise
had put in place. Workforce engagement will continue to be
a key priority for FY2023, with a focus on supporting well-being
and development.
85% of Wise’s employees responded to the survey,
with many scores above our benchmark of technology
peers. For example, our score for whether employees would
recommend Wise as a great place to work and/or are happy
at the Company also increased four points to 78%, in line with
the global tech benchmark (CultureAmp).
Being proud to work for Wise was up three points to 94% and
intention to work at Wise in two years rose five points to 66%.
Core strengths include: people feel they clearly understand how
their team impacts the mission, they are given enough trust
to do their work, and feel that their leads genuinely care
about their wellbeing.
A major driver of the increase in overall engagement was the role
that leaders and managers played over the past year. Trust and
confidence in our leaders and the critical role line managers play
in keeping people informed and caring about the wellbeing of
their team members came to the fore in FY2022.
Engagement is also reflected in the consistently high Glassdoor
rating, currently at 4.2. Additionally, Wise has won a number
of awards including: Fintech employer of the year in Singapore
and recognised as a Best Places to Work in 2022 by the
Glassdoor Employees’ Choice Awards in the UK.
The employee engagement survey also helps identify prospects
for continuous improvement, including recognition and
development programmes, ongoing support for employee
work-life balance and opportunities to improve efficiency.
Wise Annual Report and Accounts 202224
Strategic Report
Wellbeing and safety
Wise believes that when our people are happy, this shows in the
work they do. Our wellbeing programme includes the provision
of flexible working times and locations, personal development
related to work-life balance, as well as family-oriented services.
In order to support wellbeing, Wise’s employees have the
flexibility to work from offices, from home or remotely for
up to 90 days per year. The principle for making this work
is based on trust and is grounded in employees being safe,
able to work from anywhere they need to be, adhering to
local tax and immigration laws, and being empowered to
collaborate and solve problems together.
We support our employees by aiming to provide the best
possible conditions to ensure that they feel good and stay
healthy. Our holistic approach includes people’s physical,
mental, and social well-being.
In order to fully support employees globally, Wise launched
a global minimum leave policy in FY2022 on holiday, parental
leave, and general leave to all employees globally. This policy
change was designed to create a better, more fair, global
standard, where all employees have similar opportunities
to take paid time off and manage their work/life balance,
regardless of where they are based.
Maintaining frequent dialogue in a hybrid working environment is
crucial. Regular surveys helped understand how employees were
feeling during a period of change and uncertainty, and measured
employee engagement and satisfaction. Wise employees are also
offered full access to employee assistance programmes globally.
Wise Annual Report and Accounts 2022 25
Diversity, equity & inclusion (“DEI”)
At Wise, we strongly believe that diversity, equity and inclusion
are key to the success of the Company. In order to achieve
the Wise mission, the best diverse talent is needed to reflect
the diversity of our customers.
To enable this, Wise is committed to building a culture
and working environment in which our people can thrive,
feel comfortable and respected and be themselves at work.
The focus has been on implementing a strategy to embed
inclusive and equitable practices throughout the talent lifecycle,
deepening a culture of inclusion and belonging across Wise and
ensuring employees and resource groups are supported.
Policies, benefits and practices are in place with diversity, equity
and inclusion built into these, to ensure that the people hired
have a voice and are heard, are empowered and productive
in their roles, and that everyone has the support and resources
they need to have the same opportunities as others.
Our people continued
Building and growing the best team
Wise recognises the fundamental importance of ensuring
that the Company attracts, recruits, retains and develops
top global talent to create innovative products and services
for our customers.
Hiring people who care deeply about the Wise mission and
values is fundamental to Wise’s success and growth. As a fast
growing, scaling organisation, in FY2022 we hired almost 1,500
new employees, while also giving opportunities for existing
employees to move and grow within Wise.
Employee development enables a high-performance culture.
To achieve this, we offer employees a wide range of learning
and development opportunities including online learning
resources and interactive learning experiences that are
designed to increase the personal and professional
effectiveness of our employees.
Over FY2022 Wise delivered learning and development
programmes focused on remote working, resilience and
wellbeing, leading and managing distributed teams.
With over 670 leaders across Wise, growing and developing
leaders across the Group has also been a key priority.
This requires robust succession plans and significant
investment with actions including:
• Executive talent and succession review and development
planning involving profiling and coaching.
• Nomination Committee review of proactive plans underway
to support talent, succession and diversity across Wise.
• An extensive set of leadership development experiences
designed for every level of management across
all markets and functions within Wise.
As a part of this investment in leadership, we have also put a
spotlight on connecting Board members and employees through
regular face to face and Company-wide Q&A sessions. Bringing
these populations together to share a clear vision of our business,
now and for the future, is at the heart of our ways of working.
Wise Annual Report and Accounts 202226
Strategic Report
Gender breakdown
as at 31 March 2022
Female Male
Wise overall
1
49% 48%
Senior Leadership Team (SLT) 33% 66%
Senior Leadership positions
2
25% 75%
Senior Managers Certification Regime individuals 44% 56%
Wise plc Board 37.5% 62.5%
1. There are a small number of employees who do not identify as male or female, and those who prefer not to disclose gender identity (<1%), and are not
included in the reported data
2. Defined as individuals who are in Director level roles and above
Wise is working to help raise inclusivity across the wider
technology sector with an initial focus on gender and ethnicity.
For example, 37% of product managers in tech are women,
within Wise this is 43%. Wise is sponsoring female product
trainers through Product School training in order to increase
this number across the industry.
We believe that diverse leadership teams have a competitive
advantage and are drivers of business success. In FY2022,
women accounted for 49% of our global workforce,
and 25% of Senior Leadership positions
3
.
Wise is committed to ensuring equitable representation across
all diversity dimensions in leadership positions, which includes
enhancing our current focus on gender equality.
A prerequisite for increasing the number of women at the
highest levels of management is the general promotion of
women within the Company worldwide at all levels.
We have various initiatives by team in place to ensure that our
succession pipeline is balanced, including coaching or mentoring
of female talent.
To support this work across the Company’s offices and locations,
Wise supports nine employee resource groups (“ERG”) that drive
engagement, champion DEI-related causes and activities and
support our business and talent strategies.
In FY2022, there were nine ERGs with a significant portion
of employees who were members of at least one ERG.
Wise is committed to continuing to build out this programme.
To support an inclusive workplace, and in line with the Code
of Conduct, any form of unlawful discrimination, harassment,
bullying, vilification and/or victimisation will not be tolerated.
Each year, Wise’s Board commits to reviewing and supporting
measurable diversity and inclusion objectives against which
progress is regularly reviewed.
Our goals:
Increase the representation of women in Senior
Leadership positions
2
to at least 40% by 2025
Wise is committed to not only focusing on women in roles
at the Board and Senior Leadership Team (SLT), but also
across Senior Leadership positions. We have committed
to setting a goal to have at least 40% of individuals in
Senior Leadership positions identify as female. Wise has
committed to this externally by signing the Women in
Finance Charter. A key focus for Wise for this particular
group will be on supporting the growth and development
through career progression and growth of internal talent,
through coaching, mentoring and training. In addition,
targeting female hires into senior roles and ensuring
candidate talent pools and interview processes have
at least 50% female representation.
Reach and maintain minimum 40% female
representation in the Senior Leadership Team (SLT)
In line with the review recommendations, Wise has
committed to increasing the representation of women
in the Senior Leadership Team (SLT) to at least 40% by
2024. The Group will achieve this through initiatives that
include developing, growing, coaching and mentoring for
women leaders. Support from employee resource groups
(which focus on inspiring women, tackling racism, and
supporting the Group’s LGBTQ+ community) and attribute
based recruitment processes that are fair, consistent and
have transparent salary ranges for every job.
Reach and maintain minimum 40% female
representation on the Board
With the addition of three new Non-Executive Directors
to the Board in FY2022 (Clare Gilmartin (former CEO of
Trainline), Hooi Ling Tan (co-founder Grab) and Terri
Duhon (NED), Wise meets the Hampton-Alexander
target of 33% with respect to gender representation
on the Board of Directors with currently 37.5% female
representation on the Board. The Hampton-Alexander
Review and Parker Review each place emphasis on the
need to improve representation within the leadership
pipeline. Wise’s approach to the breadth of representation
on the Board and the Senior Leadership Team is set out in
the Composition, succession and evaluation on page 77.
Wise Annual Report and Accounts 2022 27
Environmental & social impact.
Wise was founded with the
belief that more fairness and
transparency was needed
in international payments.
Since then, our mission of Money
without Borders has financially
empowered our millions
of customers.
Environmental & social impact.
People
without
Borders
Delivering for
those who live
global lives and
their communities
Next Gen
Founders
& Tech
Talent
Promoting
entrepreneurship
and technologists
Emission
Zero
Protecting the
planet and
reducing our
footprint
Inclusive
Culture
Attracting and
retraining talent,
supporting diverse
communities
Ethical
Business
Practices
Leading by
example as
mission-driven
and socially
responsible
We also believe our social responsibility extends beyond finance.
We want to do our part to make the world a better place.
Doing right is part of who we are as a company.
That’s why we’ve developed an initiative that we’re
calling Environmental and social impact, which focuses on
sustainability and charitable partnerships. It also covers how we
work and how we’re governed, in line with what other companies
might call Environmental, Social and Governance and Corporate
Social Responsibility.
This initiative is supported by an internal cross-team Advisory
Committee, the Senior Leadership Team (SLT) and the Board.
Our commitment is also backed by a dedicated portion of revenue
invested in environmental and charitable causes every year.
Strategy: Wise has launched an environmental and social impact
strategy to help us reach our mission while looking after our
communities and the environment. This strategy is made up
of 5 pillars that align with our mission. We’ll also describe
throughout this section how these initiatives align with various
United Nations Sustainable Development Goals (“UN SDG”).
Environmental & social impact
Wise Annual Report and Accounts 202228
Strategic Report
Emission Zero is Wise’s response to the climate crisis.
We’ve been carbon neutral since 2020 and are committed
to being net zero by 2030. As many of our customers live global
lives, we’re taking responsibility for the impact we have on the
planet. That’s why we’re sharing what we’re doing to
become a more sustainable business.
Wise’s strategy is to Measure, Reduce and Offset/
Remove. We aim to measure our footprint
as comprehensively as possible, reduce that
footprint as much as possible, and offset and
remove that which we can’t reduce.
Since 2019, Wise has partnered with the
software platform Watershed to provide
a measurement of our carbon footprint,
covering Scopes 1, 2 and 3. We look at our
carbon emissions ranging from employees
(remote working, commuting, and travelling)
to offices (building, expanding, powering) to our
product (cloud servers, debit cards, marketing costs)
and to our partners (vendors and supply chain), among
other contributing factors. In 2021, our carbon footprint was
about 18k tonnes of carbon dioxide emissions. That’s the
equivalent of 16,105 round trip flights between New York City
and London. We know that’s too high, and that’s why we need
to prioritise reduction.
12.5%
Goods & services
Marketing
Cloud
Offices
Travel
Employees
Products
44.3%
17.7%
11.3%
10.4%
7.9%
7.4%
0.9%
Gross emissions by category (January-December 2021)
This pillar and the related initiatives align
with UN SDG 12: Responsible Consumption
and Production
Sustainability
Goal 1
Carbon neutral since 2020
Goal 2
Clean power in offices in 2021
Goal 3
Net zero by 2030
Emission Zero
Wise Annual Report and Accounts 2022 29
Energy usage and greenhouse gas emissions
The table below details Wise’s greenhouse gas emissions and global energy use, in line with the United Kingdom’s Streamlined Energy
and Carbon Reporting (SECR). The sustainability section above highlight’s existing energy efficiency efforts. Emissions from payment
processing are excluded from this data.
Jan-Dec 2021 Jan-Dec 2020
UK and offshore
Global
(excluding UK
and offshore) UK and offshore
Global
(excluding UK
and offshore)
Energy consumption used to calculate emissions 397,011 kWh 1,682,518 kWh 267,796 kWh 1,624,669 kWh
Emissions from sources which are owned or controlled by the Company
including combustion of fuel for transport and operation of facilities (Scope 1) 24.7 tCO₂e 107.2 tCO₂e 18.2 tCO₂e 99.5 tCO₂e
Emissions from purchased electricity, heat, steam and cooling
(Scope 2, location-based) 114.9 tCO₂e 560.4 tCO₂e 73.8 tCO₂e 518.5 tCO₂e
Total gross tCO₂e based on above fields 139.6 tCO₂e 667.6 tCO₂e 92 tCO₂e 618 tCO₂e
Intensity ratio: tCO₂e per £ million of revenue 1.54 1.79
Intensity ratio: tCO₂e per employee 0.31 0.34
Intensity ratio: tCO₂e per £ million of revenue (including Scope 3) (optional) 34.94 30.25
Intensity ratio: tCO₂e per employee (including Scope 3) (optional) 7.0 5.75
Methodology: Emissions were calculated following the GHG Reporting Protocol (Corporate Standard) using the Watershed platform.
Energy usage data was collected or estimated based on building square-footage for all facilities, and was combined with emissions
factors from the US EPA, Ecoinvent, TCR and other data sources to calculate GHG emissions. Electricity emissions factors are chosen
based on geography to reflect the emissions intensities of the facilities’ local grid. Wise’s reported Scope 3 emissions consist of
emissions from purchased goods and services, capital goods, business travel, employee commuting, fuel & energy related activities,
and waste generated in operations.
Environmental & social impact continued
We believe we can reduce our emissions significantly by 2030.
The key areas for reduction that we’ve identified include clean
power for our offices, low carbon office expansions, reducing our
cloud footprint, smarter travel and buying from net zero vendors.
As of 2021, we have obtained renewable energy certificates
representing our energy use in all our offices. When building
or expanding offices, we use low carbon materials, and recycle,
refurbish and reuse office equipment when possible.
We’re reviewing our global recycling programme to ensure
we dispose of materials, including those that are hard to recycle,
in a greener manner. We’re also increasingly starting to work with
key suppliers to understand their environmental impact and help
them reduce their carbon footprint to reduce the emissions from
purchases. This will be particularly critical to our reduction strategy
as 99% of our emissions come from Scope 3. Finally, while we
switched to the cloud two years ago, we also know there are
strategic ways to be more carbon efficient with our cloud usage.
We began offsetting our carbon footprint in 2020 by investing
in a wide range of projects. Initially, the majority of our offsets
went towards avoidance projects – like nitrous oxide destruction,
refrigerant destruction, and forest preservation – which stop
carbon from going into the atmosphere.
Increasingly, Wise is investing in early-stage removal projects
which sequester carbon from the atmosphere and store it
away permanently. In 2020, 20% of our carbon credit purchases
went towards carbon removal. In 2021, it was 25%. We intend to
increase that each year until we achieve net zero emissions over
the next decade. In total, Wise spent approximately £200,000
on carbon offsets and removal projects for 2021. Recent removal
projects we’ve funded include reforestation, biochar, bio-oil
sequestration and electrochemical direct air capture.
These are just the first steps we’re taking as we continue
formulating a longer-term plan.
We have closely looked at the recommendations of the
Task Force on Climate-related Financial Disclosures
and intend to expand our disclosures to align with
them in future Annual Reports.
Wise Annual Report and Accounts 202230
Strategic Report
Social impact & community
As part of our mission is to create a more open world, we have
a responsibility to deliver a positive social impact as a leader
in our industry and the communities we live and work in.
People Without Borders: Our mission of money without borders
has financially empowered millions of people already by making
their lives easier and less stressful, and saving them money.
By improving the global movement of money, we’ve increased
access to financial services with 49% of our transfers now
arriving instantly and with an average fee of 0.61%.
Wise was founded by immigrants, built by immigrants,
and is used by immigrants. This extends from our product
to the causes we support. Wise has been outspoken in its
support of our employee and customer community. That
includes advocating for the Deferred Action for Childhood
Arrivals (DACA) programme in the US to protect young,
undocumented “dreamers” from deportation. Wise has joined
the Coalition for the American Dream and co-signed letters
to the Biden Administration and US Supreme Court in support
of the programme.
We work closely with international bodies like the United Nations,
World Bank, and the Bank for International Settlements on their
efforts to improve cross-border payments and increase financial
access and education in low income countries. That includes
contributing our global payments expertise to efforts to “reduc(e)
remittance costs to 3 percent by 2030”, a target of UN SDG 10.C.
The Wise Platform provides opportunities to help selected
charities receive “fee free” donations from around the world.
Charities face the same problems as everyone else on
international payments. They lose a portion of donations due to
fees and inflated exchange rates. By waiving our fees, we ensure
charities receive every bit of the donation. We’ve partnered with
three global health organisations – Gavi, CEPI, and the United
Nations Foundation – to raise funds for vaccine development
and distribution to low-income countries. When humanitarian
disasters struck Malaysia and the Philippines in late 2021, a team
of local Wisers leveraged the Wise Platform to help raise relief
funds. Though initial volumes have been modest, we’ve built
a potential charitable partnership model that leverages our
product for social good.
When war broke out in Ukraine, Wise similarly waived fees on
transfers to a number of charities (Ukrainian Red Cross Society,
UNHCR, CARE, Save the Children) and temporarily on all
transfers to Ukraine to help customers with emergency needs
in a time of crisis. Wise also made a sizeable donation directly
to the UN Refugee Agency (UNHCR) to assist the millions of
displaced Ukrainians, many of whom became refugees
in new countries.
This pillar and the related initiatives align with
UN SDG 10 – Reduced Inequalities
People without Borders
Wise also donates directly to a number of other charitable
efforts. When a COVID crisis hit India, we donated two months of
from-India revenue to relief and recovery efforts. This supported
recovery efforts in India via our partners ActionAid UK, the
British Asian Trust, CARE International UK, and Save the Children.
These funds went towards initiatives including medical support,
food supply, education funding, and employment retraining.
We also initiated holiday campaigns around Diwali (India) and
Thanksgiving (US) to raise funds for charities like UNICEF and
Feeding America. Along with several education-related causes
described in the next section, we also supported Tonic Housing,
a provider of LGBT+ affirming retirement and wellness
communities in the UK.
Wise Annual Report and Accounts 2022 31
Next Generation Founders & Tech Talent: At Wise, we’re not
just building tech, we’re also committed to supporting tech
education initiatives in our communities. This will help the next
generation of talent thrive by promoting entrepreneurship and
technologists. This starts in Estonia, where we have our biggest
office, where we helped fund the creation of a new coding
school that welcomes students from all backgrounds and aims
to attract more women to study coding. We’ll support students
there and at other academic institutions through mentoring and
workshops. We’ve also partnered with Junior Achievement
Estonia to develop entrepreneurship study materials that can
be used in all schools in Estonia. And we donate used tech
equipment, such as laptops, headsets and monitors, to charities,
coding schools and schools. Additionally, we’re supporting the
Good Deed Foundation’s Education Fund, which aims to improve
public education in Estonia.
Since 2018, the Wise 20 Under 20 competition has sought
the best young entrepreneurs, aged 16-19, across Europe.
The winner(s) receive £25,000 in total prize money,
while all finalists receive mentoring, networking,
and fee-free international transfers for their business.
Inclusive Culture: Money without borders aims to serve a global
community. That means diversity and inclusivity is essential.
That’s why we’re focused on creating a more accessible product
to ensure people with disabilities have full access to our services.
As a mission driven employer, we believe diverse teams build
better products. We know an inclusive culture will help ensure all
Wisers feel valued and empowered. We know we still have more
progress to make, but we’ve made a genuine commitment to
prioritising diversity, equity and inclusion. Diversity, in particular,
has been a top priority for the Board and the Company during
this past year. Read about this and related initiatives in greater
length above in the Our people section on pages 22 to 27.
Consistent with the way we work, we empower Wisers to solve
problems when they see solutions. This includes an annual paid
volunteer day for every employee to make a positive impact in
their local communities. And, we provide additional volunteer
and community opportunities when our Company comes
together every year at ‘Wise Days’.
Environmental & social Impact continued
Next Gen Founders
& Tech Talent
This pillar and the related initiatives align with
UN SDG 4: Quality Education
Inclusive Culture
This pillar and the related initiatives
align with UN SDG 8: Decent Work
and Economic Growth and UN
SDG 5: Gender Equality
Strategic Report
Wise Annual Report and Accounts 202232
Ethical Business Practices: Wise was founded to fix the broken
system of international payments. Ensuring customers are
treated fairly and transparently defines who we are as a company.
This is critical to every aspect of our business. We must remain
a highly ethical and socially responsible company if we hope
to accomplish our mission.
This extends to how we operate and how we’re governed.
We’ve put in place protections and alerts to reduce the risk
of our customers falling victim to fraud and scams. We must
ensure customer funds and assets are invested fairly and ethically.
And, we must be transparent with how we use and share data.
We’ve also created a new internal Advisory Committee to keep
Wisers from across the Company engaged on environmental
and social impact initiatives. This will provide accountability
and oversight, while ensuring Company-wide support and
engagement. We’ll also soon start the process of hiring someone
fully dedicated to these responsibilities and must ensure regular
updates are provided up through the Board. This will help
maintain a continued commitment to these efforts within
Wise, on our leadership team, and on the Board.
Additional commitments
Fairness and transparency extends to all aspects of our
business. As part of operating in a highly ethical manner,
Wise has clear policies in place in relation to:
• Our employees and partners: We set the bar high for the
work we do and the way we behave. In 2021, a dedicated
employee working group reviewed and updated our Code
of Conduct – which the Board approved – to help guide all
our employees about what is expected of those working at
Wise, and how we care about them. It’s made up of three
important pillars – how we look after each other, our
customers and Wise overall. We strongly believe in
empowering our employees to speak out about anything
that makes them feel uncomfortable, so that they know
how to raise any issues in a safe and confidential way.
We also expect all our employees, those acting on our
behalf, and our partners to share this commitment and act
with integrity at all times. This is a commitment made clearly
in our anti-bribery and corruption (ABC) and whistleblowing
policies. Our ABC policy clearly defines our position on
bribery and corruption and provides guidance on how to
recognise and respond to it, while our whistleblowing policy
details how we react to such complaints.
• Our customers: We provide our customers with an
acceptable use policy to mitigate the risk that our services
are used for any unlawful or unethical purposes.
That includes anti-money laundering and counter-terrorism
financing policies, strict controls, and a commitment to data
and privacy regulations. Violations of our acceptable use
policy may result in suspension or termination.
• Human rights: We believe all aspects of our business
should be conducted in an honest and ethical manner.
We take a zero-tolerance approach to slavery and human
trafficking, and bribery and corruption. We aim to ensure
these standards through due diligence on material new
partners, reassessment of existing material suppliers,
employee training on Code of Conduct and whistleblowing
procedures, and Board-approved policies related to
modern slavery.
The adoption of the UK Corporate Governance Code
will support our approach to governance of environmental
matters. The Board will also receive at least annual progress
and strategy updates. And our internal Advisory Committee
will provide additional oversight and accountability
of our efforts.
Wise also remains conscious that there are a number
of ESI risks that could present challenging circumstances
and adverse impact to the business, our employees, and our
customers. We already consider environmental and societal
risks as part of our broader strategic risk framework within
the risk taxonomy. More detail on our principal risks on
pages 42 to 49.
This pillar and the related initiatives align
with UN SDG 16: Peace, Justice and Strong
Institutions
Ethical Business
Practices
Wise Annual Report and Accounts 2022 33
Section 172(1) statement.
The relationship between the Wise Group and its stakeholders is
fundamental to the strategy, purpose and values of our business
and drives our decision-making. In 2021, Wise became a public
company, balancing the needs and expectations of all
stakeholders in the process.
The Board is required by section 172(1) of the Companies Act
2006 to act in a way that would be most likely to promote the
long-term success of the Company and take into account all
of Wise’s stakeholders in its decision-making.
The following pages comprise our Section 172(1) statement,
setting out how the Board has, in performing its duties over the
course of the year, had regard to the matters set out in Section
172(1) (a) to (f) of the Companies Act 2006, alongside examples
of how each of our key stakeholders have been considered and
engaged. Further information can also be found throughout
the Strategic Report on pages 1 to 53 and in our exploration
of key strategic decisions made in the Corporate Governance
Report on pages 71 to 73.
We have identified our
key stakeholders to be:
Customers
Employees
Governments and regulators
Wise Owners
Communities
Suppliers
The Board directly and indirectly (through
the Senior Leadership Team (SLT) and
others delegated by the Board) sought
to understand the interests and priorities
of these stakeholders.
Our stakeholders and section 172 statement
Wise Annual Report and Accounts 2022
Strategic Report
34
Stakeholder engagement
& considerations.
How do we engage?
• We actively encourage customer feedback and customers
are regularly invited to share their thoughts through a wide
range of research methodologies (surveys, interviews, focus
groups etc.). These invaluable insights are used by our teams
to build new products and features, and improve the overall
customer experience.
• We keep our customers updated on the progress of our work
through a series of communications that inform and educate
them about how to use the most relevant products for them.
Our most engaged customers are invited to try our new
products and features before the official release. This helps
us ensure what we build solves our customers’ problems.
Once the new products and features are ready, we inform
all relevant customers, helping them understand how
to make the most of the new releases with a series of
educational communications.
• Each quarter we share a quarterly Mission Update, and each
month we share price changes communications, updating
customers on our overall progress on the four pillars of
our mission: price, speed, convenience and transparency.
• We invite selected customers to in-person events such as our
Mission Days, where they can and see our plans to improve
our products and services and share feedback.
• We provide customers with 24/7 customer support via web
chat, email and telephone support and we also have an online
help centre with the answers to 1,000s of FAQs.
How has the Board taken customer interests
into account?
The Board supports our strategy to keep transfer pricing low
and transfer speeds fast, with the average price per transfer now
0.61%, and with 49% of all payments being made instantly.
• The Board approved the Customer Share Giveaway, which was
launched prior to admission to the London Stock Exchange.
This gave customers the opportunity to participate in the
listing, giving them a voice as owners of the Company.
• The Board approved OwnWise, a programme that allows
customers to acquire shares and potential bonus shares. This
increased customer advocacy, by giving our customers a sense
of ownership in Wise and also brings the voice of customers
into the shareholder base, building on what we achieved with
the Customer Share Giveaway.
• The Board regularly reviews operational metrics to gauge KPIs
such as the health of customer service queues. The Board, via
the Audit and Risk Committee, also oversees the risk control
environment to ensure that customers are protected and that
Wise maintains a strong capital and liquidity position.
Customers
Why are they important?
Customers are at the heart of everything we do at
Wise; we aim to solve real problems for people and
businesses. We do this through focusing on building
products that make moving and managing money
across borders faster, easier, cheaper and more
transparent for everyone, everywhere. During this year
we dropped prices, sped up payments, and expanded
access to our products and features in more countries
and through more partners.
What are their key priorities?
Our diverse range of customers all have their own
individual needs. Our key customer priorities include:
• convenience of use;
• sensible pricing;
• speedy transactions; and
• business transparency.
Wise Annual Report and Accounts 2022 35
• We have made a significant investment in leadership coaching
and employee training, including the launch of the internal
‘Coaching and Mentoring programme’ and ‘Leadership
Development programme’ during FY2022.
• Health and safety assessments are regularly undertaken
to ensure the safety and well-being of employees.
• We have hired an independent whistleblowing service, which
allows employees to raise relevant concerns confidentially.
• We have introduced a hybrid way of working, allowing
employees the flexibility to work from home, in the office
and temporarily outside their country or state of employment.
• We offer an employee assistance programme, an independent,
confidential service to support employees with work and
non-work related matters.
• We ensured that employees were provided with the
necessary equipment to allow for effective home working
during the pandemic.
Further details on how we engage with our employees can be
found in the Our people section on page 22.
How has the Board taken employee interests
into account?
• The Board received updates on employee-related matters
to ensure continued oversight of culture, colleague wellbeing
and the results of the annual engagement and inclusion survey.
• The Board approved the whistleblowing policy, providing an
independent and safe way for employees to raise concerns.
• The Board reviewed and approved updates to the Code
|of Conduct, which now better reflects our inclusive culture
and prioritisation of creating a safe working environment.
• The Board reviewed resourcing issues in key assurance teams,
following the departure of a number of key members of the
People, Risk, Finance and Legal teams. The Board commenced
a review to determine if there was a common root cause.
In doing so it determined that more effective onboarding
for these teams, and more vocal support for their work,
was required from the CEO and Senior Leadership Team (SLT).
The Board also engaged with the Senior Leadership Team
(SLT) on a search for a new People lead.
• The Board was provided with updates on key commitments to
DEI objectives, such as increasing females in senior leadership
positions, increasing females in engineering roles and the
voluntary collection of DEI data.
• The Board, via the Remuneration Committee, monitored
stock pool utilisation to ensure that there are appropriate
levels of stock and restricted share units for our employees.
• The Board recognised the importance of engaging with
the workforce directly and throughout the year the Board
attended a number of virtual and in person events with the
workforce at Wise. A number of the Directors also attended
Mission Days, either in-person or virtually.
The Board considers the current workforce engagement
approach to be effective as it allows for flexibility and direct
engagement. However in the next financial year it intends
to agree a calendar of engagement activities for all NEDs
with a more regional focus, reflecting the geographical
spread of both the Directors and the Company’s workforce.
Further details on our compliance with the UK CGC can be
found in the Corporate Governance Report on pages 63 to 70.
Employees
Why are they important?
We can’t operate and achieve our mission without
dedicated and talented colleagues who feel
appreciated and motivated to deliver for our
customers and the business.
What are their key priorities?
We work hard to understand how our colleagues feel
about Wise as an employer, both as a place to work
and as a business. Our employee engagement survey
reveals that the following are important priorities:
• feeling valued and appropriately rewarded;
• health, safety and wellbeing in the workplace;
• having an inclusive and diverse workplace with
a respectful company culture; and
• being able to share their views and have a say
in decision making.
Our stakeholders and section 172 statement continued
How do we engage?
• We maintain an open, transparent culture. This includes
fortnightly all Company team call meetings and twice yearly
“Mission Update” conferences, which are attended by all
employees and some members of the Board, and are led
by the Senior Leadership Team (SLT).
• We make sure all employees have a chance to provide
feedback through our annual WiserPulse employee
engagement survey.
• We use open career maps to transparently communicate
roles and salary ranges at Wise, which increases clarity
on expectations and helps our people know how they
can progress in their team. They also help us evaluate
impact and pay our people consistently and fairly.
• We provide employee resource groups, which are supportive
forums for underrepresented employee groups. These forums
are often attended by Senior Leadership Team (SLT) members
to show their support.
Wise Annual Report and Accounts 202236
Strategic Report
How do we engage?
• We provide comprehensive updates to the market at half
and full year, along with condensed trading statements
at Q1 and Q3. The results presentation and Q&A with
management provide our investors with clear guidance
on our capital planning priorities alongside strategic updates
and financial results.
• Our Owner Relations team, alongside the Chair and senior
management, also maintain regular dialogue with institutional
investors, both existing and prospective, and the meetings
with these investors represented the vast majority of the
issued share capital.
• In 2021, Wise initiated the OwnWise programme, through
which we invited long-term customers to become Owners.
We did so because customers understand the problems we’re
trying to solve and we believe it is only natural they should
have a say in how Wise is built and run.
• Throughout the year our Board and Committee Chairs make
themselves available for engagement with shareholders via
the Investor Relations and Company Secretarial team.
• In September 2022 we will hold our first AGM. We plan to
hold our AGM as a hybrid meeting to ensure we engage with
as many Owners as possible, not just those with the means and
availability to physically meet in person.
How has the Board taken Owner interests’
into account?
• The Board received regular updates from our Investor
Relations team, on market trends, activity and sentiment.
• The Audit and Risk Committee oversees internal and external
audit processes and risk management to ensure an appropriate
framework is in place to protect Owner investments,
and that financial statements provide an accurate,
fair and balanced view.
• The Board approved the adoption of the UK CGC, which
ensures the appropriate checks and balances in place
between the Board and management and that Owner
interests are protected.
• The Board supported the decision not to pay a dividend in this
financial year. It was considered more beneficial for Owners for
Wise to re-invest our capital into growth and therefore support
the long-term success of the business.
• Prior to the listing our Executive Directors and Investor
Relations team went on an investor roadshow and met
with current and potential investors to explain the
business and the listing and to get their feedback.
Wise Owners
Why are they important?
Securing our Owners’ trust through continuous,
transparent engagement ensures their ongoing
support and investment. In a transformational year
for the business, it has been more important than ever
to engage with our investor community to share our
vision for the future and understand their questions
and concerns.
What are their key priorities?
It is important that our Owners understand our strategy
and the regulatory and economic environment in which
we are operating.
We believe that our investor base is currently
focused on:
• implementation of ‘Mission Zero’ and progress
made against it;
• delivery of sustainable, profitable growth over
both the short and the long-term;
• implementation of proactive and conscientious
‘ESG’ plans and corresponding performance
in Environmental, Social and Corporate
Governance areas;
• Executive remuneration; and
• independence and diversity on the Board.
Wise Annual Report and Accounts 2022 37
How do we engage?
During FY2022 we continued to engage with our local
communities by:
• Expanding our money transfer services to 7.4m customers.
We also increased the amount of payments delivered instantly
from 36% to 49% and lowered costs from 0.69% to 0.61%.
The continued scale of Wise’s services enhances financial
inclusion around the world.
• Continuing our environmental sustainability efforts by
conducting a comprehensive measurement of our carbon
footprint. We also took steps to reduce that footprint by
switching to clean power in all our offices and using low
carbon materials when building or expanding offices.
We also continued offsetting our carbon footprint, and
increased the amount that went towards carbon removal.
• Providing charitable donations to support tech education
initiatives in Estonia, COVID-19 relief in India, and the LGBTQ+
community in London, among others.
• Leveraging the Wise platform to facilitate fee-free donations
from around the world to three global health organisations
funding vaccine development and distribution to low-income
countries, and to humanitarian efforts when disasters struck
in Malaysia and the Philippines.
• Waiving fees on transfers to Ukraine in the immediate
aftermath of conflict breaking out, to help customers with
emergency needs in a time of crisis.
• Partnering with the international community, including
the United Nations and World Bank, by lending our expertise
as they seek to improve cross-border payments and lower
the costs of remittances.
• Sponsoring Wise’s 20 under 20 competition, which seeks
to identify the best young entrepreneurs, aged 16-19, across
Europe. The winner(s) receive prize money, while all finalists
receive mentoring, networking, and fee-free international
transfers for their business.
How has the Board taken community interests’
into account?
• The Board approved Wise’s environmental and social impact
(ESI) strategy, which will help us reach our mission while
looking after our communities and the environment,
and the launch of our internal ESI Advisory Committee
to ensure continued engagement across various teams
to drive related initiatives.
• The Board supports market expansion, including
expansion to markets with significant unbanked
and underbanked populations.
Communities
Why are they important?
Community acceptance is an essential part of having
permission and licences to operate in communities.
In addition, Wise seeks to ensure that we are a force
for good for the people and places we impact.
We are proud to be an integral part of the
communities we serve.
What are their key priorities?
We understand that having a safe and friendly service
for international and local money transfers is important
to the communities we serve.
We believe our communities’ key priorities are:
• increased access to financial services;
• financial empowerment;
• social responsibility; and
• environmental sustainability.
Our stakeholders and section 172 statement continued
Wise Annual Report and Accounts 202238
Strategic Report
How do we engage?
• We have third party risk management processes in place for
the onboarding of our key vendors. These processes aim to
identify, manage and remediate risk that arises out of our
relationships with suppliers. This includes carrying out due
diligence on new suppliers, covering privacy, security, financial,
and compliance matters and an assessment as to whether the
supplier or its supplier chain has a heightened risk of modern
slavery. We reassess our critical suppliers on a periodic basis
to ensure they continue to be the best fit for our business
and our customers.
How has the Board taken supplier interests
into account?
• Relationships with our suppliers are subject to a number of
governance controls implemented by the Group, including
delegation of authority, third party risk management, related
parties policy and Enterprise Risk Management Framework
policies. These improve the efficiency of how we interact with
our suppliers but also make Wise a more co-operative, reliable
and stable partner.
• The Board reviews the actions we have taken to prevent
modern slavery and associated practices in any part of our
supply chain and approves our Modern Slavery Statement
each year.
• We have improved our payment processes to ensure our
suppliers are paid more efficiently and on time.
Suppliers
Why are they important?
Our suppliers support us in a wide range of activities
including recruitment, compliance, marketing,
technology, card production, facilities management
and banking. We also have relationships with and
connections to central banks and payment infrastructures.
It is vital to build and maintain productive relationships
with our suppliers and third parties to efficiently run our
business, provide customers with high quality service,
and help us to get to Mission Zero.
What are their key priorities?
Maintenance of long-term, productive relationships
is critical to both our suppliers and to the Company.
Wise Annual Report and Accounts 2022 39
How do we engage?
We maintain close relationships with our regulators and relevant
governmental agencies. For example:
• Our Compliance teams in each regulated entity engage
directly with regulators and provide reports on key topics
and themes to our subsidiary and Group board members.
• Our Policy and Government Relations team works closely
with governments around the world, including regulators
and policymakers at the local, national, regional and global
levels. Our engagement and relationship building is intended
to better the priorities of policymakers, while offering
our perspectives and expertise, especially as governments
seek to improve cross-border payments and modernise
payments systems.
How has the Board taken government and
regulator interests’ into account?
• The Board has been focused on the development of the three
lines of defence model, to ensure appropriate control and
mitigation of our key risks.
• The Board engaged constructively with our regulators during
2021 throughout the listing process and beyond and will
continue this engagement across upcoming changes to the
regulatory landscape. For example, our Group CEO met with
our supervisory teams at the Financial Conduct Authority
(FCA) and the National Bank of Belgium in 2021, and our Chair
met with our supervisory team at the FCA on 1 April 2022.
The Board, via the Audit and Risk Committee, receives regular
updates on key regulator matters including data protection,
privacy and the global regulatory environment.
Government and regulators
Why are they important?
The regulatory environment is critical to the
success of our business. We believe it is important
to maintain positive relationships with regulators.
We also work closely with governments to share our
perspectives and global payments expertise to assist
policymakers as they seek to improve and modernise
cross-border payments.
We are subject to financial services regulations and
approvals in the markets we operate in and ensuring
our compliance with these regulations and approvals
furthers our goal of putting our customers at the heart
of everything we do. Feedback from the FCA and
overseas regulators is regularly considered by the
Board and helps inform decision-making by Directors.
What are their key priorities?
The priorities of our regulators and the governmental
agencies responsible for policy development
include the following, which are closely aligned
to Wise’s mission:
• Customer protection.
• Enhancing the resilience of the financial system.
• Prevention of financial crime.
• Promotion of competition.
Our stakeholders and section 172 statement continued
Wise Annual Report and Accounts 202240
Strategic Report
The risks we face at Wise.
In order to build and operate the products required to achieve
our mission, we will continue to take and manage risks.
Recognising that we have grown quickly, we are now in a process
of formalising our risk management strategy such that we
identify, quantify, manage or accept risk appropriately for our
size and all our stakeholders today. The challenge is in identifying
these and managing them so they don’t slow our progress by
causing our customers, our shareholders or the wider market
unreasonable harm.
Overall approach to risk
As a global financial service provider, we have put in place an
Enterprise Risk Management Framework to help us identify,
manage, report and govern our risks, and we have organised
around a three lines of defence model to help operate this
effectively within the business. FY2022 saw us make significant
steps forward from a risk management perspective with
decisions increasingly impacted by considering the risks
we face as a business.
The framework helps guide us and continuously improve how
we manage our risks. The key elements of our framework are
as follows:
Risk as part of our strategy: To protect us and manage this,
we aim to take risks consciously, we aim to proactively
assess and manage risk at every stage in our business, from
strategy development through to product launch and ongoing
operations. We agree that we will classify the risks that can harm
our business and our customers and we will build mechanisms
to manage and reduce these where necessary.
1
st
Line
The business
1
2
3
Senior Leadership Team (SLT)
Accountable to ensure there are governance
structures, and policies, that drive and
measure the Group-wide risk philosophy.
They have oversight as the ultimate body
for risk, control and compliance.
Teams/Tribes
Identify, assess and mitigate risks as well
as set controls within their areas, defining
operational procedures and executing
compliance activity.
Wisers
Embed risk and compliance requirements
into decisions, with a conscious and
deliberate approach to risk, compliance
and actions for remediation.
Legal
Provides first-line legal advice to the teams to enable them to effectively manage their risks
and remain compliant.
Risk team
Defines Company-wide risk framework,
and supports the Leadership team in defining
the overall risk appetite for the business.
Oversees and monitors risk management
across the business – challenging the
business on risk management practices,
including controls and mitigants.
Compliance team
Defines overall Company compliance policy
framework and assigns ownership for
policy areas.
Provides assurance that the business is
compliant with all policies and procedures,
and operates critical cross-team
compliance policies.
Risk and Compliance teams
Internal Audit
Internal Audit provides independent
and objective assurance of the effectiveness
of risk management, control and
governance processes of the Group.
2
nd
Line
Standard setters,
risk and compliance
advisers and oversight
providers
3
rd
Line
Independent assurance
providers
Risk culture: Embedding and cultivating a culture of risk
awareness is central to our strategy, and we seek to make it clear
where managing risk is central to a team’s or individual’s role.
In doing so we entrust our people to do the right thing for our
customers and for Wise from a risk standpoint.
Risk appetite: Once risks are identified and understood,
we set a clear structure of monitoring around our main risks
and establish key risk thresholds on a risk by risk basis which
we will not tolerate exceeding.
Risk governance: To ensure that decisions are made not only
with the right information but in the right way and by the
appropriate people, we have an infrastructure for risk
governance. We are improving here as we grow and scale
and risk management increasingly acts as a cornerstone of how
we take decisions and is a central factor in how our business
is performing and growing.
Risk management: We have and will continue to build tools
which aim to help our people to identify, assess, manage,
and treat risks on a day to day basis.
Three lines of defence
Wise has adopted a system of risk management and internal
control based on the three lines of defence model. First line
teams own and manage risk, second line risk and compliance
teams provide oversight, and the third line Internal Audit team
provides independent assurance. We have continued to embed
this model throughout the organisation in FY2022 and will
continue to focus on this through the coming years.
Risk management
Wise Annual Report and Accounts 2022 41
Principal risks.
The Board through the Audit and Risk Committee has carried out a robust assessment of the principal and emerging risks.
The description of the risks and mitigation are described in details below.
Principal risks are those that we focus on as a business. These risks typically come about due to the fundamental nature and scope
of our business model. To manage these we already have mitigations and controls in place. But of course as we scale there is room
and need for improvement. We saw progress in many areas in FY2022, as we’ve continued to focus on developing and formalising our
approach to risk management, alongside embedding the three lines of defence model.
Principal risks
Risk Mitigation Development in FY2022
Regulatory compliance
Regulatory compliance risks are
risks occurring from failing to fulfil
applicable compliance regulations
in full.
Specifically, Wise is exposed to
regulatory risk via its engagement
in the markets in which it operates.
These regulations cover a wide range
of topics, but include how we govern
our business, how we safeguard our
customers’ funds, how we embed
consumer protection laws into our
products, and how we capitalise and
provide liquidity for our business to
protect against shocks and impacts
from materialisation of certain risks.
A key risk also arises from the way
regulation can and will inevitably
change in regards to both
payments and e-commerce
across multiple jurisdictions.
In the event regulatory risks fully
materialise they could result in
regulatory penalties, impede our ability
to maintain licences and/or expand
market offerings. Along with this,
any enforcement actions could impact
our reputation, customer confidence,
pricing, and our partnerships with
other financial institutions.
The responsibilities for these risks
reside with the first line, subject
to ongoing support from the
second line Compliance team,
as we continue to build out the
three lines of defence model.
Regulatory risks are firstly identified,
monitored and mitigated by our Compliance
team, with further accountability for
mitigating the risk shared with the product
and compliance leads with local subject
matter expertise.
Specifically, this risk is addressed and
managed by:
• Ownership and implementation
of relevant regulatory and financial
crime policies
• Design, operation, monitoring and testing
of compliance controls
• Sourcing of compliance advisory support
to Wise
We have set and communicated a risk
appetite which states that we have no
tolerance for wilful violations of regulatory
requirements and that we should abide by
fair and responsible practices.
Requests for information from regulatory
bodies remains consistently high and will
likely increase as Wise’s scale, footprint
and profile continue to grow.
Wise satisfies such requests through
the provision of information and materials
in a timely manner, and provides
clarifications promptly when asked.
However, Wise acknowledges that, through
our business operations and growth plans,
and in the context of operating in multiple
jurisdictions with differing regulatory
requirements, there will be occurrences
where we are not fully compliant with all
regulations. Currently, this risk is increased
in our regulatory programmes related
to safeguarding and financial crime.
We mitigate this risk through continuous
evaluation of our policies and procedures,
and implementing remediation programmes
where necessary to close identified gaps.
Outside of this, we proactively engage with
regulators within our operating markets
where possible to ensure we transparently
discuss our expanding risk environments,
as a natural by-product of our growth,
and address ongoing remediation
programmes as described above.
A key control implemented to mitigate risk
during the past year, was the establishment
of a robust Monitoring and Testing team
within Compliance. This control team
enables regional expert knowledge of local
regulations to formally test the operating
effectiveness of controls and escalate any
issues requiring remediation.
In addition, Internal Audit conducted
independent reviews of our regulatory
compliance programmes and helped
identify specific aspects for improvement
in areas such safeguarding, how we govern
and capitalise our regulated entities,
and our financial crime programme across
the material entities within the Group
(see below).
As such, the increased monitoring
has enabled us to identify key control
improvement opportunities, so that
we can proactively fix and, where
appropriate, have open discussions
with the relevant regulators.
This area remains a focus for the team
and the ARC given the business criticality
and evolving nature of the regulatory
environments that we operate in.
Risk management continued
Wise Annual Report and Accounts 202242
Strategic Report
Risk Mitigation Development in FY2022
Financial crime
Money laundering risks are the risk
of customers using Wise’s services
for money laundering/financial crime
activity. The associated risk is also
of Wise failing to comply with anti-
money laundering (AML) regulations.
The risk is further complicated
due to the ever evolving criminal
activities coupled with increasing
and geographically varying regulatory
requirements to identify, escalate, and
mitigate these risks. All of these factors
create significant operational burdens
on Wise. Part of these emerging risks
include changes in sanction screening,
emerging money laundering trends,
and sophisticated fraud scenarios.
This risk is particularly significant to
Wise due to the speed, convenience,
and nature of the payment services
Wise provides its customers. These
service features may attract potential
criminal elements who try to exploit
our services for personal gain.
If the financial crime risk materialises
it can increase our regulatory risks
and negatively impact our reputation
within industry and with our customers.
Wise recognises its responsibilities in
protecting its customers and markets from
illegal activity that harms societies across
the world.
Wise deploys a multifaceted approach
to identify and mitigate the risk of financial
crime activity occurring through our
platform. Key among these are our:
• transaction monitoring (dynamic rules
that monitor the transactions entering
and exiting the Wise platform);
• customer due diligence (measure
to ensure we know who our customers
are and how they utilise our services);
• sanctions screening (ensures that
prospective and existing users
of Wise’s platform are not subject
to a government sanction);
• additional risk based controls
(heightened measures that are
automatically enacted based on
a customer’s unique risk profile); and
• training programmes for all
Wise employees.
Further, Wise actively engage across
multiple National Financial Crime
Intelligence Units and regulatory partners
to ensure our control environments are
in line with best practices and address
emerging trends.
Wise continue to enhance our financial
crime risk management capabilities through:
• investing in advanced analytics and
artificial intelligence to strengthen our
transactions monitoring programme;
• monitoring geopolitical developments
closely and the impacts on our financial
crime controls;
• strengthening and investing in our fraud
controls, to introduce next generation
anti-fraud capabilities to protect both
our customers and Wise;
• implementing a second line monitoring
and testing function, focussed on
continuous feedback on risk mitigation
and scalability of our controls; and
• conducting a global review of our
programme by Internal Audit to provide
holistic feedback on our compliance
and control framework.
Our financial crime risks will continue
to increase as:
• Wise’s brand and market continue
to expand, which unintentionally
attracts potential criminal actors
to our products; and
• Wise seeks to build global solutions
in an ever changing regulatory
landscape, which may result in
short-term regulatory inconsistencies.
As such, whilst the risk of financial
crime increased this year, the improved
identification and mitigation measures
helped prevent material impact on our
business model.
Wise Annual Report and Accounts 2022 43
Risk Mitigation Development in FY2022
IT system (IT general controls)
The specific risk here relates to
potential misappropriation of assets or
misstatement of financial statements
as a result of inadequate controls
over our internal systems (IT general
controls, ITGCs). Specifically, the risk
that we may not prevent or detect
unauthorised access, use of or
change to data or systems.
We are committed to investing in the
reliability and resilience of our IT systems.
We do so to ensure we can continue
to deliver our product and protect our
customers from disruption to our services.
We manages our systems through a shared
accountability model between product
engineering, platform infrastructure and
security teams.
We focus heavily on continuously improving
our system resilience and how products are
developed, delivered and maintained to
provide stable and secure services.
We have established a change management
process that enforces accountability for
using secure coding standards, testing and
approval of changes before we launch new
features or products.
We have an identity and access
management programme that ensures
access to Wise systems is granted
in a controlled manner and to users
who require it.
We have automated controls in place to
enforce segregation of duties within select
higher risk processes and have detective
monitoring mechanisms to identify if a
user has used their access to perform
unauthorised activities.
Our ITGC control framework has matured
significantly over the course of FY2022,
with continued focus in FY2023 to further
develop and embed these controls,
to reduce related risk:
• Enhancing security measures within our
product change lifecycle, improving
testing and approval controls.
• Reviewing and redesigning identity
and access management processes,
specifically related to provisioning and
recertification of user access across key
systems and underlying infrastructure.
Where excessive rights have been
identified, comprehensive reviews are
being performed to determine if access
had been misused during the period.
• Implementing additional measures
to enforce robust segregation of duties,
through automated controls where
possible, to reduce the risk of error
or fraud.
• Implementing additional monitoring
processes to identify unauthorised
or potentially suspicious activities
within our applications.
• Improving our threat management
capabilities and ongoing
monitoring processes.
Our efforts will continue in FY2023 to further
reduce sensitive access privileges and
evolve the monitoring processes to identify
unauthorised or potentially suspicious
activities across the key systems.
Management has undertaken detailed
substantive testing as described in the
section on Fraud Risk described below
to provide additional comfort that these
control weaknesses were not exploited.
We are committed to taking a proactive
approach to mature our IT control
environment, with a focus on mitigating
the risk of errors or fraud whilst driving
accountability within our teams to
manage a robust control framework.
Risk management continued
Wise Annual Report and Accounts 202244
Strategic Report
Risk Mitigation Development in FY2022
Market
Market risk is the risk that
the value of an investment
or other assets decreases,
or the value of liabilities
increases due to moves
in market factors.
Wise is most significantly
exposed to market risk in
relation to fluctuations in
FX-rates and interest rates.
Any material changes to those
risks could result in financial
losses, and/or price increases
in order to fund higher levels
of risk (for example during
periods of volatility). So our
ability to manage down the
costs of these risks has a direct
linkage to our ability to reduce
prices and offer better services
to customers.
To understand and manage our market
risks and the impact these have on our
business, we set FX risk appetite using a
maximum one day expected loss model
and absolute currency positions. We use
dynamic FX hedging throughout the day
and can also set product limits. Where
we cannot hedge a currency directly
we will hedge with other currencies.
For both FX and interest rate risk, we set
risk thresholds and appetites which help
us monitor how much risk we are taking.
If our level of risk surpasses a threshold,
this needs escalation and we have
defined specific management actions.
If we approach our risk appetite, we have
the ability to stop certain flows to avoid
excessive risks.
Early in the financial year we were able to drop prices
for customers specifically as a result of reduced levels
of FX volatility. This showed a reduction in FX related
market risk following the key months during
the pandemic.
During the year we nevertheless maintained a high
degree of focus on potential market changes as
variations of the pandemic and the war in Ukraine
repeatedly spiked and dissipated and caused reactions
within governments and ultimately the FX markets.
The Company remains focussed on ensuring that
any losses would not damage our ability to service
customers competitively (i.e. pricing for our
currency routes).
Further, efforts were made to review and adjust
the diversification and maturity of our assets
(bond portfolio). We reduced our exposure to longer
dated bonds resulting in a realised loss of £4.8 million.
We continue to see movements in the fair value of our
portfolio as interest rates and their expectations evolve.
Our goal has been to minimise realised losses whilst
also avoiding significant potential reductions in
regulatory capital.
Wise Annual Report and Accounts 2022 45
Risk Mitigation Development in FY2022
Fraud
Fraud risk is the possibility of the
organisation and/or its customers
being subject to fraudulent activity,
either from within by Wise employees
or externally by individuals abusing the
services of Wise and/or our customers
whilst they use the services of Wise.
Both internal and external fraud may
negatively impact our customers
as well as result in reputational,
operational and possible
regulatory risk for Wise.
Responsibility for this area of risk
is shared across our Senior Leadership
Team (SLT), with key functions responsible
for managing this risk overseen by the
Global Head of Operations and the
Chief Technology Officer.
We have a dedicated Fraud Operations
Management team which is primarily
responsible for the ongoing detection
and monitoring of potential fraud activity
occurring on our platform.
Similar to the response taken to mitigate
financial crime risk, Wise has deployed:
• targeted fraud alert (dynamic rules and
machine learning capabilities that monitor
the transactions entering and exiting the
Wise platform);
• additional risk based controls (heightened
measures that are automatically enacted
based on a customer’s unique risk profile);
and
• appropriate background checks
and training programmes for all
Wise employees.
Following Wise’s success and growth,
there is an increased need for our control
processes to evolve to mitigate any
increased risk of fraud.
To counteract this risk, we have focussed on
designing and implementing an improved
control framework including:
• continued investment in machine learning
capabilities underpinning our fraud
alerting and monitoring models to protect
customers transacting on our platform;
• enhanced procedures around higher
risk processes;
• refining our access processes to further
restrict access to data and systems to
appropriate teams within the organisation;
• implementing additional measures to
enforce robust segregation of duties,
through automated controls where
possible, to reduce the risk of error
or fraud;
• implementing additional monitoring
processes to identify unauthorised
or potentially suspicious activities
performed within operational teams;
Management has undertaken detailed
testing as follows, and taken assurance
that internal fraud had not occurred:
• Performed a detailed review of
operational losses recorded in the audit
period to assess if internal fraud occurred.
• Performed a detailed review of other
possible fraud indicators to identify if any
unauthorised changes were made to data
within key systems which could impact
the reliability of financial reporting.
Over the course of FY2023, management
will continue to focus on maturing the
control framework further and ensuring
the revised framework is fully embedded.
Risk management continued
Wise Annual Report and Accounts 202246
Strategic Report
Risk Mitigation Development in FY2022
Third-party risk
Certain third parties are critical to
ensuring that we are able to offer our
services to customers and operate our
business every day. These third parties
include payment service providers and
financial institutions, as well as vendors
that perform, on an outsourced basis,
tasks related to servicing customers.
There is a risk that if Wise fails
to maintain or acquire appropriate
third-party services and vendors, this
will result in reputational, operational
and possibly legal or regulatory risk for
Wise, either directly (if Wise cannot
perform its obligations), or indirectly
(if actions taken by a third party are
attributed to Wise).
Third-party risk also includes risk
from the over reliance on a particular
payment provider or vendor, without
adequate redundancy, and the risks
to Wise’s operations if (i) there is a
long-term disruption or reduction
in service levels and no exit strategy
in place or (ii) the third-party chooses
to exit its relationship with Wise.
Additionally, Wise’s inability
to maintain strong relationships
with payment providers and/or
vendors could impact the pricing
of our services.
Responsibility for this area of risk is shared
across our Senior Leadership Team (SLT),
each responsible for the risk generated by
contracting third-party relationships within
their teams. In addition, the General Counsel
is responsible for developing a third-party
risk framework to ensure a unified approach
to measuring and mitigating third-party risk.
Wise mitigates third-party risk through
(i) a due diligence and onboarding process,
(ii) ongoing monitoring, and (iii) exit
planning. In addition, Wise seeks to work
with multiple third party partners, when
possible and practicable, for key services.
Where necessary, Wise also has dedicated
teams to actively engage third parties and
ensure that it understands our mutual risk
exposures, regulatory responsibilities,
and changes in the operational viability
of our activities.
During the year, Wise recognised the
need to establish a more robust means
of measuring the risk posed by third parties
that are critical to its product offering.
For these reasons, it developed and
implemented a comprehensive onboarding
process and began monitoring certain of
Wise’s most critical third parties.
Improvements include:
• An updated third-party risk framework
and policy.
• A revised cross-team process that
requires input and review from relevant
subject area matter experts across Wise.
• Automation and record keeping of newly
contracted third-parties.
Wise will continue to work to ensure that
its third-party risk management process
is systematic and robust, and is applied
consistently across our third parties.
Security
Security risk is the risk to operations,
assets, and; individuals, related to the
potential for unauthorised access, use,
disclosure, disruption, modification,
or destruction of information and/or
information systems within Wise.
The security risks for Wise are
very sensitive because much of the
platform and servicing is exclusively
digital. As such, even seemingly small
instances of the risk materialising
could have major impacts on the
business. This is coupled with data
privacy threats that if exposed would
result in serious reputational losses
and customer harm.
We maintain a robust security
maturity assessment and plan
for continuous improvements.
Penetration tests are regularly carried
out, together with simulated attacks to
ensure our controls are sufficient to
identify weaknesses.
We continually evaluate and mitigate
external threats.
We have detection capabilities to monitor
and inform when there are system attacks
and comprehensive incident response
procedures which help us respond
with speed.
We continually train and raise awareness
with employees and customers on
evolving threats, and where relevant
how to report incidents.
As a consequence of the pandemic, our
workforce has increasingly relied on virtual
security infrastructure and we continue
to raise awareness of potential threats
and enforce enhanced measures for
remote working.
In addition, authentication protocols have
been increased/strengthened to further
reduce the risk of security breaches.
In parallel the Security team has engaged
in internal vulnerability simulations to target
potential vulnerabilities through exercises
that test our staff’s handling of various forms
of attacks to ensure the existing controls
identify, escalate, and prevent material
threats to the system infrastructure.
Lastly, we have enhanced our vulnerability
management programme to ensure timely
identification and mitigation of potential
threats to the system infrastructure.
Wise Annual Report and Accounts 2022 47
Risk management continued
Risk Mitigation Development in FY2022
Data privacy
Data privacy risk is the risk to the
rights and freedoms of people through
the improper disclosure of their
personal information.
As part of the Group risk governance forum,
this risk is reported to the Operational
Risk Committee on a monthly basis, with
oversight and challenge provided by the
second line risk management and other
Executive team members, including the
Global Head of Operations, Chief Marketing
Officer, VP of Growth and the Chief
Financial Officer.
All employees are trained on data protection
laws, including GDPR.
Wise has been building dedicated
capabilities to educate its staff,
horizon scan emerging vulnerabilities,
and enhance data governance.
Disruptive competition
Wise itself has been a key disruptor
in the payments service industry
and the potential for Wise to be
disrupted persists.
Some of our traditional competitive
peers have been engaging with the
market in regards to both pricing and
customer convenience. Additionally,
we have noticed that our model has
caused banks to attempt to develop
their own competing services and
sizable technology companies,
previously not in the market, have
entered and embraced the mission
objectives of Wise.
Finally, there is speculation around
the potential for CBDCs, stablecoins
and other DeFi technologies
to disrupt financial services,
including cross-border payments.
Of course any disruptive technologies
can challenge Wise’s ability to attract
and retain customers’ profitability.
Our primary mitigation to the threat of
competition is to focus on what we do best,
which is to build products that fit with what
customers tell us they want – lower prices,
greater speed, and increased convenience.
We measure ourselves against these, and
communicate openly with our customers
about our progress (see Mission Updates).
We also mitigate the risk of banks and
other companies offering low(er) prices
by opening up our infrastructure for them
to use. Our aim is to provide the best way
to offer low cost, fast transfers.
Finally, we continually look at new
technologies and how they can help.
If a technology can help us provide faster,
cheaper ways to move money, in a way
that has the support of our regulators and
stakeholders, of course we’ll consider
integrating this for the benefit of
our customers.
We reduced prices through FY2022 for
2.5 million customers.
Our payment speed increased, reaching
49% of payments being instant by the
end of the year.
We launched many features that have
helped our Wise Account and Wise
Business products become more
convenient. These are detailed
in the Our products section on page 11.
We continue to monitor new technologies
but this element of the risk is still very
nascent in our opinion.
Wise Annual Report and Accounts 202248
Strategic Report
Risk Mitigation Development in FY2022
Economic uncertainty
This represents the impact economic
shocks can have on our business.
Particularly current examples can
include reduced customer demand
during a recession, increased cost
of supply due to inflation, credit
exposures, volatile asset prices
to name a few.
As such the occurrence of these
risks could impact the rate at which
we can grow and our profitability
at the same time.
We believe that we are building a product
that is core to people’s lives, and as such,
this should mean that we become even
more important to our customers during
challenging economic conditions.
For example, throughout the pandemic
and our recent support for Ukraine.
As stated above mitigating market risks
is core to our business.
Managing our cost base is core to our
mission, but should we have to, we will
pass costs on to our customers. We believe
we mitigate the impact of this by having
clear and open communication with our
customers such that they trust how and why
we price our products they way that we do.
Finally, to ensure that we provide for
economic shocks and sustained challenging
scenarios, we hold adequate capital and
liquidity to ensure we can sustain operations
and avoid unnecessary harms to customers
or any other stakeholders. We do this
consistent with the required regulations
relating to capital and liquidity in each
of our jurisdictions. We monitor capital
and liquidity carefully and have clear
thresholds and appetites for how much
we need to hold.
Wise successfully navigated the recent
volatility from the pandemic, and during
this time prepared plans and forecasts
should this economic impact be much
more severe than we have seen.
We continue to use these stress test
scenarios in our capital and liquidity
planning to assure we are well funded
to survive plausible but severe economic
downturns and shocks.
Further, as stated above, we continue
to sharpen and develop our approach
to handling market volatility.
Wise Annual Report and Accounts 2022 49
Viability statement.
As required by Provision 31 of the 2018 UK Corporate Governance Code, the Directors have assessed the future prospects and the
viability of the Group for a period significantly longer than 12 months from the approval of these financial statements.
The assessment period
The Directors have determined that a period of three years until April 2025 is an appropriate period over which to provide the Board’s
viability statement. This period is a longer period than the period used to assess going concern but is considered an appropriate
timeframe by the Directors because:
• it is within the period covered by the Board’s strategic planning process;
• it is within the period that the current revolving credit facility (RCF) will be up for renewal. Further details on the RCF are provided in
note 17 of the Consolidated Group Financial Statements; and
• the accuracy of forecasts beyond three years could reasonably be expected to be less accurate and therefore of less value in
assessing prospects and viability.
The assessment of prospects
The Directors have assessed the Group’s prospects through review of its recent financial performance (pages 18 to 21), the Group’s
product offering and mission pillars (pages 10 to 13) and principal risks the Group faces (pages 42 to 49).
The prospects of the Group are considered as part of its financial and strategic planning process led by the CFO in conjunction with the
SLT and relevant functions. This occurs every six months and consists of a detailed review of monthly profitability, cash flows, liquidity
and capital positions as part of the base forecast.
The Group’s prospects are reviewed against liquidity and capital headroom to regulatory requirements and ongoing compliance
with the six-monthly covenants attached to the Group’s RCF. The most recent plan was approved by the Board in May 2022.
As set out in the ARC Report on pages 82 to 89, the ARC reviews and discusses with management the schedules supporting the
assessment of going concern and viability.
The assessment of viability
The Group’s base forecast is the best assessment of the future performance of the business. The Board recognises that stress testing
of the Group’s business plan is a key risk management tool. Stress testing is used by senior management and the Risk Management
function to ensure the robustness of the base plan, highlight key risks to its execution, and identify clear mitigation plans if the risks
were to arise.
The assessment of viability has been based on the impact of severe but plausible scenarios for all the principal risks described on pages
42 to 49. Two distinct scenarios were modelled assuming one or more of these principal risks occurred within the assessment period.
Growth drivers were adjusted in line with the below scenarios whilst operating costs were either increased in line with the below
scenarios or kept in line with the base forecast assuming no mitigating actions. The impact was quantified and tested against the
Group’s capital, liquidity and covenant requirements.
Viability statement
Wise Annual Report and Accounts 202250
Strategic Report
The table below summarises the scenarios modelled by the Group:
Scenario Description Principal risks addressed in the scenario
Market-wide
instability
• Assumes that a war between Russia and Ukraine exacerbates and
impacts neighbouring countries lasting 12 months
• This leads to a period of economic uncertainty with market turmoil
within the EU impacting businesses and reduced international travel
• Persistent market volatility in the FX and capital markets arises
• Impact to banking partners in the region reduces the speed that can
be offered to customers
• Increasing competitive operating environment as turmoil creates an
opportunity for local disruptors
• Market
• Fraud
• Third party
• Disruptive competition
• Economic uncertainty
Business
process failure
and regulatory
action
(Idiosyncratic)
• Reputational damage from compounded failure in regulatory
compliance systems and AML processes with instances of
internal fraud
• In April 2022, news leaks resulting in reputational damage to the
business alongside customer attrition
• FCA imposes a large fine and a s166 review
• Regulatory compliance
• Financial crime
• IT system
• Security and data privacy
Under these scenarios, the Group is able to meet its capital and liquidity obligations without any mitigating actions and continue
operating within its financial covenants throughout the assessment period, despite a reduction in operating profits. This reflects the
resilience of the Group and its robust financial model of profitable and sustainable growth alongside the existing headroom to both the
capital and liquidity requirements.
Should the ultimate impact of the scenarios on growth and profitability be more significant than envisaged, management has several
actions which can be taken to ensure capital, liquidity and debt covenant requirements are met. These include, but are not limited to:
• operating cost reductions to align the cost base with any suppressed volumes, for example limiting hiring or salary increases
• reduced customer acquisition marketing spend
• raising fees charged to customers
Reverse stress test
The Directors also reviewed the results of the reverse stress testing performed to provide an illustration of the customer activity decline
in the case of a Black Swan event that would result in Wise no longer being viable. This, specifically, would be the earlier of: insufficient
working capital, insufficient regulatory capital, or insufficient regulatory liquidity resources. The scenario demonstrated that the model
can sustain a material reversal in volume growth alongside continued investment in operating costs in line with our growth plan.
The stress scenario is deemed implausible as (a) Wise has grown quarterly volumes consistently year over year through recessionary
environments and the unprecedented global pandemic, (b) the strong base of existing customers that use Wise alongside (c) the
investment that is going into improving and expanding the products and services we offer. Furthermore, management would have
warning signs of the volume and profitability deterioration as costs rise ahead of revenue growth. This would be identified and
escalated appropriately as part of management reporting and internal monitoring processes, which include regular capital and
liquidity monitoring. This would give sufficient time to implement appropriate management action to extend the viability period.
Viability statement and going concern
Based on the assessment above the Directors confirm that they have a reasonable expectation that the Group will be able to continue
operating and meet its liabilities as they fall due over the three-year period until April 2025.
Going concern
Furthermore, following the review of the results, the Directors also considered it appropriate to prepare the financial statements
on the going concern basis, as explained in the Basis of preparation paragraph in note 1 to the financial statements.
Wise Annual Report and Accounts 2022 51
Non-financial information statement.
This non-financial information statement provides an overview of topics and related reporting references as required by Sections 414CA
and 414CB of the Companies Act 2006. The below table and information it refers to is intended to help Wise Owners understand our
position on key non-financial information matters.
Reporting
requirement Policies and standards which govern our approach
Where to find more
information in this report Page(s)
Environmental
matters
Environmental & social impact strategy – is a strategy covering
our sustainability and charitable partnerships efforts in a hybrid
of what other companies might call Environmental, Social and
Governance (ESG) and Corporate Social Responsibility (CSR).
The strategy, which is made up of five pillars, includes our
‘Emission Zero’ pillar which enshrines our Measure, Reduce
and Offset/Remove approach to climate change and our
emissions. We are committed to being net zero by 2030.
Environmental and social impact
s172 statement
28 to 33
34 to 40
Human rights
Modern Slavery Statement – is Wise’s statement of our
commitment to ensuring that slavery and human trafficking
are not taking place in any part of our business or supply chain.
Privacy and data protection – sets out Wise’s approach to
protecting the personal data and privacy rights of our customers,
employees and other stakeholders.
Environmental and social impact
s172 statement
33
Our people
Code of Conduct – sets high standards for how employees should
behave and treat each other.
Health and safety policy – sets out our approach to health,
safety and wellbeing.
Diversity, equity and inclusion – outlines the Wise commitment
to creating a team and working environment that are diverse,
equitable and inclusive.
Anti-bribery and corruption (ABC) policy – sets out our
responsibilities, in observing and upholding our position on bribery
and corruption; and to provide information and guidance on how
to recognise and deal with bribery and corruption red flags.
Whistleblowing policy – is the process and parameters for
employees to report any suspected instances of wrongdoing.
Delegation of authority policy – defines the process for assigning
authority to employees.
Conflicts of interest policy – ensures that all Directors adhere to the
highest standards of behaviour with regard to conflicts of interest.
Wiser complaint/grievance Process – sets out the processes and
guidelines for filing a formal complaint regarding another employee.
Conflict resolution process – sets out the informal process for
resolving conflicts between employees.
Our people
s172 statement
22 to 27
36
Social matters
Third party risk management policy – summarises the systems
and processes in place to enable Wise to identify, assess, monitor
and report on key risks which arise as a result of relationships Wise
has or proposes to have with certain of its third parties.
Charitable donations process – summarises the ways that employees
can get involved in disaster relief and charitable donations.
Complaints policy – describes the process for resolving customer
complaints efficiently.
Vulnerable customer policy – is Wise’s policy stating our aim
to ensure that the operations of our business do not have
a negative impact upon vulnerable consumers when they
are using our products.
Environmental and social impact
s172 statement
28 to 33
38
Non-financial information statement
Wise Annual Report and Accounts 202252
Strategic Report
Reporting
requirement Policies and standards which govern our approach
Where to find more
information in this report Page(s)
Anti-corruption
and anti-
bribery
Anti-bribery and corruption (ABC) framework – sets out our
responsibilities, in observing and upholding our position on bribery
and corruption; and to provide information and guidance on how
to recognise and deal with bribery and corruption red flags.
Regional anti money laundering policy – provides all employees
with an overview of the Wise approach to mitigating the risk of
money laundering (ML) and terrorist financing (TF).
Sanctions policy – provides all Wise employees with an overview
of sanctions. Defines the controls to protect the Company by
ensuring compliance with all applicable sanctions laws, orders
and regulations, as well as detect, prevent and deter attempts
to use Wise to circumvent sanctions.
Enhanced customer due diligence manual – establishes EDD
procedures which strengthen Wise’s KYC framework and look
to ensure compliance with relevant regulatory requirements for
customers who require a higher level of due diligence.
Financial crime oversight escalation and approval policy – provides
a governance structure and assists teams which are responsible
for introducing or improving product offering, or when changing
controls or compliance operations strategy. This policy serves to
help when selecting and prioritising internal controls and risk
mitigation actions in the context of continuous improvement
of operational processes, and compliance management of new
products, features or partnerships.
Politically exposed persons manual – summarises the regulatory
requirements and best practices applicable to politically exposed
persons (PEPs) and to describe in detail the compliance programme
on how PEPs are identified, onboarded and monitored.
Environmental and social impact
Overall approach to risk
28 to 33
42 to 49
Non-financial information Where to find the information within our Strategic Report
Our business model
CFO review on pages 18 to 21
Non-financial key performance indicators
Key performance indicators on pages 16 to 17
Principal risks and impact on business policy
The risks we face at Wise on pages 42 to 49
Wise Annual Report and Accounts 2022 53
p.56
Our Board
p.68
Corporate
governance
statement
p.71
Board activities
Highlights
Corporate
Governance
Wise Annual Report and Accounts 202254
Governance
62.5%
Board independence
37.5%
Gender diversity on our Board
45
Average age of our Board
12.5%
BAME representation
on our Board
Top 20
Place to work in the UK
4.2
Glassdoor ranking
Governance at a glance.
Highlights
Governance at a glance
Board changes
• Taavet Hinrikus stepped down as Chair and Director
on 8 December 2021.
• David Wells, an Independent Non-Executive Director,
was appointed Chair of the Board on 8 December 2021.
• Terri Duhon joined the Board as an Independent
Non-Executive Director on 1 January 2022.
• Jane Fahey was appointed as Company Secretary
on 1 January 2022.
Governance improvements
• New Group structure implemented as part of Wise’s
direct listing on the London Stock Exchange in July 2021.
• Introduction of the dual-class share structure giving
all pre-listing shareholders the opportunity to hold
enhanced voting rights.
• New inside information processes and controls implemented
with training across the Group.
• Updated and approved the Board Committee Terms
of Reference.
Wise Annual Report and Accounts 2022 55
A team to deliver long-term
value to all stakeholders.
Our Board is collectively responsible for establishing and
upholding the Wise mission, values and strategy. Together,
the Board oversees Wise and sets our strategic direction, with
the goal of continuing to deliver value for all of our stakeholders
– our owners, employees, suppliers, regulators, communities
and of course, our customers.
As at 31 March 2022, our Board comprised the Chair, four
Independent Non-Executive Directors, one Non-Executive
Director and two Executive Directors.
During the year, we held three scheduled meetings of the Board,
three scheduled Nomination Committee meetings, four scheduled
Audit and Risk Committee meetings, and three scheduled
Remuneration Committee meetings. We’ve set out individual
attendance for each of those meetings on pages 58 and 59.
We also held a number of ad hoc meetings of the Board and
its Committees throughout the year, as and when required.
For information on the activities of our Board during the year,
see pages 71 to 73. For information on the activities of Board
Committees and meeting attendance please refer to the
Committee Reports on pages 79 to 112.
Our Board
2
3
5
7
1
David Wells – 51, American
Chair
2
Kristo Käärmann – 41, Estonian
Chief Executive Officer
3
Matthew Briers – 45, British
Chief Financial Officer
4
Clare Gilmartin – 46, Irish
Independent Non-Executive Director
Wise Annual Report and Accounts 202256
Governance
1
4
6
8
5
Terri Duhon – 50, American
Independent Non-Executive Director
6
Alastair Rampell – 41, American
Non-Executive Director
7
Hooi Ling Tan – 38, Malaysian
Independent Non-Executive Director
8
Ingo Uytdehaage – 49, Dutch
Independent Non-Executive Director
Former Directors who served for
part of the year
• Taavet Hinrikus resigned as Director and Chair of the Board
on 8 December 2021.
• Dean Nash resigned as Director on 18 June 2021 and
resigned as Group Company Secretary on 1 January 2022.
Wise Annual Report and Accounts 2022 57
Our Board continued
Matthew Briers – 45, British
Chief Financial Officer
Board meeting attendance: 2/3
1
Date of Appointment: 18 June 2021
Background: Matthew is Chief Financial Officer of Wise. Matt joined
the Wise team in 2015 from Google, where he was Head of Sales
Finance for Google UK. Matt previously held the role of Head of
Strategy for Asset Finance at Lloyds Banking Group, as well as
managerial positions at Bain & Company and Capital One. He has
nearly 20 years’ experience in the financial sector. He holds a Master
of Engineering in Engineering, Economics and Management from
Oxford University. Matt brings to the Board a strong background
in financial services and almost seven years’ experience with
the Company.
Current external roles: None
1. Matthew Briers suffered an injury in early February 2022 and was unable
to attend the scheduled Board meeting on 8 February 2022.
Clare Gilmartin – 46, Irish
Independent Non-Executive Director
Board meeting attendance: 3/3
Date of appointment: 18 June 2021
Background: Clare joined the Board as Non-Executive Director
in 2021. Clare has been a high growth technology leader for close
to 20 years. After starting her career in management consulting
with BCG, Clare spent 10 years growing eBay in Europe, latterly
as VP eBay Europe. She then took over as CEO at Trainline in 2014,
taking it from being a UK rail only platform to being a pan European
technology leader. She led the business through a sale to KKR in
2015, and then through a successful IPO in 2019. Clare is an adviser
to Future Frontiers, a social enterprise that provides career guidance
to pupils from low income backgrounds, and is also an advocate for
women in technology. She holds a Bachelor of Commerce (Int)
degree from University College of Dublin, and was their Business
Alumni of the year in 2019. As a technology leader with almost two
decades of experience in the industry, Clare brings to the Board a
strong background in high growth industries and risk management.
Current external roles: Board member of GetYourGuide GMBH,
an online marketplace for tours & activities.
David Wells – 51, American
Chair
Board meeting attendance: 3/3
Date of appointment: Appointed as Chair on 8 December 2021
Background: David joined our Board as Non-Executive Director in
2019. Prior to this, he served as CFO at Netflix for eight years, retiring
in 2019 after nearly 15 years with Netflix and having served as VP
of Financial Planning and Analysis prior to his role as CFO. Before
joining Netflix, David served in various roles at Deloitte Consulting
from 1998 to 2004 and in the non-profit sector before getting
his MBA. He holds a joint MBA/MPP Magna Cum Laude from
the University of Chicago and a bachelor’s degree in Commerce from
the University of Virginia. David brings to Wise a wealth of financial
knowledge and years of industry experience. David was appointed
as Chair on 9 December 2021, having served as Senior Independent
Non-Executive Director before that. Taavet Hinrikus, who was the
previous Chair of Wise, was not involved in the selection or
appointment of David as his successor.
Current external roles: David currently sits on the Board of
Innovations for Poverty Action, a research and policy non-profit
focused on effective anti-poverty programmes, and is an
Independent Non-Executive Director and Audit Committee Chair
for Hims/Hers, an online consumer healthcare provider. He’s also an
Independent Non-Executive Director of The Trade Desk, an online
advertising platform, and is Audit Committee Chair and a member
of their Compensation Committee.
* resigned as a member on 8 December 2021
*
Kristo Käärmann – 41, Estonian
Chief Executive Officer
Board meeting attendance: 3/3
Date of appointment: 28 April 2021
Background: Kristo Käärmann is the Chief Executive Officer of Wise,
which he co-founded in 2010. Prior to that he was a consultant at
Deloitte and PwC. He holds a bachelor’s and master’s degree from
University of Tartu. As a founding member of Wise, Kristo brings
to the Board his industry experience and vision for the future
of the Company.
Current external roles: None
Chair
Audit and Risk Committee member
Remuneration Committee member
Nomination Committee member
Wise Annual Report and Accounts 202258
Governance
Alastair Rampell – 41, American
Non-Executive Director
Board meeting attendance: 3/3
Date of appointment: 18 June 2021
Background: Alex joined the Board as a Non-Executive Director
in 2018. Alex is a General Partner at Andreessen Horowitz where he
focuses on financial services and sits on the board of 15 of the firm’s
portfolio companies. Alex additionally led Andreessen Horowitz’s
investments in Opendoor ($OPEN), Plaid, Quantopian (acquired
by Robinhood), and Rival (acquired by LiveNation). Prior to joining
Andreessen Horowitz, Alex co-founded multiple companies
including Affirm ($AFRM), which he co-founded with Max Levchin,
FraudEliminator (acquired by McAfee in 2006), Point, TrialPay
(acquired by Visa in 2015), TXN (acquired by Envestnet in 2019) and
Yub (acquired by Coupons.com in 2013). He holds a BA in Applied
Mathematics and Computer Science from Harvard University.
Alex brings to the Board his industry experience, financial
knowledge and ability to act as a voice for Owners in the Boardroom.
Current external roles: Alex holds the following external roles:
(i) Affirm, Inc. – Co Founder & Board Observer; (ii) Andreessen
Horowitz – General Partner and board member for 15 portfolio
companies as listed below; (iii) Independent – Investor/Advisor;
and (iv) Steadman Philippon Research Institute – Board Member.
Hooi Ling Tan – 38, Malaysian
Independent Non-Executive Director
Board meeting attendance: 3/3
Date of appointment: 19 June 2021
Background: Hooi Ling joined the Board as a Non-Executive Director
in 2021. Hooi Ling is the Co-Founder and Chief Operating Officer
of Grab, Southeast Asia’s leading super app that offers users a wide
range of on-demand services in the region. Based in Singapore,
she oversees Grab’s operations. Prior to joining Grab full-time in
2015, Hooi Ling led high priority strategic and operational projects at
Salesforce, where she specialised in Corporate Strategy, Corporate
Operations, Pricing Intelligence and Monetization. Before joining
Salesforce, Hooi Ling was a consultant at McKinsey & Company,
advising global clients on corporate strategy and operations. Hooi
Ling is a member of the National University of Singapore (NUS) Board
of Trustees, and sits on the board of the Economic Development
Board (EDB). Hooi Ling has a Bachelor of Engineering (Mechanical)
from the University of Bath, and a Master of Business Administration
from Harvard Business School. Hooi Ling brings to Wise her
experience as Co-Founder of an international technology
company and background in corporate strategy.
Current external roles: Co-founder and COO, Grab, and Trustee
of National University of Singapore.
* resigned as a member on 18 March 2022
Ingo Uytdehaage – 49, Dutch
Independent Non-Executive Director
Board meeting attendance: 3/3
Date of appointment: 18 June 2021
Background: Ingo joined the Board as an Independent Non-Executive
Director in 2019. Ingo is also currently the CFO of Adyen and a former
Board member of Foam Museum, Amsterdam. Before joining Adyen,
he held the position of Finance Director at KPN in The Hague. He has
also held various roles in the telecommunication and retail industries,
including diverse management functions at VendexKBB/Maxeda.
He has earned degrees from Maastricht University (MBA in
accounting and finance), Aarhus Business School in Denmark (MBA
in supply chain management and organisational behaviour) and the
Vrije Universiteit in Amsterdam (Post Graduate, CPA). Ingo brings
to the Board his financial and accounting skill-set and experience
working across different industries.
As CFO of Adyen, one of Wise’s suppliers, Ingo will excuse himself
from any commercial negotiations between the companies.
Current external roles: CFO of Adyen.
Terri Duhon – 50, American
Independent Non-Executive Director
Board meeting attendance: 1/3
2
Date of appointment: 1 January 2022
Background: Terri joined the Board as a Non-Executive Director in
January 2022. Terri holds non-executive board positions at Morgan
Stanley and Rathbones Group PLC. She is an Associate Fellow at the
Saïd Business School at Oxford University, a motivational speaker for
Speakers for Schools and a frequent Keynote Speaker on Culture,
Diversity and Corporate Purpose. After graduating from MIT in Math,
Terri started her career at JPMorgan and spent 10 years working as a
derivative trader. In particular she was part of the team that developed
the credit derivative market globally as documented in Fool’s Gold.
Later she became an entrepreneur and started a consulting business
where she led expert witness teams in unwinding some of the more
complex products from the credit crisis. She has been on the Board
of CHAPS Co (the UK high value payment system), the Board of
Operation Smile UK, on the MIT Corporation Visiting Committee
for the MIT Math Department and was a founding member of the
Women’s Leadership Group for the Prince’s Trust. She is the author
of How the Trading Floor Really Works, an award winning educator
and a TEDx speaker. Terri brings to Wise her deep understanding
of the financial industry and risk management.
Current external roles: Non-Executive Director and Chair of Risk
Committee of Morgan Stanley International – member of Audit,
Remuneration and Nomination Committees. Non-Executive Director
and Chair of Risk Committee of Rathbones Group PLC, Ambassador
of Women on Boards.
2. Terri Duhon joined the Board in January 2022, she has only had the
opportunity to join one scheduled Board meeting on 8 February 2022.
* Alex sits on the board of the following companies: Branch, Brightside,
Descript, Divvy, Earnin, FlyHomes, Loft, Mercury, PeerStreet, Point,
Propel, SentiLink, Super Evil MegaCorp, and Very Good Security.
*
Wise Annual Report and Accounts 2022 59
Governance of the Wise Group.
Wise is committed to high standards of governance, which
includes governance at the Board, Executive and subsidiary
levels. Our governance structure is designed to meet the
requirements of an evolving and growing business and is
underpinned by our Group policies and procedures.
The Board delegates its authority under the following categories,
which are described in more detail below:
• Board governance;
• Executive governance; and
• Delegated executive authorities to the CEO and CFO
through which aspects of the CEO and CFO’s authority
are sub-delegated as appropriate.
Delegation of authority policy
Decision-making and day-to-day management of Wise are delegated by the Board to the CEO who in turn can sub-delegate
his authority in accordance with the Group delegation of authority policy. This allows for prompt and effective decision-making
and management. The delegation of authority policy sets limits on what can be delegated and ensures that there are effective
controls in place. These controls are managed by the Company Secretary and this policy is regularly reviewed by the Board.
Board governance
The Board is led by the Chair, and provides comprehensive oversight of and challenge to the overall direction and strategy
of the business. The Board is supported by the following Committees:
Audit and Risk
Committee
Further details
can be found
on the role and
responsibilities
on pages 82 to 89.
Nomination
Committee
Further details
can be found
on the role and
responsibilities
on pages 79 to 81.
Remuneration
Committee
Further details
an be found
on the role and
responsibilities
on pages 90 to 112.
Disclosure
Committee
Assists the Board
in discharging its
obligations relating
to monitoring the
existence of inside
information and
its disclosure.
Executive governance
The Board delegates to the CEO the day-to-day management of the Group. The CEO is supported in his role by the Senior
Leadership Team (SLT), which provides advice, challenge and support. The Senior Leadership Team (SLT) and CEO meet weekly.
At Wise, we support an autonomous culture where decisions are delegated to those closest to the problems they are solving,
and where sharing plans and progress is encouraged and facilitated through a range of formal and informal sharing platforms,
including Slack and Google Workspace. This organisational model is central to how we operate. To that end, the Senior
Leadership Team (SLT) is responsible for setting Wise’s vision; overseeing key metrics; creating and sustaining the
culture and environment for Wise and Wisers to thrive; and allocating resources and accountability at a high level.
The CEO has also established Senior Leadership Team (SLT) committees that provide oversight and advice on operational
and risk matters. The key Senior Leadership Team (SLT) committees are:
Group Risk
Committee
Operational
Risk
Committee
Financial
Crime Risk
Committee
Regulatory
Change Risk
Committee
Assets and
Liabilities
Committee
Governance of the Wise Group
Wise Annual Report and Accounts 202260
Governance
Chair’s introduction to governance.
David Wells
Chair
Now that we are a listed company, our employees can benefit
from their shares (received as part of our employee share option
scheme) being tradeable and our eligible customers can
participate in our unique OwnWise programme and own a stake
in Wise. Our work on this project was innovative, providing an
opportunity for other companies to come to market in London
by way of a direct listing.
Board changes
In preparation for our listing and the related Group reorganisation,
the existing Directors of Wise Payments Limited, our principal
subsidiary, were appointed as the Directors of Wise plc.
These appointments promoted the best interests of the
Group by supporting an effective transition to public life for
Wise, ensuring continuity and the transfer of relevant skills and
experience. We also continued to review the skills, experience
and diversity of our Board, the outcome of which was the
appointment of Clare Gilmartin and Hooi Ling Tan in June 2021.
Furthermore, Wise’s then Chair, Taavet Hinrikus, had indicated
his intention to pursue his venture capital interests and leave
Wise in the year following the listing. This was an opportunity
to strengthen the independence of the Board, and we appointed
a new Independent Non-Executive Director, Terri Duhon,
in January 2022. Clare, Hooi Ling and Terri bring experience
in scaling, operating and controlling global technology and
regulated businesses, in addition to much valued diversity of
experience and thought. Terri also brings decades of experience
in the risk oversight of international financial operations. In this
they complement Ingo Uytdehaage and Alastair Rampell, who
have a deep understanding of Wise and a track record of guiding
the Group.
I am very pleased with the Board we have built and I am
delighted that 50% of our Non-Executive Directors and the
majority of our Independent Directors identify as female.
More information is available in the Nomination Committee
Report on pages 79 to 81 and Directors’ Report on pages 113
to117.
Finally, I would like to thank Taavet for the invaluable
contribution he has made as co-founder and Chair of Wise.
I look forward to continuing the work that he started during
his time on the Board.
Governance
This has been a transformational and transitional year
for governance at Wise. As stated in the Prospectus,
we voluntarily adopted the UK CGC at listing, reflecting
our belief in the importance of robust governance. Given
our transition from a private to a public company, we remain
on a governance journey. We aim for compliance with the
UK CGC while supporting the development and growth of
the business. Where we do not comply we will always provide
a full explanation as to why not. A full review of our compliance
with the UK CGC during FY2022 is included in the Compliance
Statement on page 63.
Chair’s introduction to governance
Dear Wise Owner,
On behalf of the Board, I am pleased to introduce Wise’s
Corporate Governance Report. This is both my first report
as Chair and Wise’s first report as a listed company.
Our first financial year as a listed company has been truly
transformational in terms of governance. The Board has
overseen Wise’s listing on the London Stock Exchange,
and the appointment of three additional Independent
Non-Executive Directors, all while working through the
continuing challenges of the COVID-19 pandemic.
We are guided by our mission which acts as the purpose for
our business – to create the best way to move and manage
money around the world. Our governance framework
is designed to support our mission while balancing the
concerns of our stakeholders. Set out here are highlights
of governance progress and direction of travel.
The direct listing
The Board helped to guide and prepare Wise as it pursued
a direct listing on the London Stock Exchange in July 2021,
becoming the first technology company to pursue a direct listing
in the UK. Given where we started, we saw the UK as our natural
listing home. In contrast to a traditional IPO, we saw a direct
listing as the fairer, cheaper and more transparent way for us
to broaden our ownership. We were also the first listed company
to introduce a widely held, dual-class share structure in the
UK, giving all pre-listing shareholders the opportunity to hold
enhanced voting rights. We believe this was the best way
of ensuring the delivery of long-term shareholder value by
keeping long-term focus on the mission and ensuring the
CEO can provide continuity through to 2026. Equally, we
believe in the importance of strong corporate governance,
evidenced by the board changes described below
and our voluntary adoption of the UK CGC.
Wise Annual Report and Accounts 2022 61
Board evaluation
In line with the UK CGC, we carried out an internal evaluation of
the Board and its Committees, focusing on the effectiveness of
our operation and practices. The evaluation helped us to identify
certain areas for improvement and we have identified a number
of actions to assist us on our governance journey. Further details
can be found on page 78.
Risk
Risk management and internal controls have been a significant
focus for the Board. Through the Audit and Risk Committee, we
are overseeing the continued development and implementation
of the three lines of defence model, which is the risk governance
framework we use to provide clarity on the responsibilities and
accountabilities across the business, risk and compliance teams
and Internal Audit. Robust risk management is critically important
to both Wise and our stakeholders. You can find more detail in
the Risk management section on page 41 and the Audit and
Risk Committee Report on pages 82 to 89.
Stakeholders
In 2021, as Wise transitioned from a private to a public company,
it was important for us to understand and address the needs
and expectations of our stakeholders. Despite the challenges
of the COVID-19 pandemic, we have continued to proactively
engage with our customers, employees, communities, suppliers,
governments, regulators, and owners, ensuring all stakeholder
voices are heard as we continue on our journey.
At Wise, we believe the customer voice should always be the
loudest, and we seek to consistently engage our customers
through surveys, interviews and focus groups. At our May 2022
Board meeting, we heard directly from a customer on their
experience of Wise via a live interview.
We engage our mission-aligned owners through regular investor
calls with our institutional investors and OwnWise calls for our
owner customer base. Our team of dedicated employees, our
Wisers, care deeply about our mission and share in our values.
We engage our Wisers through regular all-Company team calls,
Mission Days and quarterly planning presentations. The Board
recognised the benefits of having a more formal method of
engagement with employees and is committed to introducing
an appropriate method during the next financial year.
Finally, we recognise that the communities in which we operate
are also key stakeholders, and as such, we are committed to our
Emission Zero promise as part of our broader environmental and
social impact initiative. This initiative focuses on sustainability and
charitable partnerships but also covers how we work and how we
are governed. For further details see pages 28 to 33.
The Directors and I will continue our focus on understanding
the needs of our stakeholders and incorporating those needs into
our decision-making. For more information on how stakeholder
engagement influenced our decision making, please see our
statement on s.172 of the Companies Act 2006, on page 34.
Looking forward
I am impressed with the progress we have made on establishing
a governance framework that best and sustainably enables the
business and people of Wise. Further developing that framework
remains my focus for the year ahead.
Annual General Meeting (AGM)
We look forward to welcoming you (in person or virtually) to our
first AGM in September 2022. More information will be available
when our Notice of AGM is published.
David Wells
Chair
28 June 2022
Chair’s introduction to governance continued
Wise Annual Report and Accounts 202262
Governance
Corporate governance statement.
We recognise that having the
highest standards of corporate
governance is needed to support
a successful business and will help
us achieve our strategic objectives.
As a company with a standard listing, Wise is not required
to comply, or otherwise explain non-compliance, with
the requirements of the UK CGC. However, upon listing
to the London Stock Exchange in July 2021, we chose to
voluntarily adopt the UK CGC, demonstrating the Board’s
commitment to ensuring the highest standards of governance.
While there are some areas where we are not yet compliant
(listed below in Part B), we’re making good progress, having
achieved compliance in a number of areas since the time of
the listing (most notably, the transition of the role of Chair to an
Independent Director (as required by the UK CGC). The Board,
which is responsible for monitoring compliance with the UK
CGC, aims to achieve full compliance by the end of the next
financial year.
Part A of this Corporate Governance Statement sets out our
compliance and application of the UK CGC to Wise; and
Part B sets out the principles of the UK CGC and the specific
provisions with which we are not yet compliant. Our goal
is to provide a holistic view of the corporate governance
arrangements we have in place today, and where we plan
to continue to make progress.
Part A: Our compliance and application of the UK CGC:
Principle How have we complied?
Board leadership and Company purpose
Principle A
A successful company is led by
an effective and entrepreneurial
board, whose role is to promote
the long-term sustainable success
of the company, generating value
for shareholders and contributing
to wider society.
The Board is responsible for the long-term success of the Group and in order to ensure that
it is managing this responsibility appropriately the Board has:
• adopted matters reserved and Terms of Reference that ensure that matters of importance
that impact the business and the Group’s subsidiaries are considered and agreed at the
Board level. Please see page 71 for more information;
• created and used a Group agenda planner that lists the key strategic, operational and
financial matters that the Board should consider, both regularly and on an ad hoc basis;
• undertaken regular engagement with stakeholders, please see pages 34 to 40 for
more information;
• received updates from Committee Chairs on key discussions and recommendations; and
• received regular updates from the Group’s subsidiaries (please see page 60 on how we
oversee the Group).
Principle B
The board should establish the
company’s purpose, values and
strategy, and satisfy itself that
these and its culture are aligned.
All directors must act with integrity,
lead by example and promote the
desired culture.
Prior to the listing, the Board approved the strategic objectives of the Group, which included
Wise’s purpose, values and strategy, which we articulate as our “mission”. The Board reviews
and oversees the Wise mission on an ongoing basis by:
• receiving regular updates from the business on the implementation of our mission across
the Group;
• considering stakeholders when making key decisions and relating this back to the purpose
and culture of Wise;
• overseeing and updating the Code of Conduct as needed to ensure alignment
with the mission and provide Wisers with the guidance and support necessary
for a well-functioning workplace;
• reviewing the outcomes of employee surveys; and
• holding deep dive sessions focusing on risk culture and the experience of risk and
assurance teams.
Further details on the major discussions held and decisions on each of the Board’s focus areas,
including culture, can be found on page 71 to 73.
Principle C
The board should ensure that the
necessary resources are in place for
the company to meet its objectives
and measure performance against
them. The board should also establish
a framework of prudent and effective
controls, which enable risk to be
assessed and managed.
The Board regularly considers whether resources are responsibly and effectively deployed
to help achieve our mission, and has been involved in:
• advising on key senior management hires;
• monitoring the effectiveness of internal controls through the work of the ARC; and
• providing oversight of existing and emerging risks raised by stakeholders
via the ARC.
Corporate governance statement
Wise Annual Report and Accounts 2022 63
Principle How have we complied?
Board leadership and Company purpose
Principle D
In order for the company to meet its
responsibilities to shareholders and
stakeholders, the board should ensure
effective engagement with, and
encourage participation from,
these parties.
The Board strives to understand and take into consideration the views of its key stakeholders
when making key decisions.
Further detail on our stakeholders and how our Board engages with them can be found
on page 34.
Principle E
The board should ensure that
workforce policies and practices are
consistent with the company’s values
and support its long-term sustainable
success. The workforce should be
able to raise any matters of concern.
The Board ensures that workplace policies and practices are consistent with the
mission and support its long-term sustainable success by:
• continuously working on and reviewing the Code of Conduct to ensure alignment
with the mission;
• overseeing the whistleblowing policy and receiving reports on issues raised via the
independent reporting hotline and an online portal;
• having the Remuneration Committee review periodic employee survey data
to understand trends.
Further detail on our workforce engagement can be found on page 36.
Division of responsibilities
Principle F
The chair leads the board
and is responsible for its overall
effectiveness in directing the
company. They should demonstrate
objective judgement throughout
their tenure and promote a culture
of openness and debate. In addition,
the chair facilitates constructive
board relations and the effective
contribution of all non-executive
Directors, and ensures that
Directors receive accurate,
timely and clear information.
The Chair provides effective leadership and ensures that the Board is effective in directing
Wise by:
• maintaining a culture of openness and transparency at Board meetings in order to
encourage challenge and debate;
• ensuring effective communication between Executive and Non-Executive Directors
during Board meetings;
• holding private sessions with Non-Executive Directors which allows them to focus on
particular matters and issues with greater candour;
• having regular information sessions and informal chats with Executive Directors and Senior
Leadership; and
• working with the Company Secretary to ensure that accurate, timely and clear information
about the business is delivered to the Board.
Principle G
The board should include an
appropriate combination of
executive and non-executive
(and, in particular, independent
non-executive) directors, such that
no one individual or small group of
individuals dominates the board’s
decision-making. There should be
a clear division of responsibilities
between the leadership of the board
and the executive leadership of the
company’s business.
The Board has an appropriate mix of Executive and Non-Executive Directors, comprising
five Independent Non-Executive Directors, one Non-Executive Director and two Executive
Directors. The majority of the Committee members are Independent Non-Executive Directors,
including the Chair. In addition, each of the Directors has a different background, and serves
on different Committees – this helps ensure that no individual or small group dominates the
Board’s decision-making.
The role profiles of the Chair and the CEO are set out on page 74.
Corporate governance statement continued
Wise Annual Report and Accounts 202264
Governance
Principle How have we complied?
Division of responsibilities
Principle H
Non-executive directors should have
sufficient time to meet their board
responsibilities. They should provide
constructive challenge, strategic
guidance, offer specialist advice
and hold management to account.
We ensure that the Non-Executive Directors have sufficient time to meet their Board
responsibilities by requiring the Nomination Committee to assess their time commitments,
including their other directorships/appointments and roles, before appointing them.
This will be reviewed each year. The Nomination Committee concluded that there
were no Board members who were deemed as overboarded.
Further detail on the role of the Nomination Committee can be found on pages 79-81.
Non-Executive Directors provide constructive challenge, strategic guidance, offer specialist
advice and hold management to account by:
• challenging Executive Directors and Senior Leaders;
• monitoring Wise’s strategy and performance;
• providing valuable insight and advice in Board and Committee meetings; and
• leading the agenda planning process for Board and Committee meetings.
Principle I
The board is provided the support
of a company secretary, who ensures
that there are policies, processes
and information and resources
it needs in order to function
effectively and efficiently.
The Group’s Company Secretary leads the Company Secretary function, comprising
three qualified company secretaries, a Board Support Manager and Company Secretary
Project Manager.
The Company Secretary:
• provides the Board with the information and resources it needs to discharge its obligations;
• advises the Board and the Committees on governance matters;
• onboards new Directors;
• facilitates training; and
• creates and maintains all relevant Board and Group policies.
Composition, succession and evaluation
Principle J
Appointments to the board should
be subject to a formal, rigorous
and transparent procedure, and
an effective succession plan should
be maintained for board and senior
management. Both appointments
and succession plans should be based
on merit and objective criteria and,
within this context, should promote
diversity of gender, social and ethnic
backgrounds, cognitive and
personal strengths.
Appointments to the Board are subject to our Board succession planning policy and
a comprehensive search and selection process, including an analysis of business need
and Board composition and identification of key skills and competencies using clear criteria
to mitigate performance bias. For further details on the process, please see the Nomination
Committee Report on pages 79-81.
In addition, Wise maintains succession plans for the Board and senior management.
The Nomination Committee is responsible for the Board succession plan, which is supported
by the Board succession planning policy. It ensures that Wise will continue to appoint
experienced, diverse and skilled Directors. The Nomination Committee also reviews the
approach to CEO and Senior Leadership Team (SLT) succession planning and tracks
progress against these plans.
Further information can be found in the Nomination Committee Report on pages 79 to 81.
Principle K
The board and its committees
should have a combination of
skills, experience and knowledge.
Consideration should be given
to the length of service of the
board as a whole and membership
regularly refreshed.
The Board and its Committees are balanced, with an appropriate combination of skills and
expertise. For more information on the skills and experience of the Board please see the skills
matrix on page 77. Early on in the development of the Board, we recognised we needed
to add Independent Non-Executive Directors for broader committee and work coverage.
With the additions of Clare Gilmartin, Hooi Ling Tan and Terri Duhon, we added much
capacity and skills.
Wise keeps the membership of its Board under continuous review. Since the time of its listing,
Wise has changed its Chair and has appointed one new Independent Non-Executive Director.
Wise Annual Report and Accounts 2022 65
Principle How have we complied?
Composition, succession and evaluation
Principle L
Annual evaluation of the board should
consider its composition, diversity
and how effectively members work
together to achieve objectives.
Individual evaluation should
demonstrate whether each director
continues to contribute effectively.
An internally facilitated Board evaluation was conducted in March and April 2022,
which considered the following areas:
• The purpose and role of the Board
• Strategy and culture
• Stakeholder engagement
• Risk management
• Board governance
• Leadership, membership and group dynamics
• Director self-assessment
Our findings and actions can be found on page 78.
The Nomination Committee will consider whether an externally facilitated Board evaluation
will be conducted in the next financial year, with the intention that an external facilitated
Board evaluation will take place within three years of listing.
Audit, risk and internal control
Principle M
The board should satisfy itself on the
independence and effectiveness
of the internal and external audit
functions and satisfy itself on the
integrity of financial and narrative
statements.
The Board delegates the Group’s relationship with internal and external audit to the Audit and
Risk Committee, who monitor the independence and effectiveness of the audit functions by:
• receiving regular updates from our external auditor;
• reviewing a policy on the provision of non-audit services;
• reviewing and approving internal audit plans and management actions in relation
to issues; and
• ensuring that both internal and external auditors have a direct line to the Board.
Principle N
The board presents a fair,
balanced and understandable
assessment of the company’s
position and prospects.
The Board delegates to the Audit and Risk Committee the responsibility of reviewing financial
statements and accounting judgements.
The Audit and Risk Committee on behalf of the Board:
• ensures that results are accurate, timely and meet accounting standards
and judgements effectively;
• reviews compliance with relevant legislative and regulatory framework; and
• reviews representations made to the auditor.
The Chair of the Audit and Risk Committee provides an update at every Board
meeting on the key discussion and decision points and escalating matters
for the Board’s attention.
For more information please refer to the Audit and Risk Committee Report
on pages 82 to 89.
Principle O
The board should establish
procedures to manage risk, oversee
the internal control framework,
and determine the nature and extent
of the principal risks the company
is willing to take in order to achieve
its long-term strategic objectives.
The Board delegates responsibility for the oversight of internal control systems and risk
management processes to the Audit and Risk Committee.
In FY2022, the Audit and Risk Committee focused on the following:
• Reviewing the embedding and testing of the culture of risk management across the
organisation; and agreeing plans to continue to develop risk management within Wise,
including reviewing resourcing in the second line teams.
• Assessment and challenge of the risk profile and the principal and emerging risks.
• Approval of the compliance monitoring and testing plan.
• Review of risk appetite.
• Assessment of the effectiveness of internal control processes.
• Improving the effectiveness of the information technology general controls (“ITGC”)
programme, and ensuring appropriate substantive testing and monitoring has been in place
to provide comfort over the appropriateness of the financial statements. Refer to the ARC
report for more information.
• Improving compliance programmes related to e.g., safeguarding and financial crime and
addressing any specific areas for improvement.
• Review of the whistleblowing policy and processes.
• Improving the effectiveness of our regulatory oversight and fraud controls in place.
Corporate governance statement continued
Wise Annual Report and Accounts 202266
Governance
Principle How have we complied?
Remuneration
Principle P.
Remuneration policies and practices
should be designed to support
strategy and promote long-term
sustainable success. Executive
remuneration should be aligned
to company purpose and values,
and be clearly linked to the
successful delivery of the
company’s long-term strategy.
The Company’s approach to remuneration is based on providing a competitive total
remuneration package that is focused on alignment with shareholders and long-term
success through the use of share-based incentives. Since Admission, we have formalised
this approach through the development of a remuneration policy.
More detail is included under Principle Q below.
Principle Q.
A formal and transparent procedure
for developing policy on executive
remuneration and determining Director
and senior management remuneration
should be established. No Director
should be involved in deciding their
own remuneration outcome.
The Remuneration Committee develops the Company’s policy on executive remuneration and
monitors its ongoing appropriateness. It determines remuneration for the Executive Directors
and senior management.
Since Admission, we have developed a remuneration policy which is consistent with
the Group’s purpose, culture and the scale and scope of business operations, and that
it supports the business strategy and growth objectives and captures requirements under
the UK prudential regime for investment firms. We will formally seek shareholder approval
of the proposed Remuneration Policy at the first AGM taking place in September 2022.
The Remuneration Policy aims to provide competitive total remuneration packages that are
focused on alignment with the interests of our owners and long-term success through the
use of share-based incentives, and is designed to comply with, amongst other considerations,
Principles P and Q as well as provisions 36 to 39. It is already the case that no Directors are
involved in deciding their own remuneration outcomes.
More detail on the development of the Remuneration Policy and the policy itself can
be found in the Remuneration Report on pages 90 to 112.
Principle R
Remuneration outcomes. Directors
should exercise independent
judgement and discretion when
authorising remuneration outcomes,
taking account of company and
individual performance, and
wider circumstances.
The Remuneration Committee on behalf of the Board considers Group and individual
performance and market data benchmarking when making remuneration decisions.
Please see pages 90 to 112 for the Remuneration Report.
Wise Annual Report and Accounts 2022 67
Corporate governance statement continued
Part B: The relevant areas where we have not yet fully complied with the provisions of the UK CGC are as follows:
Principle or Provision Status of compliance
Provision 5 (under Board leadership and
Company purpose)
The board should understand the views of the company’s other
key stakeholders and describe in the annual report how their
interests and the matters set out in section 172 of the Companies
Act 2006 have been considered in board discussions and
decision-making.
The board should keep engagement mechanisms under review so
that they remain effective. For engagement with the workforce,
one or a combination of the following methods should be used:
• a Director appointed from the workforce;
• a formal workforce advisory panel;
• a designated non-executive Director.
If the board has not chosen one or more of these methods, it
should explain what alternative arrangements are in place and
why it considers that they are effective.
Directors have engaged with the workforce in a number
of ways, including speaking at team calls and events for
International Women’s Day, and attending Mission Days.
Please refer to page 36 which sets out further information
on how we engage with our employees.
However, during the financial year, given the short time
since the listing, the Board did not explicitly agree the specific
method through which it would engage with the workforce as
required under the UK CGC. During the next financial year the
Board intends to leverage the geographic base of the Directors,
which reflects the geographic spread of the Wise workforce,
and agree a calendar of engagement activities for each
Non-Executive Director. This will represent an alternative
arrangement under the UK CGC.
Provision 12 (under Division of responsibilities)
The board should appoint one of the independent non-executive
Directors to be the senior independent director (SID) to provide
a sounding board for the chair and serve as an intermediary
for the other Directors and shareholders. Led by the SID, the
non-executive Directors should meet without the chair present
at least annually to appraise the chair’s performance, and on other
occasions as necessary.
After David Wells, previously the SID, transitioned to his new
role as Chair of the Board, the Board has not appointed one
of the Non-Executive Directors to be an SID for the 2022
financial year.
The Board recognises the requirement of having a SID
and the benefits it would bring, and therefore has committed
to progressing the appointment of an SID during the next
financial year.
In the meantime, the performance of the Chair was evaluated
as part of the overall Board evaluation.
Provision 17 (Nomination Committee composition)
On listing, the Nomination Committee comprised two
Independent Non-Executive Directors and the CEO, and
therefore met the requirements of the UK CGC. However,
since David Wells, who chairs the Committee, was appointed
Chair of the Board in December 2021, he is excluded from the
independence calculation. Therefore, the composition of the
Committee no longer meets the requirements of the UK CGC.
The Committee will continue to review its composition and
that of the other Board Committees to ensure there is an
appropriate balance of skills, experience and independence.
Wise Annual Report and Accounts 202268
Governance
Principle or Provision Status of compliance
Provision 20 (use of an external search
consultancy for the appointment of the
chair and non-executive directors)
An explanation of our approach to the appointment of Non-Executive Directors
can be found on pages 80 and 81.
Provision 23 (policy on diversity
and inclusion)
The annual report should describe the work
of the nomination committee, including the policy
on diversity and inclusion, its objectives and linkage
to company strategy, how it has been implemented
and progress on achieving the objectives.
Wise has not adopted a formal policy on diversity and inclusion.
When considering new appointments to the Board, the Nomination Committee
works with our Head of Leadership and Executive Recruitment to review
requirements for the role and agree a search strategy in line with the Board
succession planning policy. Diversity and inclusion practices are embedded
into our search process to ensure that we build a diverse Board with different
ideas, skill sets and backgrounds.
The Board recognises the requirement of having a formal policy in place and
the Nomination Committee will work to ensure one is adopted during FY2023.
For more information on Board diversity and the selection process for
new Non-Executive Directors please refer to the Nomination Committee
Report on pages 79 to 81.
Provision 32 (under Remuneration)
The Chair of the Board can be a member
of the remuneration committee but can not
chair the committee.
Before appointment as chair of the remuneration
committee, the appointee should have served on
a remuneration committee for at least 12 months.
For the period from 01 December 2021 to 31 March 2022, David Wells served
as Chair of both the Board and the Remuneration Committee. David acted
as Chair of both for an interim transitional period only and has since been
replaced by Clare Gilmartin as Chair of the Remuneration Committee.
Upon her appointment on 1 April 2022, Clare Gilmartin had not served
on a remuneration committee for at least 12 months. She will meet the
requirement of 12 months service during the next financial year.
Provision 34 (under Remuneration)
Remuneration for all non-executive Directors
should not include share options or other
performance-related elements.
Prior to Admission and in the context of the Group being privately owned,
legacy incentive plans were operated in which the non-executive Directors
held share options. In order to avoid any impairment of the independence
of the directors, the options were vested with effect from Admission.
Consequently, David Wells and Ingo Uytdehaage hold options under
these legacy arrangements over Class A Shares, with these options being
fully vested. Further detail can be found in the Directors’ Remuneration
Report on page 90 to112.
No grants of share options or performance-related remuneration have been
made to the Non-Executive Directors since Admission, nor they will be made
in future years.
Wise Annual Report and Accounts 2022 69
Principle or Provision Status of compliance
Provisions 36 to 41 (under Remuneration)
Since Admission, we have developed a remuneration policy which is
consistent with the Group’s purpose, culture and the scale and scope of
business operations, and that it supports the business strategy and growth
objectives and captures requirements under the UK prudential regime for
investment firms. We will formally seek shareholder approval of the proposed
Remuneration Policy at the first AGM taking place in September 2022.
The Remuneration Policy aims to provide competitive total remuneration
packages that are focused on alignment with the interests of our owners and
long-term success through the use of share-based incentives, and is designed
to comply with, amongst other considerations, provisions 36 to 39. For clarity,
we have complied in practice with provision 38 (relating to executive director
pensions) and provision 39 (relating to director notice or contract periods)
during the year. However, compliance with these provisions is formalised
in the Remuneration Policy.
As a newly listed company, we are building our employee engagement
strategy in relation to Executive Director compensation. At the time of
publication of this report, the Committee has not yet formally engaged
with employees on Executive Director remuneration but an engagement
plan is being built to ensure sufficient time is allocated to focus on these
matters and consultation will be carried out in the event that any significant
changes to Group remuneration and employment policies are proposed.
Employee engagement activities that are due to be carried out in FY2023 will
be reported on in our next annual report. With the exception of the employee
engagement strategy, as referred to above, the new Directors’ Remuneration
Policy to be presented to shareholders for approval at the AGM has been
designed in compliance with the factors set out in Provision 40.
A description of the work of the Remuneration Committee as required by
Provision 41 (with the exception of reference to employee engagement
activities, as explained above) along with more detail on the development
of the Remuneration Policy and the policy itself, can be found in the
Remuneration Report on pages 90 to 112.
Corporate governance statement continued
Wise Annual Report and Accounts 202270
Governance
Board activities and principal decisions.
Role of the Board
The Board is collectively responsible for establishing and
upholding the Wise mission, its values and strategy. Together,
they oversee Wise and set its strategic direction, with the goal of
continuing to deliver value for all stakeholders in the long-term.
The Board operates within a formal Schedule of Matters Reserved
and Terms of Reference. Other powers are delegated to the
various Committees and to the Senior Leadership Team (SLT) or
via the Group delegation of authority policy. Terms of Reference
for each of the Board’s Committees are available on our website:
https://wise.com/owners. The delegation of authority policy is
available to all employees on our internal intranet.
Full details of the Board Committee responsibilities are set out
in the respective Committee reports on pages 79 to 112.
The Board is committed to maintaining the highest standards
of corporate governance and has collective responsibility for
promoting the long-term success of Wise. We are accountable
to stakeholders for ensuring that Wise is appropriately managed
and achieving strategic objectives, in a way that is supported
by the right culture, values and behaviours at all levels. The
Board is responsible for ensuring that management actions
are aligned to strategy and that stakeholder interests are taken
into consideration. As such, the views of stakeholders form
an essential component of the Board’s decision-making.
To ensure that high standards of corporate governance are
met, each year the Chair holds a number of meetings with
the Non-Executive Directors without executive management
present. These meetings are useful to safeguard the
independence of Non-Executive Directors by providing
them with the opportunity to discuss their views in a more
private environment.
Board leadership and company purpose
All Directors also have access to the advice of the Company
Secretary, who is responsible for advising the Board on all
governance matters.
Full details about our governance structure are set out
onpage 60.
The Board’s agenda in FY2022
During the year, the Board focused on our strategic direction, the
listing and the establishment of a robust governance framework.
Meeting agendas were agreed in advance by the Chair, CEO
and Company Secretary and comprised a balance of standing
items, such as growth, financials, subsidiary updates and regular
deep dives.
The Board’s focus can be categorised under the following
themes:
• Strategy
• Operations
• Performance
• Governance
• Culture
When making decisions the Board must sometimes balance
conflicting stakeholder concerns. The Board acknowledges that
every decision it makes will not necessarily result in a positive
outcome for all stakeholders. However, by considering Wise’s
mission together with its strategic priorities and decision-making
process, the Board aims to ensure that its decisions are in the
best interests of Wise.
Wise Annual Report and Accounts 2022 71
Board leadership and company purpose continued
A summary of major discussions held and decisions on each of the Board’s focus areas is set out below:
Matter and outcome Consideration and benefits Stakeholder
Strategy
Listing
The listing of Wise on the
London Stock Exchange
The decision was supported by an assessment of how the listing would benefit and
impact our stakeholders, while also considering the alignment with our mission.
The consensus was that the listing would align ownership and the Wise mission by
bringing customers into our owner base.
We also agreed that we would become public in a way that is transparent and fair.
By doing a direct listing, we ensured that everyone got the same opportunity to own
a part of Wise.
As part of the listing preparation there was significant input and challenge from
the Board and also advisers on our strategy and how we communicate this to all
stakeholders. Ultimately the Board decided to approve the Prospectus and our
analyst presentation which resulted in a clear communication of the strategy
to all stakeholders.
Performance and
strategy discussions
Since the listing the Board has had regular updates on ”Owner Relations” providing
insights from shareholders relating to our strategy. The Board also discuss growth
performance on a quarterly basis. This informs the Board on progress the teams are
making in the context of our strategy and gives confidence that Wise is focusing
resources in the right areas.
In February, the Board also held a strategy discussion which led to a strategy review
process that will continue into FY2022. These discussions frame how the Board
discusses and reviews strategy at Wise.
Customer Share Giveaway
Shares were awarded to
approximately 2,000 of
Wise’s most active
customers
In making this decision, the Board considered the ways in which the listing could be
meaningful to customers and the benefit to Wise of having a customer voice in our
owner base.
OwnWise
The launch of our customer
shareholder programme
designed to reward eligible
customers of Wise
The Board agreed that OwnWise would increase customer advocacy, by giving our
customers a sense of ownership in Wise. This would bring the voice of customers
into the owner base, complementing the aims of the Customer Share Giveaway.
Operational
The Group reorganisation
The restructure of the
Group, to include the
addition of holding
companies to hold the
subsidiaries, which was
completed on 22 June 2022
The Board considered a group structure that would be optimal for a growing global
organisation, taking into account both tax efficiency and meeting regulatory
requirements and employee interests.
The dual-class share
structure
The creation of our
dual-class share structure
This was considered to be the best way to keep long-term focus on the mission
as this structure enhances the voting control of certain pre-listing shareholders
who have elected to receive Class B Shares, including Directors, senior managers,
employees and their respective affiliates, while ensuring that the CEO can provide
continuity and stability through to 2026 and our team can focus on our mission over
the long-term.
Delegation of authority
The delegation of authority
to the CEO and CFO who
can in turn sub-delegate to
their reports
It was agreed that it would be more efficient for the Board to delegate authority
for the day-to-day management of Wise to the CEO and CFO who in turn would
delegate this authority to the business. This would have a positive impact for
employees, enabling efficient decision-making, and for our suppliers, who
would also benefit from swift decision-making and payment.
Customers
Wisers
RegulatorsInvestors
Communities
Suppliers
Wise Annual Report and Accounts 202272
Governance
Matter and outcome Considerations and benefits Stakeholder
Governance
The CEO’s inclusion on
Her Majesty’s Revenue &
Customs (“HMRC”) list of
deliberate tax defaulters
Finding that the CEO
remained fit and proper
for his role (as per the
Financial Conduct Authority
(“FCA”) definition)
Following the inclusion of the CEO’s name in a list of ‘deliberate defaulters’ by HMRC
in September 2021, the Board met several times to discuss the matter, requesting and
reviewing relevant information and documents provided by the CEO and his advisers
over this time.
After reviewing this information and these documents, obtaining legal advice and
considering the matter in detail, the Board required the CEO to undertake certain
remedial actions, including appointing professional tax advisers to ensure his personal
tax matters are appropriately managed. The Board concluded in Q4 2021 that the
CEO remained fit and proper to perform his roles, and shared details of its findings,
assessment and actions with the FCA.
In relation to this matter, the FCA has commenced an investigation regarding the
regulatory obligations and standards to which the CEO is subject. Both the CEO and
the Company intend to cooperate fully with the FCA in relation to its investigation.
Change of Chair
David Wells succeeding
Taavet Hinrikus as Chair
of the Board
The Board agreed that for an effective board it was necessary to have in place
an independent Chair who would be able to provide oversight and experienced
leadership to the Board. Wise is now compliant with the Code in this regard.
Appointment of three
additional Independent
Non-Executive Directors
The Board approved the
appointment of Hooi Ling
Tan, Clare Gilmartin and
Terri Duhon
The addition of experienced Directors would benefit the Group by bringing their
different skills, experiences and insight.
Adoption of the UK CGC
Adoption of the UK CGC
to ensure high standards
of governance
Given our standard listing we are not obliged to comply with the UK CGC. However,
the Board recognised the importance our stakeholders placed on good governance
and decided that it was appropriate to voluntarily adopt the UK CGC. Further detail
on the status of our compliance with the UK CGC can be found in our Corporate
Governance Statement from page 63.
Culture
Code of Conduct
Adoption of a formal Code
of Conduct
The Board reviewed and approved the adoption of a formal Code of Conduct
for employees. The Code of Conduct reflects the Company’s core values and
transparent culture.
Whistleblowing
Adoption of a whistleblowing
policy and establishment
of an independent line
of communication for
whistleblowing claims
The Board believes it is in the best interests of its employees and business to
have a fully transparent, fair and independent way to voice concerns. The Wise
whistleblowing policy is supported by an independent reporting hotline and an
online portal. The Board and ARC receive regular updates on whistleblowing data
and trends from the General Counsel.
Review of Assurance
teams experience at Wise
Support for the work of
assurance teams.
Following the departure of key members of the People, Risk, Finance and Legal teams,
the Board commenced a review to determine if there was a common root cause.
The conclusion of this review was that more effective onboarding for these teams,
and more vocal support for their work, was required from the CEO and Senior Leadership
Team (SLT). The review refocused efforts on hiring for key roles in these teams.
Wise Annual Report and Accounts 2022 73
Board leadership and company purpose continued
Division of responsibilities.
Roles and responsibilities
There is a clear division between executive and non-executive
responsibilities. The roles of the Chair and CEO are not held by the
same person and their responsibilities are well defined and set out
in writing in the Division of Responsibility Statement which is
available on our website at www.wise.com/owners.
A summary of the roles and responsibilities of each of our Board
members is set out below:
Chair
• Provide effective leadership of the Board and promote a high
standard of governance
• Set a Board agenda that is forward looking and reflects the
important issues facing the Group
• Lead the Board in overseeing management and provide
support for the CEO and Senior Leadership Team (SLT)
• Lead the evaluation process for the Board and
Board Committees
Board membership changes
Board journey
During the 2022 financial year, there were several changes to the Wise Board, as a result of our transition from a private to a publicly
listed company. For part of the year, Wise Payments Limited’s (our principal subsidiary) board and committees (i) provided us with
our initial Directors; and (ii) assisted us in identifying additional Independent Non-Executive Directors.
These changes are set out in the table below:
Director Date of appointment Date of resignation Former Wise Payments Limited Director
Dean Graham Nash 30 April 2021 18 June 2021 No
Taavet Hinrikus 18 June 2021 8 December 2021 Yes
David Wells 18 June 2021 – Yes
Ingo Jeroen Uytdehaage 18 June 2021 – Yes
Alastair Michael Rampell 18 June 2021 – Yes
Kristo Käärmann 28 April 2021 – Yes
Clare Elizabeth Gilmartin 18 June 2021 – No
Hooi Ling Tan 19 June 2021 – No
Matthew John Briers 18 June 2021 – No
Terri Lynn Duhon 1 January 2022 – No
Chief Executive Officer
• Manage the Group on a day-to-day basis within the authority
delegated by the Board
• Develop strategy, plans and objectives for review by the Board
• Lead the Senior Leadership Team (SLT) in ensuring that Board
decisions are implemented and that significant decisions made
by the Senior Leadership Team (SLT) are communicated to
the Board
• Promote a Group culture that fosters a prudent, safe and
sound business
Chief Financial Officer
• Support the CEO in establishing strategy
• Establish the annual operating plan
• Lead the Finance and Legal functions
• Be responsible for financial reporting and for ensuring
effective process and controls
Non-Executive Directors
• Oversee, assess and challenge the delivery of strategy
• Review and oversee performance of management
• Approve the Group’s performance, risk profile
and risk appetite
• Consider the interests of the Company’s stakeholders
Wise Annual Report and Accounts 202274
Governance
Prior to Group reorganisation and Listing
Immediately prior to 18 June 2021, our Board comprised Kristo
Käärmann (CEO) and Dean Nash (Former General Counsel &
Group Company Secretary). In preparation for the listing and the
Group reorganisation, it was agreed that it would be in the best
interests of the Group to appoint the existing Directors of Wise
Payments Limited, our principal subsidiary, as Directors of Wise
plc. On 18 June 2021 Dean Nash resigned as a Director of the
Company and Taavet Hinrikus, David Wells, Alastair Rampell,
Ingo Uytdehaage and Matthew Briers were appointed
to the Board.
Subsequently, David, Alastair and Ingo resigned as Directors
of Wise Payments Limited. In order to further enhance our
Board, Clare Gilmartin and Hooi Ling Tan were also appointed
as Independent Non-Executive Directors of Wise plc on 18 June
2021. The decision to appoint Clare and Hooi Ling had been
made prior to the decision to list and was overseen by the then
Board and Nomination Committee of Wise Payments Limited.
Post Listing
The Nomination Committee oversaw the appointment of Terri
Duhon as an additional Independent Non-Executive Director
on 1 January 2022.
Independence
As at 31 March 2022, 62.5% of our Board is comprised of
Independent Non-Executive Directors, and we are therefore
compliant with provision 11 of the UK CGC. The Board
considered such Directors to be independent in character
and judgement and free from relationships or circumstances
which may affect, or could appear to affect, the Director’s
independent judgement.
One of our Non-Executive Directors, Alastair Rampell, is not
considered independent under the UK CGC. However, given
Alastair’s prior tenure on the board of Wise Payments Limited,
it was believed to be in the best interests of the Company for
him to be appointed to our Board along with David and Ingo,
who were the Wise Payments Limited Independent Non-
Executive Directors.
The Chair
The UK CGC recommends that the Chair be an Independent
Non-Executive Director. Prior to listing, it was agreed that
Taavet Hinrikus would remain on the Board as Chair to assist
the Company with its transition to public life. It was further
agreed that following listing, Taavet would step down and that
the Senior Independent Non-Executive Director, David Wells,
would be appointed as Chair in his place. Subsequently, Taavet
resigned as Chair on 8 December 2021 and was succeeded by
David. Taavet was not involved in the selection or appointment
of David as his successor. David also abstained from voting on
this matter.
Directors’ oversight of governance
Conflicts of interest
All of our Non-Executive Directors have significant experience
in their fields and hold other roles outside of Wise. Controls are
in place to ensure that suitable arrangements are made where a
Director’s external position or personal financial interests could
come into conflict with their duties as a Director of Wise.
In accordance with the Companies Act 2006, the UK CGC and
the Company’s Articles of Association, Wise has a conflicts of
interest policy in place to ensure that all Directors adhere to
the highest standards.
Our conflicts of interest policy requires all Directors to report
any potential or actual conflicts to the Company Secretary
immediately when they become aware of such situations and to
complete a ‘declaration of interest’ form. The actual or proposed
conflict will be presented to the other Board members for their
authorisation, where appropriate.
In deciding whether to authorise a conflict or potential conflict
of interest only non-interested Directors (i.e. those who have
no interest in the matter under consideration) will be able to
participate in the relevant decision. In making the decision, the
Directors must act in a way they consider, in good faith, will be
most likely to promote the success of the Company. In addition,
the Directors may impose conditions or limitations when giving
authorisation if they deem it to be appropriate.
The Board is confident that the appropriate checks and balances
are in place to identify and manage potential conflicts of interest.
Wise Annual Report and Accounts 2022 75
External appointments
All Directors are expected to dedicate sufficient time to
discharge their responsibilities to Wise and this is a condition of
accepting the role of Director. The Board takes into consideration
any external commitments that arise during the year. Any new
appointments are notified to the Chair in advance of accepting
the appointment and a determination is made as to whether
it will impact the Board or give rise to a potential conflict
of interest.
Related party transactions
In line with the principles of good corporate governance,
Wise has a related party transactions policy and relevant controls
in place to ensure all transactions and arrangements undertaken
are and continue to be in the best interests of the Company.
Further information on Related Party Transactions throughout
the financial year can be found in the Notes to the Group
Consolidated Financial Statements on note 23 page 153.
Directors’ indemnities and insurance
In accordance with our Articles of Association and to the
extent permitted by law, Directors are granted an indemnity
from the Company in respect of liability incurred in their capacity
as Directors, which remain in force at the date of this report.
We also maintain a Directors’ and Officers’ liability insurance
policy. Neither our indemnity nor the insurance provided cover
liability incurred where a Director has acted negligently, in
default, in breach of duty or in breach of trust in relation to Wise.
Election of Directors
In accordance with our Articles of Association and the UK CGC,
all Directors will be required to retire and put themselves forward
for election at our AGM in September.
Along with the summary of experience and skills of our Directors
contained on page 77, the Notice of AGM will also set out why
the Board believes the Directors should be elected.
Director interests
See below for a summary of interests in shares held by Directors who served during the FY2022 financial year, including the
shareholdings of their connected persons.
1
More detail can be found in the Remuneration Report. There are no performance related
share interests in place. With the exception of Matthew Briers, there have been no changes in the shareholdings of the Directors from
31 March 2022 to the date of this report.
2
Director
Total number of interests in
shares (number of shares)
Unvested
options/RSUs
over A Shares
Vested options over
A Shares Persons connected
Total interests
(number of shares)
Kristo Käärmann 186,078,489 A Shares and
186,022,590 B Shares
0 0 779,766 A Shares and
779,766 B Shares
186,858,255 A Shares and
186,802,356 B Shares
Matthew Briers 184,273 A Shares 853,138 RSUs &
590,928 options
1,114,958 0 2,743,297 A Shares
David Wells 0 0 923,000 239,616 A Shares 1,162,616 A Shares
Terri Lynn Duhon 0 0 0 0 0
Ingo Uytdehaage 0 0 572,000 0 572,000 A Shares
Hooi Ling Tan 96,720 A Shares 0 0 0 96,720 A Shares
Clare Gilmartin 96,720 A Shares 0 0 0 96,720 A Shares
Alastair Rampell 0 0 0 88,424,920 A Shares
and 28,216,214 B Shares
88,424,920 A Shares and
28,216,214 B Shares
Taavet Hinrikus
3
0 0 0 93,616,498 A Shares and
53,966,926 B Shares
93,616,498 A Shares and
53,966,926 B Shares
Dean Nash
4
0 268,138 121,862 0 0
1. As at 31 March 2022 (or the date they stepped down from the Board, if earlier).
2. As at 28 June 2022, Matthew Briers holds 210,005 shares, 796,250 RSUs, 531,830 unvested options and 1,174,046 vested options.
3. Taavet Hinrikus stepped down from the Board on 8 December 2021. As at 31 March 2022, he held an interest in 89,851,160 A Shares and 53,966,926 B Shares.
4. Dean Nash stepped down from the Board on 18 June 2021. As at 31 March 2022 he held 98,750 options.
Board leadership and company purpose continued
Wise Annual Report and Accounts 202276
Governance
Composition, succession and evaluation.
BAME representation on our Board Average age of Executives
45
Gender diversity on the Board
Board independence Board average tenure (months)
39
*
Non-Executives on the Board
Skills matrix
We believe that the background, experience and skill sets of the Directors are well-balanced, ensuring effective contributions,
decision-making and accountability. We believe that the Non-Executive Directors bring the requisite experience to the Board,
being senior advisers to and/or holding senior positions at notable businesses of varying sizes and stages of growth and operating
in various sectors including technology and financial services.
Skills & experience
Kristo
Käärmann
Matthew
Briers
David
Wells
Clare
Gilmartin
Hooi
Ling Tan
Ingo
Uytdehaage
Alastair
Rampell
Terri
Duhon
CEO/business leadership
UK Listed plc
Finance and Accounting
Regulatory Experience
People and Culture
Risk Management
Corporate Governance
Business Ethics
Financial services/Fintech
Global Operations
Audit/Risk Committee
Remuneration Committee
Nomination Committee
12.5% 37.5%
62.5% 75%
* appointment date to Wise Payments Limited or Wise plc, whichever came first.
Wise Annual Report and Accounts 2022 77
Board training and induction
Ongoing training
As a newly public company navigating a complex regulatory
environment, we understand the importance of keeping our
Board up to date with their legal, regulatory and governance
responsibilities, and making sure they are aware of the latest
internal and external developments. We also expect our
Directors to keep their knowledge and skills up to date.
During the year the Board received the following training
and updates:
• Duties under section 172(1) of the Companies Act 2006,
provided by Slaughter and May LLP
• Life as a Listed Company, provided by Linklaters LLP
• The Takeover Code, provided by Linklaters LLP
• ESI Strategy, provided by our General Counsel
• Diversity and Inclusion, provided by our People team
• The UK CGC, provided by the Company Secretary
The Board received a regular Board coverage report which
included updates on:
• Trading and share price
• Media coverage
• Competitors
• Regulatory news
• Upcoming trends
• Fintech sector trends
• Horizon scanning
The Board also had regular briefings with our auditors PwC.
The Company Secretary will work with the Chair on identifying
further deep dive and training opportunities for the next
financial year.
Induction
The Company Secretary oversees a comprehensive induction
programme for our new Directors. Our induction programmes
are tailored to the individual Director and include a suite of
reference documents, online learning and briefings with the
Senior Leadership Team (SLT). Each Director has received a
detailed introduction to our business, how we work and the
market in which we operate.
The Company Secretary provides key corporate governance
training for Directors on topics such as Director’s duties, the
UK CGC, and important internal policies such as our conflicts of
interest, related parties, share dealing and insider trading policies.
The Company Secretary also provides a general introduction to
the Board and any relevant Committees for new Directors.
The SLT also provide a tailored briefing on each business area,
covering our mission and strategy, products, customers, people,
operations, how we manage our risks and how we remain
compliant. Each Director also receives recent Board and
Committee materials, financial reports and relevant policies.
Depending on previous knowledge and experience, additional
sessions are made available to dive deeper into specific topics
as required.
Board evaluation
An internally facilitated evaluation of the effectiveness of
the Board, its Committees and the Chair took place during
March and April 2022. The evaluation was conducted through a
combination of an online questionnaire and interview with the
Company Secretary. Questions covered the following areas:
• The purpose and role of the Board
• Strategy and culture
• Stakeholder engagement
• Risk management
• Board governance
• Leadership, membership and group dynamics
• Director self-assessment
The evaluation concluded that the Board, its Committees
and each of the Directors were effective. Opportunities for
improvement focused on:
• The addition of a further Independent Non-Executive Director
to the Board, which will be progressed by the Nomination
Committee during the next financial year.
• Increased focus on the customer by the Board. At the May
2022 Board meeting a live interview was conducted with
a customer on his experience with Wise.
• Further alignment between the Board and management on
how culture is to be monitored and assessed by the Board.
A formal workforce engagement plan will be implemented
during the next financial year.
• Enhancements to meeting papers.
The Nomination Committee will consider whether the next
evaluation should be externally facilitated.
Composition, succession and evaluation continued
Wise Annual Report and Accounts 202278
Governance
Nomination committee report.
David Wells
Chair of the Nomination
Committee
Dear Wise Owner,
I am pleased to present our first Nomination Committee
(“NomCo”) Report, covering the period from listing
to 31 March 2022.
The NomCo was formed on 18 June 2021, just prior to listing, and
since its formation has made significant progress on expanding
the skills, capability and diversity of our Board. Prior to listing, the
composition of the Wise Payments Limited Board was reviewed
and a decision was made to hire two additional Independent
Non-Executive Directors – Clare Gilmartin and Hooi Ling Tan.
On listing we had a 50% independent Board. Following the
resignation of Taavet Hinrikus as Chair and Director in December
2021, and the appointment of Terri Duhon as an Independent
Non-Executive Director in January 2022, we now have a
majority independent board, in line with the UK CGC. The
newly appointed Directors bring much valued experience,
skills and diversity to the Board.
In addition to building an independent Board, the Committee
was focused on building strength and resilience in the Senior
Leadership Team (SLT), and has commenced a rigorous review
of succession planning in this area.
Membership
The Committee is chaired by David Wells and its other members
are Independent Non-Executive Director, Hooi Ling Tan and our
CEO, Kristo Käärmann.
Members of the People team also attend meetings by invitation
and provide support to the Committee as needed. The Group
Company Secretary acts as Secretary to the Committee. Following
each meeting the Chair provides an update to the Board.
Member
Number of scheduled
meetings attended
David Wells (Chair) 3/3
Hooi Ling Tan (Independent NED) 3/3
Kristo Käärmann 3/3
Board of Directors pre- and post-listing
Prior to listing, the Nomination Committee of Wise Payments
Limited oversaw and recommended the appointment of Clare and
Hooi Ling to the Board of Wise plc. Clare and Hooi Ling joined
the Board shortly before listing, along with Ingo Uytdehaage
and Alastair Rampell, both Directors of Wise Payments Limited.
Taavet stepped down as Chair and Director in December 2021
and David Wells, the Senior Independent Non-Executive
Director, was appointed as his successor by the Board on
8 December 2021.
For more information on Board composition and the
changes made prior to listing please see the Directors’
Report on page 113.
FY2022 key activities
• The Committee oversaw the search and recommended the
appointment of Terri Duhon to the Board and Audit and Risk
Committee on 1 January 2022.
• The Committee recommended changes to Committee
composition. David stepped down from the Audit and Risk
Committee on Terri’s appointment.
Role and responsibilities
As detailed within its Terms of Reference, the
Committee has Board-delegated authority to:
• regularly review the structure, size and composition
(including the balance of skills, knowledge, experience
and diversity) of the Board;
• ensure that appointments and succession plans are
based on merit and objective criteria and, within that
context, promote diversity of gender, social and
ethnic backgrounds, cognitive and personal
strengths; and
• ensure that plans are in place for an orderly
succession to Board and senior management
positions and oversee the development of a diverse
pipeline for succession, taking into account the
challenges and opportunities facing the Company,
and the skills and expertise needed on the Board
in the future.
Nomination committee report
Wise Annual Report and Accounts 2022 79
Nomination committee report continued
• The Committee reviewed and approved the approach to CEO
and Senior Leadership Team (SLT) succession planning and
tracked progress against these plans, in line with the UK CGC
requirement to ensure that plans are in place for orderly
succession to both the board and senior management
positions, and to oversee the development of a diverse
pipeline for succession.
• The Committee reviewed the Company’s progress on
diversity, equity and inclusion.
• The Committee discussed and approved the form of the Board
evaluation conducted during March and April 2022. In May
2022 the Committee reviewed the results of the evaluation
and recommended a number of actions to the Board.
For more information see page 78.
FY2023 focus areas
• Board and Senior Leadership Team (SLT) long-term
succession planning.
• Further review of Board Committee composition.
• Review of the Board’s independence and balance of skills,
knowledge and experience to determine if an additional
Independent Non-Executive Director should be appointed.
• Implementation of a formal Board diversity policy. Diversity
and inclusion practices are currently built into the end to
end search process, details of which are included below.
• Whether an externally-facilitated Board evaluation should
be conducted during the next financial year.
Board diversity and progress
Following the appointments of Clare, Hooi Ling and Terri,
our board is now 37.5% female and the Non-Executive
Director gender split is 50/50.
Board and senior management composition
2021 2022
Board size 8 8
Average age: Executive Directors 45 45
Average age: Non-Executive Directors 43 45
% women Directors: all 25% 38%
% of women Directors: Non-Executive
Directors 33% 50%
% of women Directors: Executive Directors 0% 0%
% BAME Board Directors: all 12.5% 12.5%
% BAME: Non-Executive Directors 16.7% 16.7
% BAME Board Directors: Executive Directors 0% 0%
% of women Executive Directors 0% 0%
% women: senior management* and their
direct reports 50% 53%
* Defined as per the UK CGC
Expanding skills,
capability and
diversity
While we do not currently have a formal Board diversity policy,
diversity, equity and inclusion is built into our leadership and
executive (including Directors’) recruitment framework.
Specific measures that we have taken include:
• Leadership recruiting team training in unconscious bias.
• Awareness training offered to interview teams.
• Standardised processes that are applied equally for
all candidates.
• Clear and objective criteria for selection to mitigate
performance bias.
• Limited requirements for the role to minimise self
selecting out.
• Gender decoder used to ensure neutral language in job
descriptions and any promotional materials.
• Targeted selection to ensure a diverse candidate pipeline.
• Diversity tracking at each stage of the selection process.
• A diverse and representative interview panel on every search.
Selection process for new Non-Executive Directors
When considering new appointments to the Board, the
Committee works with our Head of Leadership and Executive
Recruitment to review requirements for the role and agree a
search strategy in line with the Board succession planning policy.
We have built an in-house leadership and executive recruitment
team who bring extensive experience in executive search, having
worked in both leading global search firms and Fortune 500
companies. Our team uses executive search methodologies
to identify, engage and assess both active and passive talent.
This approach gives us access to more of the market. Our high
touch, candidate experience allows us to manage long-term
candidate relationships and engage directly with the best talent.
Diversity and inclusion practices are embedded into our end to
end search process to ensure that we build a diverse Board with
different ideas, skill sets and backgrounds.
Set out below is an overview of the search and selection process:
• Analysis of business need and current Board composition
to understand the ideal candidate profile.
• Key skills and competencies identified with clear criteria
for selection to mitigate performance bias.
• Target companies, networks, industry bodies and relevant
associations identified.
• Identification, review and targeting
of candidates.
• Competency based interview
and selection process with
a diverse interview panel.
Wise Annual Report and Accounts 202280
Governance
Overview as to how this was put in practice for the most recent Non-Executive Director hire, Terri Duhon
1. Selection criteria
The ideal profile was defined:
Key skills and competencies Required Preferred
Brings diversity of thought and opinion to the Board X
Recent experience serving as a Non-Executive Director on a Risk Committee in an organisation of
comparable size and complexity (FTSE 100)
X
Deep European regulatory and government relations experience. Dealing with the relevant regulatory
agencies/bodies in Europe (EBA, ESMA, EIOPA, ECB, BoE)
X
Risk background (Operational, Financial or Reputational) – Risk/Compliance/Governance/Legal/PR
background
X
Experienced Non-Executive Director (served on multiple Boards) X
Industry experience (FS/Fintech) X
Growth/scale up/innovation experience (ideally working with a Founder-led board) X
2. Search strategy
A search strategy was developed targeting the following
companies and networking groups:
• Financial services and fintech companies of comparable
size & complexity.
• European fintechs
• Innovative, scaled financial services companies in Europe
• Challenger/neo banks
• Payment institutions
• Diverse networking groups and associations e.g. Women
on Boards, Women in Payments, BAME in the boardroom.
• Cranfield Female FTSE report.
3. Interview and selection
After reviewing more than 250 profiles, a long list of 42 was
selected, 76% of whom were female. This long list was reviewed
through a diversity lens to produce a second long list of 24,
96% of whom were female. Our short list was 91% female.
Shortlisted candidates were interviewed by the Chair, Committee
members and Chair of the ARC. The preferred candidate also
met with members of the Senior Leadership Team (SLT),
Company Secretary and external audit partner.
4. Induction
As part of her induction Terri Duhon met with a broad range
of people from across Wise, both virtually and in-person,
including all members of the Senior Leadership Team (SLT).
Specific sessions focused on themes such as ‘People’ and ‘Risk
and Controls’.More information on our induction programme can
be found on page 78.
Director Election (AGM)
In line with the provisions of the UK CGC and the Articles
of Association, all Directors will retire at the forthcoming AGM.
David Wells
Chair
28 June 2022
Wise Annual Report and Accounts 2022 81
Audit and risk committee report
Audit and risk committee report.
Ingo Uytdehaage
Chair of the Audit and
Risk Committee
Dear Wise Owner,
I am pleased to present an overview of our Audit and Risk
Committee (“ARC”) activities and key areas of focus covering
the period from listing to 31 March 2022 (the period).
The ARC was formally constituted on 18 June 2021, just prior
to listing, and we have since established ourselves as central
to the monitoring of internal controls, risk management and
the integrity of financial reporting to ensure owners’ interests
are protected and aligned to sustain long-term growth.
During the year our focus has been on embedding the three
lines of defence model, review and approval of risk related
policies and review and approval of the Group’s Annual
Report and Accounts.
Membership
The ARC is made up of three Independent Non-Executive
Directors. There have been a few changes to Committee
membership during the period, explained below:
Member
Number of
scheduled meetings
attended*
Ingo Uytdehaage (Chair) 4/4
David Wells (Independent NED)** 3/4
Hooi Ling Tan (Independent NED)*** 4/4
Clare Gilmartin (Independent NED) 4/4
Terri Duhon (Independent NED)**** 1/4
* There were also a number of ad hoc meetings held throughout the year.
* * David Wells stepped down as an ARC member on 8 December 2021,
when he became Chair of the Board.
** * Hooi Ling Tan stepped down as an ARC member on 18 March 2022
*** * Terri Duhon joined the ARC on 1 January 2022.
The Committee consists of members that have relevant and
diverse experience in audit and risk, and we were very pleased
to welcome Terri Duhon whose experience further strengthens
the Committee. I would like to thank David Wells and Hooi Ling
Tan for their contribution.
Further detail on the experience and expertise of each member
of the ARC is detailed in the section Board of Directors on
pages 56 to 59.
Role and responsibilities
The ARC has key responsibilities relating to audit
and risk matters for the Group as a whole, including:
• monitoring and assessing the integrity of the
financial statements, formal announcements and
regulatory information in relation to the Group’s
financial performance, as well as significant
accounting judgements;
• reviewing the effectiveness of, and ensuring that
management has appropriate internal controls over,
financial reporting;
• engaging with and reviewing and monitoring the
relationship with the external auditor and overseeing
its appointment, remuneration, independence and
engagement for non-audit services;
• providing oversight of the work of Internal Audit
and monitoring and assessing the effectiveness,
performance, resourcing, independence and
standing of the Internal Audit function;
• advising the Board on the Group’s overall risk
appetite, tolerance and strategy, and the principal
and emerging risks the Group is willing to take
in order to achieve its long-term strategic
objectives; and
• reviewing the adequacy and effectiveness of the
Company’s processes and procedures to manage
risk and the internal control framework, including
the design, implementation and effectiveness of
those systems.
Wise Annual Report and Accounts 202282
Governance
Governance
In order to support the ARC the following Wisers regularly attend
ARC meetings by invitation:
• Head of Compliance
• Chief Financial Officer
• Head of Internal Audit
• General Counsel
• Chief Technology Officer
• Head of Operations
• VP Growth
Representatives from the owners of first line risks also attend
ARC meetings and the ARC is supported by a member of the
Company Secretary team.
As Chair of the ARC, I make sure to meet regularly with
members of the Senior Leadership Team (SLT), the Head of Internal
Audit and our external auditor, PwC. We also make sure to hold
Independent Non-Executive Director only sessions. I also provide
regular updates to the Board on the key discussion points raised
and escalate any matters that I feel are relevant for the Board.
The key activities of the Committee in FY2022
The Committee met four times this year. Three of these
meetings were our regular quarterly meetings and one meeting
was convened to approve our half year financial statements.
Each regular meeting included reviews from our first, second
and third line of defence and updates from our external auditor.
An area of particular focus was the implementation of the three
lines of defence model and the review of its effectiveness.
Summarised below are the key activities of the ARC during
the period:
• Adopted the Terms of Reference for the ARC
• Monitored the implementation and progress of the three lines
of defence
• Reviewed and reported to the Board on the Group’s interim
and year end Financial Statements
• Evaluated adjustments in the financial statements and
judgements made
• Reviewed the planning and communication of the Group’s
Interim results announcement
• Provided oversight of the Financial Position, Prospects and
Procedures workstreams with a focus on safeguarding:
• Approved the Internal Audit plan for the year
• Reviewed, discussed and maintained oversight of PwC findings
in relation to risk, governance and controls impacting the
financial statements and reporting.
We also carried out a review of the ARC’s effectiveness.
The key activities the ARC has prioritised for
FY2023 include
• Reviewing and approving the financial statements for the
FY2022 financial year
• Scrutinising key areas of financial judgement
• Monitoring and overseeing the implementation of the three
lines of defence model
• Reviewing and approving internal audit plans and overseeing
management action plans
• Reviewing the effectiveness of whistleblowing processes
• Reviewing capital and liquidity adequacy
• Monitoring and advising the Board on the regulatory
landscape
• Reviewing and monitoring current and emerging and
geopolitical risks
• Overseeing climate change risk assessments and its effect
on the Group’s risk taxonomy. Providing oversight of
management’s review of the financial impact climate
change risks.
I look forward to meeting you at our AGM, where we will ask you
to vote on the Board’s recommendation to reappoint PwC as our
Auditors and adopt this report.
Ingo Uytdehaage
Chair of the Audit and Risk Committee
28 June 2022
Wise Annual Report and Accounts 2022 83
Audit and risk committee report continued
Activities of the ARC during the period
i) Financial reporting
The ARC is responsible for reviewing the Annual Report and
Accounts and all interim reports during the period. It conducts
its reviews with management and the external auditors.
As part of the review process, the ARC:
• Ensured that there were accurate, timely financial results
and effective implementation of accounting standards
and judgements
• Assessed and ensured there were adequate and accurate
disclosures meeting IFRS requirements on significant matters
which took place in the Group during the financial year
• Reviewed management explanations and approved all key
accounting estimates and judgements
• Reviewed application of accounting policies and processes
• Made recommendations to the Board on the approval of the
Annual Report and Accounts, once they were determined to
be fair, balanced and understandable
Significant areas of financial reporting, critical accounting
judgements and key sources of estimation uncertainty that the
ARC considered relating to the financial statements for the
financial year are detailed in Table 1 below.
ii) Fair, balanced and understandable
The ARC reviewed the content of this Annual Report and
Accounts and concluded that, taken as a whole, it is fair, balanced
and understandable and provides the information necessary for
shareholders to assess Wise’s position, performance, business
model and strategy.
In arriving at this conclusion, the ARC considered all discussions
it held during the period with management and both the internal
and external auditors, all reports it received and any explanation
and feedback it received on areas where more clarity
was requested.
In the opinion of the ARC, the Annual Report is fair:
• All information necessary for owners’ understanding of
Group strategy and performance was included in the report.
• The financial statements and KPIs presented within the report
are consistent with the messages in the Strategic Report and
statements made by the CEO and Chair of the Group.
In the opinion of the ARC, the Annual Report is balanced:
• Equal prominence has been placed in the front end of the
Annual Report where the Strategic Report and Corporate
Governance Report are included; to the back end of the
Annual Report where the Group’s Consolidated Financial
Statements and Notes are found.
• The message conveyed to the owners throughout the report
is consistent and accurate.
• The required statutory financial accounting in the financial
statements is appropriately balanced against any non-GAAP
adjusted measures reported by the Group.
• All adjusted measures are adequately explained and are
disclosed with appropriate prominence.
• Where strategy and performance are reported, the impact of
both favourable and adverse trends and probable events are
disclosed in a balanced manner.
• Key judgments and significant issues reported in the
Strategic Report and in this Audit and Risk Committee
Report are aligned to key accounting estimates and
judgements found within the financial statements.
• The principal risks presented within the Strategic Report
on pages 42 to 49 are consistent with the Group’s
business operating model and strategy driving the
Group’s financial performance.
In the opinion of the ARC, the Annual Report is understandable:
• The language used throughout the report is easily understood
by the reader.
• All important messages are highlighted and where
abbreviations or specialised terms are used, these
are explained.
• The framework of the Annual Report is clear and presented
succinctly with an easily understood contents page.
• Owners are able to easily locate all relevant information
within the Annual Report and where appropriate for better
understanding, important areas are more concisely reported.
The ARC presented its reviews and opinion to the Board in
order for the Directors to confirm that they consider the Annual
Report and Accounts, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
owners to assess the Company’s position, performance,
business model and strategy.
Within the Directors’ Report on page 113, the Directors explain
their responsibility for preparing the Annual Report and Accounts
and state their opinion.
iii) Risk management and internal controls
Risk management
The ARC has delegated responsibility from the Board, to oversee
the Group’s risk management, internal controls and the work of
the Internal Audit function.
The ARC monitors and reviews the effectiveness of risk
management, through the following activities:
• reviewing the embedding and testing the culture of risk
management across the organisation;
• reviewing regular risk reports from the first line and
second line;
• approval of the compliance monitoring and testing plan; and
• reviewing resourcing in the second line teams.
In doing so,the ARC relies on regular reporting by the First Line,
Risk Management, Compliance and Internal Audit teams.
The ARC’s primary focus for FY2022 has been the following:
• overseeing the implementation and embedding of the Group’s
Risk Management framework. It assessed and reviewed the
progress made against individual milestones and ensured
the model was articulated and aligned across the Group
in a coherent and consistent manner;
• reviewing and monitoring of the Group’s principal and
emerging risks and risk appetite. The ARC reviewed
management updates on the Group’s risk taxonomy,
identified areas requiring development and questioned
management on how this would be achieved;
Wise Annual Report and Accounts 202284
Governance
• challenging management’s implementation of effective
processes of risk identification, assessment and mitigation;
• monitoring the Group’s most significant risks specifically in
the areas of regulatory and financial crime;
• monitoring the work on ITGC improvement to address
any identified gaps in change and access management
(refer to ‘Internal Control’ below for more information); and
• providing oversight of operational resilience and financial
adequacy relating to capital and liquidity of the Group.
More information on the Group’s risk management framework,
the description of the Group’s principal risks, the procedures
in place to identify emerging risks, and an explanation of how
these are being managed or mitigated can be found in the Risk
management section of this Annual Report on pages 42 to 49.
Internal Audit
To support the Board in its assessment of the effectiveness of
the Group’s internal control processes, the ARC also worked
closely with the Group’s Internal Audit function.
The Internal Audit function’s primary role is to provide
independent and objective assurance of the effectiveness of risk
management, control and governance processes of the Group.
The Head of Internal Audit is a regular attendee at the ARC
meetings, providing regular updates and reports on the progress
of the internal audit plans including internal control issues raised
and management’s actions to remedy the deficiencies. The ARC
reviews and discusses the updates and reports.
The ARC monitors and reviews the effectiveness and
independence of the Group’s Internal Audit function through
the following activities:
• Approval of the Internal Audit Plan for FY2022, including
coverage of key risks and business activities;
• Reviewing internal audit report findings which includes overall
rating as to the status of the area being audited, rationale for
the rating, actions to be taken by management and the
specified timetable;
• Monitoring and ensuring that management appropriately
addressed issues raised by Internal Audit function;
• Overseeing and ensuring that the Internal Audit function
is adequately resourced; and
• Monitoring engagement of Internal Audit with Senior
Leadership and key business stakeholders.
The ARC satisfied itself that the quality, experience and expertise
of the Internal Audit function is appropriate for the business.
The Internal Audit function adheres to The Institute of Internal
Auditors’ mandatory guidance, which has been adopted into the
function charter and methodology.
The Internal Audit function meets regularly with Senior
Leadership and draws on the expertise of the teams across the
Group functions and geographical locations. This ensures that
it maintains a current understanding of key business activities,
risks and control developments sufficient to execute relevant
assurance activities. Further, the Head of Internal Audit meets
regularly with the Chair of the ARC, independent of
management, as well as with the external auditors.
The Internal Audit function completed reviews of key risk areas
and made recommendations to management to remediate
identified control gaps. The ARC monitors the ongoing
remediation of the control gaps.
Internal Control
The ARC completed a review of the effectiveness of the Group’s
system of internal control, including risk management, for the
current financial year.
The effectiveness review included an assessment of the Group’s
risk management system currently in place, the examination of
the Group’s methods of identification of principal and emerging
risks, assessments of the quality and completeness of the internal
audit plan, the Internal Audit function’s level of engagement with
various business areas and management’s efficiency in closing
outstanding issues in a timely manner.
As it related to internal controls over financial reporting,
management is responsible for establishing and maintaining
adequate internal controls over financial reporting. These
are designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external reporting purposes. The financial
reporting internal control system covers the financial reporting
process and the Group’s process for preparing consolidated
accounts. The framework includes controls that operate that
promote effective risk management and overarching governance
exercised by the Board(s), at the subsidiary and Group levels.
It further includes policies and procedures which require
the following:
• the maintenance of records that, in reasonable detail,
accurately and fairly reflect transactions including the
acquisition and disposal of assets;
• reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with International Financial Reporting Standards;
• reasonable assurance regarding the prevention or timely
detection of unauthorised use of the Group’s assets; and
• controls and procedures around the approval of the
Group’s Financial Statements.
Lastly, the Wise Disclosure Committee oversees the reporting
processes to meet our obligations under UK listing and related
regulations. The integrity of disclosures is underpinned by
structures and processes within the Group Finance and Group
Risk functions that support rigorous analytical review of financial
reporting and the maintenance of proper accounting records.
The ARC reviewed management’s actions and progress to
remedy any failings or weaknesses identified through the
operation of our framework of controls.
In particular, during the year it was determined that the control
environment associated with IT access and change management
required significant improvements, specifically in the design and
operation of controls for granting and monitoring user access
and developing and deploying changes to, key systems
and supporting infrastructure.
Wise Annual Report and Accounts 2022 85
Audit and risk committee report continued
In response, during the financial year Management has been:
• Reviewing and redesigning identity and access management
processes, specifically related to provisioning and
recertification of user access across key systems and
underlying infrastructure. Where excessive rights have been
identified, comprehensive reviews have been performed to
determine if access had been misused during the period;
• Implementing additional measures to enforce robust
segregation of duties, through automated controls
where possible, to reduce the risk of error or fraud;
• Implementing additional monitoring processes to identify
unauthorised or potentially suspicious activities; and
• Enhancing security measures within our product change
lifecycle, improving testing and approval controls within
change management.
• Areas for improvement that Management will continue to
focus on include further reducing sensitive access privileges
and evolving the monitoring processes to identify
unauthorised or potentially suspicious activities.
• Management has also undertaken a detailed testing as follows:
• Performed a comprehensive assessment of access rights
across high risk functions and significantly reduced the
number of users with these accesses;
• Performed a detailed review of operational losses recorded
in the audit period to assess if the material internal fraud
occurred; and
• Performed a detailed review of other possible fraud indicators
to identify if any unauthorised changes were made to data
which could impact the reliability of financial reporting.
• Lastly, several areas for improvement were noted in our
regulatory compliance programmes related to Safeguarding
and Financial Crime, which Management has started to address.
The ARC will monitor the completion of these activities to
ensure the appropriate controls are implemented to comply
with all relevant laws and regulations.
The ARC has considered the results of their ongoing
assessment as described above, and evaluated the results of
substantive testing undertaken by Management as a result of
identified control weaknesses. The ARC has communicated the
results of its assessment of the company’s risk management
and internal controls systems to the Board of the Group.
Taking into account the completed and ongoing remediation
and results of substantive testing.
• The ARC recommended to the Board of the Group that the
annual financial statements are fairly presented.
The statement by the Board can be found within the Corporate
governance statement on pages 63 to 70 of the Annual Report.
iv) External audit
External auditor
The ARC oversees the Group’s relationship with its external
auditor, PricewaterhouseCoopers LLP (“PwC”), ensuring
objectivity, independence and effectiveness are monitored
on a regular basis.
PwC has completed their first audit of the Company, but
has been engaged by the wider Group since 2016 when the
Wise Payments Limited previously TransferWise Limited) was
incorporated. The Senior Audit partner, Mark Jordan, has been
in the role since July 2021, the first year of a possible five year
rotation, and remained as Senior Audit partner for the year ended
31 March 2022.
The ARC satisfied itself with the effectiveness of the external
auditor and the external audit process in the following ways:
• The review and approval of PwC’s half-year review plan and
full year external audit plan, including the scope and timing
of the external audit by key audit risk areas, materiality
and proposed fees, ensuring that it was consistent with
the Committee’s view of the scope and quality required
of the audit engagement.
• PwC’s Breaking the Audit Cycle programme was introduced,
which assisted engagement teams in bringing work forward
to flatten working peaks. Additionally, earlier review by
senior members of the engagement team was emphasised.
This, together with a methodical audit plan by PwC,
meant the audit was conducted efficiently.
• Management regularly attended Committee meetings during
which the Committee obtained feedback from management
on their evaluation of the effectiveness of the external auditor.
The Committee discussed and considered the PwC findings
when challenging management in the areas of financial
reporting and risk management.
The ARC maintained oversight of policies relating to safeguards
and measures in place to protect the independence and
objectivity of the external auditor. These included the following:
• PwC provided a letter of independence to the ARC reporting
that it had considered its independence in relation to the
audit and confirmed that it complied with UK regulatory
and professional requirements and that its objectivity
was not compromised.
• The ARC satisfied itself that the External Audit Engagement
Partner has a thorough understanding of the business. The
External Audit Engagement Partner regularly attends the
Committee’s meetings with management and constructively
challenges management on technical, governance and risk
issues. In line with the FRC Ethical Standard, the External Audit
Engagement Partner is rotated every five years. After 5 years,
the External Audit Engagement Partner shall not subsequently
participate in the engagement until a further period of
five years has elapsed. The ARC, together with the Group
may decide under certain circumstances, to extend the
appointment to seven years if it is needed to safeguard
the quality of the external audit in times of change to the
structure of the business.
• During independent meetings held with PwC, the ARC
reviewed the findings of the audit with PwC and discussed
areas PwC identified as being at higher risk of causing material
misstatements in the financial statements.
Provision of non-audit services by the external auditor
Group policy permits the provision of permitted audit related
services and permitted non-audit services, as specified in the
FRC Revised Ethical Standard 2019, by the Group’s auditor,
PwC, with the prior approval of the ARC.
PwC is primarily engaged for the provision of statutory
audit work for the Group and its subsidiaries. However, PwC
occasionally carries out non-audit services for the Group, in
the line with the policy, given its in-depth understanding of
the Wise business and its knowledge of the Group’s operations.
Wise Annual Report and Accounts 202286
Governance
The ARC reviewed every engagement and considered the
following in each review, prior to approval:
• based on its own judgement and management assessment
of the appointment, that the engagement of the external
auditor for the provision of non-audit service to the Group
will not impair the auditor’s independence or objectivity;
• an assessment of all potential external firms with the expertise
to undertake the non-audit service for the Group and if any
conflicts of interest exist between the Group and the
potential external firm;
• the risk that the non-audit service may create conflicts
of interest for PwC; and
• the total fees that would be paid to PwC following any
engagement for non-audit service.
The ARC has implemented a formal set of policies governing the
provision of non-audit services by the Group’s external auditor.
The policies are aligned to FRC guidance and are reviewed
on an annual basis to ensure they remain fit for purpose and
are adhered to by the Group.
The policy for non-audit services includes the following:
• The external auditor is not used where another professional
firm can provide the same or similar service.
• Prior approval must be obtained from the Chair of the ARC
for the engagement of the external auditor for any permitted
audit related services and any permitted non-audit services,
as specified by the FRC Revised Ethical Standard 2019.
The Chair of the ARC will only approve after the ARC has
properly assessed threats to auditor independence and
the safeguards have been applied in accordance with
FRC guidance on ethical standards.
• All services not on the list of permitted audit related services
and permitted non-audit services in the FRC Revised Ethical
Standard 2019 cannot be provided by the external auditor.
Examples of such services include internal audit services,
implementation of information technology, accounting
and bookkeeping services, certain tax services, valuation
and actuarial valuation services.
• Unless the permitted services are required by law or
regulation, Group policy requires that the FRC recommended
non-audit services cap will apply. The total fees for such
services provided by the external auditor are capped at
70% of the average of the fees paid to the external auditor
globally in the last three consecutive financial years for the
audit of Wise plc (the Parent), its controlled undertakings
and of the consolidated financial statements of the Group.
Examples of such services include the review of the interim
financial statements, services in connection with Client Assets
Sourcebook (CASS) audit services, reporting on covenant
and loan agreements and any additional assurance work
or agreed upon procedures, authorised by those charged
with governance, performed on material included within
or referenced from the annual report of an entity relevant
to an engagement.
• Permitted non-audit related services required by law or
regulation are exempt from the non-audit services cap.
Examples of such services include reporting on internal
financial controls when required by law or regulation,
safeguarding assessments carried out by PwC as required
by the FCA and all services which supported the Group’s
listing in order to meet legal and regulatory requirements.
• Group policy places restrictions on the employment
of former employees of the auditor.
During the financial year, PwC were engaged to provide a total of
£399k in non-audit services. These services primarily related
to CASS, safeguarding and other regulatory reporting
required globally.
The ARC concluded that it was in the best interests of the Group
to purchase these services from PwC on the basis that they
were able to provide them more efficiently than an alternative
provider (or, in some cases, they were required to be performed
by the external auditor).
Appointment and re-appointment of the external auditor
Following the recommendation of the Board, PwC was
appointed as auditors on 21 September 2021 to audit the financial
statements of the Group for the year ended 31 March 2022,
and subsequent financial periods. This is therefore the first period
of uninterrupted engagement. PwC’s appointment was overseen
by the ARC.
The ARC ensures that the external audit services contract is put
out to tender every ten years as recommended by the CMA and
in line with existing best practice. It is the intention of the Group
that the next tender will be no later than 2026.
At the forthcoming AGM, a resolution to re-appoint PwC
as the external auditor and to authorise the ARC to set their
remuneration will be proposed. The ARC is responsible for
negotiating and agreeing the statutory audit fee and scope of the
statutory audit. The criteria used by the ARC in auditor selection,
evaluation and re-appointment include the experience and skill
of the auditor, the geographical locations of their network of
offices, their past performance and fees charged.
The Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014 does not
apply to the Company.
Wise Annual Report and Accounts 2022 87
Audit and risk committee report continued
Table 1
Significant matters considered in relation to the financial statements
The ARC assessed the quality and appropriateness of, and adherence to, the Group’s accounting policies and principles. It reviewed whether
the accounting estimates and judgements made by management were appropriate. The significant matters considered by the ARC are set
out below:
Reporting matter Actions taken by the ARC
Valuation of deferred tax
Recognition of the deferred tax asset (DTA) requires an
assessment of the probability of future taxable profit,
based on robust profit forecasts.
The ARC reviewed the DTA recognition methodology which is
based on the core 5 year forecast prepared by management and
approved by the Board, which is also used for the going concern
and viability assessment. The committee challenged management
assumptions around, extending the forecast for an additional year,
the appropriateness of the risk adjustment for years three to six
and concluded they were both reasonable. Therefore the DTA
was appropriately recognised at 31 March 2022.
Going concern and viability
The Directors must satisfy themselves as to the Group’s viability
and confirm that they have a reasonable expectation that it will
continue to operate and meet its liabilities as they fall due.
The period over which the Directors have determined it is
appropriate to assess the prospects of the Group has been
defined as three years. In addition, the Directors must consider
if the going concern assumption is appropriate.
The ARC reviewed reports from management that set out its
view on both the shorter-term going concern and longer-term
viability of the Group. These included:
• considering the duration and appropriateness of the period
over which the assessment has been conducted Reviewing the
Group’s principal risks as set out in the Risk management section
on pages 42 to 49.
• reviewing the Group’s business plan including whether the
identification and description of evidence and assumptions in the
planning scenarios were realistic and relevant, taking into account
factors such as the business climate and macroeconomic factors.
• review of the outputs of the model against the Group’s liquidity
profile, regulatory liquidity and capital requirements and
debt covenants.
• on-going geopolitical situation at the time of reporting.
Having challenged and considered the outcomes of management’s
assessment, the ARC concluded to recommend the Viability
Statement to the Board for approval and considers that related
disclosures are sufficiently clear and transparent.
Alternative performance measures (APMs)
Such measures are considered by the Directors of the Company
as providing a better understanding of Group performance
when read in conjunction with the financial statements
prepared under IFRS.
The ARC reviewed all references to APM within this Annual Report
and concluded that:
• the disclosures were accurate and sufficient for
readers’ understanding;
• there was clarity as to how APM reconciled to the reported
measures under IFRS; and
• APMs were not given greater prominence of disclosure compared
Revenue and other income recognition
Wise Annual Report and Accounts 202288
Governance
Other matters:
Issue addressed by the ARC Actions taken by the ARC
Other income
recognition
The contracts with certain partners contain performance
conditions and milestones, whereby any cash consideration
received up front is deferred until it is probable that these
conditions and milestones are met. Additionally, these
incentives are classified as other income rather than
revenue from contracts with customers.
The ARC challenged management’s
assessment of the probability of achieving
the contractual milestone and was satisfied
with the explanation provided and conclusion
reached with respect to the classification
and recognition of other income.
Contingent
liabilities arising
out of potential
litigations
During the Group’s ordinary course of business, it may be
subject to a number of contingencies arising from litigation
and claims brought by partner operations, governmental
authorities in countries where group subsidiaries operate,
including tax authorities, and customers.
ARC received Litigation Reports from
management on all active and potential
litigation and disputes. The ARC reviewed
and agreed with management’s judgement
of the severity of the issue and probability
of the outcome of the uncertain litigation
event, the existing level of provisions
recognised and management’s assessment
of any additional provisioning needed.
Financial crime
The compliance with regulatory requirements, to ensure that
Wise implements appropriate controls to prevent, and detect
instances where, our platform is being used for money
laundering/financial crime activity.
The ARC reviewed Internal Audit findings,
existing control gaps and management
actions required to remediate any gaps.
The ARC monitored ongoing remediation
to timely completion to achieve necessary
compliance objectives.
Third party risk
management
This third party risk management policy (“TPRM”) summarises
the systems and processes in place to enable Wise to identify,
assess, monitor and report on key risks which arise as
a result of relationships Wise has or proposes to have
with its third parties.
The ARC reviewed and approved the
TPRM, ensuring that it was appropriate
for the business.
Safeguarding
The compliance with regulatory requirements, to ensure that
customer funds are safeguarded and segregated, with relevant
systems and controls. Considering the results and findings
from the safeguarding audits completed during the year.
The ARC considered Internal Audit findings
as well as the results of the external audit
completed on safeguarding and reviewed
management actions on how to deal with
this matter with a global perspective.
Transfer pricing
and tax
strategies
Transfer pricing and tax strategies are updated
and reviewed annually.
The ARC reviewed the transfer pricing
strategy talking into consideration portfolio
and regulatory factors, and tax strategy
looking at tax status per region and risks.
Internal fraud
The development maintenance of a robust control
environment around customer payment processing
to meet Wise’s business, customer and regulatory
objectives, including any developments required.
The ARC reviewed Internal Audit findings,
existing control gaps and management
actions required to remediate any gaps.
The Board also reviewed results of
substantive testing performed to support
assessment of the fair presentation of the
financial statements.
Treasury
(market risk)
An overview of how Treasury works in Wise, and the
difference between treasury product and corporate treasury
how market risk is managed with respect to risk appetite.
The ARC reviewed treasury plans and
approved the risk appetite relating to
interest rate risk, taking into consideration
current circumstances around interest rates.
Wise Annual Report and Accounts 2022 89
Annual statement from the Chair
of the remuneration committee.
Clare Gilmartin
Chair of the
Remuneration
Committee
Dear Wise Owner,
As Chair of the Remuneration Committee, I am pleased to present
our first Directors’ Remuneration Report since our admission to
the London Stock Exchange on 7 July 2021 (Admission).
I want to thank my predecessor, David Wells, for his leadership
of the Remuneration Committee and for his continued support
as a valued member.
This report is divided into three sections:
i. the Annual Statement explaining the approach and
principles that underpin our remuneration approach
at Wise
ii. the Directors’ Remuneration Policy, which sets out our
proposed Policy on the remuneration of our Directors.
The proposed Policy will be presented to shareholders
under a binding vote at the inaugural Annual General
Meeting (“AGM”) on 23 September 2022; and
iii. the Annual Report on Remuneration, setting out the
remuneration outcomes from the period of incorporation
and the proposed remuneration arrangements for the
upcoming year.
Membership and composition
Since Admission, the Committee comprised three Independent
Non-Executive Directors.
Member
Number of
scheduled meetings
attended*
Clare Gilmartin (Chair) 3/3
David Wells
(Independent Non-Executive Director) 3/3
Ingo Uytdehaage
(Independent Non-Executive Director) 3/3
*There were also a number of ad hoc meetings held throughout the year.
Following a review of Committee membership and as previously
announced, Clare Gilmartin was appointed Chair of the
Remuneration Committee on 1 April 2022, succeeding David
Wells who had been Chair since Admission and remains a valued
member of the Remuneration Committee. Clare Gilmartin has
experience of remuneration having served on the Committee
since joining the Board.
Governance
In order to support the Remuneration Committee, the following
are regular attendees at committee meetings:
• Head of Reward;
• CEO; and
• Company Secretarial Manager.
The Committee meets regularly with our advisers and
holds Independent Non-Executive Director only sessions.
No individual takes part in any decision in relation to his or her
own remuneration and no member of the Committee has any
personal financial interest (other than as a Wise shareholder)
in the decisions made by the Committee, nor do they have
any day-to-day involvement in running the business.
Role and Responsibilities
As detailed within its Terms of Reference,
the Committee has Board-delegated authority
on key responsibilities relating to remuneration
matters, including:
• develop the Company’s Policy on executive
remuneration and monitor its ongoing appropriateness;
• determine the remuneration for the Executive
Directors and the senior management plus the
Chair of the Board;
• oversee the remuneration of our wider workforce
and ensure that our Policy for the senior team is
consistently structured; and
• oversee the operation of the Group’s share schemes.
Directors remuneration report
Wise Annual Report and Accounts 202290
Governance
The key activities and decisions of the Committee since
incorporation
• The appointment of remuneration advisors to the
Remuneration Committee.
• Approval of the proposed post-listing Remuneration Policy
that will be subject to a vote at the 2022 AGM.
• Initial review of the wider remuneration arrangements for
the senior management.
• Review of the Committee’s performance since Admission,
its composition and Terms of Reference, as part of the
annual Board evaluation process.
Further detail on the experience and expertise of each member
of the Committee is detailed in the section Board of Directors
on pages 56 – 62.
For more information on the Committee’s Terms of Reference
visit https://wise.com/owners
Context for remuneration at Wise
As a Committee, we are committed to ensuring the Company’s
leadership is motivated to deliver long-term sustainable growth.
The proposed Policy (set out on page 94) is an evolution of the
approach outlined in the Prospectus at listing. Since then, with
our independent remuneration advisers, the Committee has
undertaken a review of Executive Director and Non-Executive
Director remuneration at Wise. This included i) a benchmarking
exercise of UK, European, and US technology and Fintech peers;
ii) a review of relevant legislation, regulation and UK Corporate
Governance Code principles and market practice, and iii)
extensive consultation of both shareholders and management
at Wise. The consultation exercise provided an opportunity
to comment on the Company’s approach to remuneration
and the rationale for the proposed Policy. More detail about
the shareholder consultation exercise is set out on page 93
in this letter.
Our resulting proposed policy is broadly based on four
key principles:
Remuneration principles:
1. We believe it is critical to the delivery of our mission that
we can attract, motivate and retain the very best of global
technology talent. We operate in a highly competitive global
marketplace for talent, comprising publicly listed and private
global Fintech and technology companies as well as traditional
financial services companies, and competition for talent is
intense. It is therefore crucial for Wise to continue to offer
competitive total compensation.
2. We have a long-term mission and are focused on
building long-term sustainable value for shareholders.
Our compensation is weighted towards the long-term
and has a high equity component. Historically we have
not paid annual bonuses at Wise, and do not plan
to in FY2023 for our incumbent Executive Directors,
in line with the approach for our wider employee base.
3. We believe our employees should be shareholders in
Wise to further align their success with all shareholders.
In practice, this means that a substantial component
of our compensation is variable and delivered in shares.
This share-based compensation has been key in hiring
and retaining our key leaders as the Company has evolved.
4. As per our Prospectus, we have completed a comprehensive
review of remuneration arrangements to ensure that the
proposed Policy: (i) is suitable for a UK company with a
standard listing; (ii) complies with the provisions of the 2018
UK Corporate Governance Code; (iii) meets requirements
based on applicable regulations (including the FCA’s
MIFIDPRU Remuneration Code (SYSC 19G)); and (iv) aligns
with general investor expectations. Further information on
our shareholder consultation process can found on page 93.
The proposed Policy is intended to operate for a three-year
period from the 2022 AGM and the Committee is confident
that the proposed approach will support the delivery
of the Company’s key objectives during its initial years
as a public company.
A note on CEO remuneration
It is worth noting that whilst the proposed Policy is designed
to cover all Executive Directors, the CEO has elected to abstain
from both the annual bonus and the Long-term Incentive Plan
and has requested for his salary not to be reviewed for the
term of the proposed Policy. As a significant shareholder in
the Company holding 18.16% of the Class A Shares, it is the
Committee’s view that the CEO is sufficiently aligned to other
shareholders and the long-term success of the Company.
Wise remuneration structure for Executive Directors
The structure has been designed using Wise’s four key
remuneration principles and consists of three components:
Fixed remuneration
Wise Executive Directors have historically had low annual base
salaries. This was relevant for a time when the Company was
private. At the time the CFO was granted shareholdings as part
of their total compensation and the CEO held a large proportion
of founder shares (as above). However, over time, we expect to
transition and offer market competitive salaries at Wise.
We believe it to be appropriate for this transition to take
multiple years, but will start in FY2023 by increasing the
CFO’s salary by 20%.
As referred to above, the CEO’s salary will remain unchanged
for the term of the proposed policy.
Any incoming Executive Directors would be hired at market
competitive salaries.
Pension contributions for Executive Directors are aligned with
the wider employee base in the country where the individual
is based. UK based Executive Directors’ employer contributions
will be 5% of salary or such contribution required by legislation,
subject to alignment with the wider workforce.
Wise Annual Report and Accounts 2022 91
The CEO has elected to abstain from participating in the LTIP
for the duration of the Policy.
Share ownership
Whilst our current Executive Directors already hold significant
shareholdings, as the Policy is designed to cater for the future
it includes share ownership guidelines in line with market best
practice. Executive Directors will therefore continue to be
subject to share ownership guidelines of 300% of base salary,
and this requirement will continue for two years post cessation
of employment.
Implementation for FY2023
Fixed remuneration
As a first step in transitioning to market aligned salaries, the CFO
will receive a salary increase of 20% during FY2023, transitioning
from £280,000 to £335,000. For a workforce with already broadly
market aligned salaries, the average salary increase throughout
FY2022 was 7.53%.
The CEO’s salary, per above, will remain unchanged.
Annual bonus
We do not expect to award an annual bonus in FY2023 to the
incumbent Executive Directors.
Long-term incentive plan (LTIP)
It is intended that an LTIP award of 650% of salary will be
made to the CFO in FY2023, in line with the proposed Policy.
The vesting level of this award will be subject to Relative TSR
performance (vs FTSE 250) and volume growth measures.
The relative TSR performance measure will ensure reward is
linked to superior share price growth, as compared to other
UK listed companies. The volume growth performance measure
ensures reward is linked to growth of customers and transactions,
which in turn has historically led to unit cost reduction and
enabled investment in long-term sustainable value growth.
LTIP award will vest on the third anniversary of the date
of grant to the extent performance conditions over a
three-year performance period are met and subject to
continued employment.
Shares from vested LTIP awards must be held for a further
two years to help ensure that performance delivered over
the performance period is sustainable.
Further details on the intended LTIP grant targets can be found
on page 112.
Directors’ remuneration report continued
The benefits available to Executive Directors will include private
medical insurance and relocation assistance. Where additional
benefits are introduced for the wider employee base, Executive
Directors may participate on broadly similar terms.
Annual bonus
Although we do not expect to award an annual bonus in FY2023
to the incumbent Executive Directors. The proposed Policy
will include the option to award an annual bonus in time,
should the Committee feel it necessary to motivate
leadership or for succession.
The maximum bonus opportunity is capped at 150% of salary
with the target bonus set at 50% of the maximum opportunity.
The measures would be based on a range of financial and
qualitative (e.g. defined strategic, risk, environmental, social and
governance (ESG) measures) performance measures relevant for
the particular performance year. At least 50% of performance
measures would be financial. If bonuses are operated, the
measures and targets will be set annually at the start of
the financial year and will be disclosed retrospectively.
33% of any bonus will be deferred into share-based awards which
will vest after three years, subject to continued employment.
Malus and clawback will apply.
Long-term Incentive Plan (LTIP)
In line with the principle of weighting remuneration towards the
long-term and alignment with shareholder success, the proposed
Policy allows for a maximum LTIP opportunity of up to 650% of
salary in the event of no annual bonus. In a year where an annual
bonus award is made, the maximum LTIP opportunity will be
limited to 500% of salary.
The Committee recognises that this long-term incentive
opportunity level is high in the UK listed company environment,
however this element of the Policy will be used carefully to
ensure that we can compete for the best talent with the skills
necessary to execute on a very ambitious and challenging
growth strategy and pay competitively to the global technology
market in which we compete for talent. This maximum opportunity
also remains lower than opportunity levels offered by some of
our key competitors in international markets.
The LTIP awarded in FY2023 will be based 100% on financial
performance measures, split evenly between relative TSR and
volume growth measures. Going forward (beyond FY2023) at
least 80% of the LTIP forward looking performance measures are
expected to be financial, with any balance being made up of a
mix of risk, strategic and ESG measures. The Committee believes
that our remuneration approach aligns the long-term interests of
executives and shareholders, as the Executive Directors will only
earn maximum incentive opportunity if these challenging
long-term performance measures are met.
Malus and clawback will apply.
Wise Annual Report and Accounts 202292
Governance
Shareholder consultation
In early 2022, we conducted a consultation exercise with
our major shareholders (representing approximately 80%
of our issued share capital) and the key UK proxy advisory
bodies (i.e. ISS, Glass Lewis, The Investment Association).
Many of our shareholders have held shares in Wise since
pre-Admission and are therefore familiar with aspects of our
remuneration structure, culture and mission. However, the
Committee wanted to ensure that shareholders and proxy
advisers were provided with the opportunity to comment
on the Company’s approach to remuneration and the rationale
for the proposed Policy. The Remuneration Committee
considered the feedback received, noting that this was broadly
supportive given the market context and current point in Wise’s
development. No changes were made to the proposed Policy
following the shareholder engagement exercise.
The Committee found the engagement process to be extremely
valuable and we are grateful for the feedback that was shared.
On behalf of the Committee, I would like to thank all those who
engaged with us during this process. We remain dedicated to
continuous and open dialogue with our shareholders and proxy
advisers and look forward to continued engagement on an
ongoing basis. We will also consider any feedback received
at the Annual General Meeting (AGM) and throughout the
year and would welcome any feedback or comments on the
Directors’ Remuneration Report more generally.
All-employee remuneration
The Committee carefully considers the pay and benefits offered
to employees across the whole of Wise, as well as other related
workforce policies and practices.
Our culture and remuneration principles are aligned across
the Company.
Base pay and benefits for all employees at Wise (excluding
Executive Directors as per above) is market competitive.
As stated above, it is our intention to move the CFO’s
salary to a market competitive level over the coming years.
All employees at Wise receive share awards, thereby ensuring
all are motivated to deliver long-term success of the Company
mission, and all are aligned to shareholder success.
As described in the ‘Our people’ section of this Annual Report
on pages 22 to 27, we continue to build on our employee
engagement, our diversity and inclusion initiatives and monitor
our gender pay gap. We are taking steps to establish a workforce
engagement programme, which will be another critical input to
our evolution of remuneration at Wise.
In conclusion
The Committee has crafted a Policy that supports the Company’s
overall mission and will help us to drive long-term success.
Importantly, it helps Wise to attract, retain, and motivate the
talent we need to deliver our mission, within a competitive
global marketplace for talent. Further context on the Company’s
mission and strategy can be found within the Strategic Report
on pages 6 to 15.
I look forward to your support for both the Directors’
Remuneration Report and Directors’ Remuneration Policy
(subject to a binding shareholder vote). If you would like
to discuss any aspect of this Remuneration Report, I would
be happy to hear from you. You can contact me through
the Company Secretary, Jane Fahey. I will also be available
at the Company’s AGM to answer any questions.
On behalf of the Committee and the Board,
Clare Gilmartin
Chair of the Remuneration Committee
28 June 2022
Wise Annual Report and Accounts 2022 93
Directors’ Remuneration Policy
The following section sets out the proposed Directors’
Remuneration Policy, which will be submitted for approval at the
2022 AGM. The Remuneration Committee intends that the new
Policy will operate for three years. This Policy has been designed
to attract, retain, and motivate world-class talent in order to
deliver our mission and long-term sustainable success.
In designing the Policy, the members of the Committee have
brought their experience to bear and have sought independent
advice without management present to ensure that decisions
have been reached objectively and appropriately. Ahead of
submitting the Policy to shareholders, input was collected
from management and external advisers.
This is consistent with our four key remuneration principles:
1. We believe it is critical to the delivery of our mission that
we can attract, motivate and retain the very best of global
technology talent. We operate in a highly competitive global
marketplace for talent, comprising publicly listed and private
global fintech and technology companies as well as traditional
financial services companies, and competition for talent is
intense. It is therefore crucial for Wise to continue to offer
competitive total compensation.
2. We have a long-term mission and are focused on
building long-term sustainable value for shareholders. Our
compensation is therefore weighted towards the long term
and has a high equity component. Historically we have not
paid annual bonuses at Wise, and do not plan to in FY2023
for our incumbent Executive Directors in line with the wider
employee base.
Directors’ remuneration report continued
3. We believe our employees should be shareholders in Wise
to further align their success with all shareholders. In practice,
this means that a substantial component of our compensation
is variable and delivered in shares. This share-based
compensation has been key in hiring and retaining
our key leaders as the Company has evolved.
4. As per our Prospectus, we have completed a comprehensive
review of remuneration arrangements to ensure that the
proposed Policy: (i) is suitable for a UK company with a
standard listing; (ii) complies with the provisions of the 2018
UK Corporate Governance Code; (iii) meets requirements
based on applicable regulations (including the FCA’s
MIFIDPRU Remuneration Code (SYSC 19G); and
(iv) aligns with general investor expectations.
Wise Annual Report and Accounts 202294
Governance
Alignment with Provision 40 of the UK Corporate Governance Code
When developing the Remuneration Policy, the Committee was mindful of, and feels it has appropriately addressed, the following
factors set out in Provision 40 of the 2018 UK Corporate Governance Code:
Clarity
• The Policy is designed to be simple and support long-term, sustainable performance.
• The Policy is in line with UK listed company practice.
• The Policy clearly sets out the elements of remuneration that may be used, the limits in terms of quantum
and the discretions which could be applied if appropriate.
Simplicity
• Our remuneration structures are as simple as possible and market typical, whilst at the same time
incorporating the necessary structural features to ensure strong alignment to performance and
strategy and minimise the risk of rewarding failure.
• The details of each element are clearly set out in the Policy.
Risk
• The Remuneration Policy has been shaped to discourage inappropriate risk taking through a weighting
of incentive pay towards long-term incentives. Additional measures include:
• When considering performance measures and target ranges, the Committee will take account
of the associated risks and liaise with the Audit Committee as necessary.
• Post-vesting holding periods to encourage a long-term, sustainable mindset.
• Enforceable malus and clawback provisions across all variable incentive plans.
• No Executive Director or other member of management is present when their own remuneration
is under discussion.
Predictability
• The potential reward outcomes are easily quantifiable and are set out in the illustrations provided
in the Policy.
• Performance can be reviewed at regular intervals to ensure there are no surprises in outcomes at the end
of the performance period.
Proportionality
• Incentive outcomes will be contingent on successfully meeting stretching performance measures aligned
to the delivery of the Company’s strategy.
• The Committee retains discretion to override formulaic outturns.
Alignment to
culture
• The Policy encourages long-term shareholding, which is aligned with the Company culture and mission.
• Measures used in the variable incentive plans will be selected to reflect the KPIs of the business.
Fixed pay
Base salary
Annual bonus
(malus and clawback
provisions apply)
Base salary
Benefits and
pension
Maximum
opportunity:
150% of salary
Maximum opportunity: 500-650% of base salary
Three-year performance period
Executive Directors are required to build and maintain a 300% base salary minimum shareholding
whilst in employment and for two years post-employment
1/3 in shares
Three-year deferral period subject to continued employment
Two-year holding period
Fixed pay
Benefits and pension
Long-term Incentive Plan
(malus and clawback
provisions apply)
Shareholding requirements
Remuneration elements Year 1 Year 2 Year 3 Year 4 Year 5
Directors’ Remuneration Policy
Wise Annual Report and Accounts 2022 95
Remuneration Policy elements
The following table sets out each element of the Remuneration Policy for the Executive Directors, explaining how each element
operates and links to the corporate strategy, the maximum opportunity and any applicable performance metrics.
Pay element and
purpose clarity Operation Opportunity
Performance metrics, weighting
and assessment
Base salary
To provide a
base level of
remuneration to
attract, retain and
motivate Executive
Directors with
the necessary
experience and
expertise to deliver
the Company’s
strategy.
Normally reviewed annually, with
increases at the discretion of the
Company and the Committee.
When setting base salaries,
the Committee takes into account
a number of factors including
(but not limited to):
• skills and experience
of the individual;
• the size, scope and complexity
of the role;
• salary increases across
the wider workforce; and
• salary levels for comparable
roles in other similarly sized
companies globally.
An out-of-cycle review may be
conducted if the Committee
determines it is appropriate.
Whilst there is no maximum
salary level, salary increases are
normally considered in relation
to wider salary increases across
the workforce.
For the duration of the
proposed Policy post Admission,
salary increases at a level higher
than the average workforce
increase may be necessary in
certain circumstances, such as
where an Executive Director has
been appointed to the Board on
an initial salary which is lower
than the desired market
positioning or where there
has been a change in role
or responsibility.
None.
Benefits
To provide
competitive,
cost-effective
benefits based on
the market in which
the Executive
Director is
employed.
The Executive Directors benefits
are currently aligned to the
wider workforce.
Executive Directors’ receive
benefits which include (but are not
limited to) medical insurance and
other benefits provided more
widely across the Company
from time to time.
Other market standard benefits,
including but not limited to, car
allowance, relocation expenses,
dental insurance, life assurance,
tax equalisation may be provided,
as deemed appropriate by the
Committee. Benefits vary
by country.
In the event that the Company
were to introduce HMRC qualifying
all-employee share plans (or similar
outside the UK), the Executive
Directors may be eligible to
participate on the same basis
as other eligible employees.
The maximum is based on
the cost to the Company
of providing the benefits
described.
If Wise were to introduce HMRC
qualifying all-employee share
plans, participation will be
capped by any HMRC
or other limits applying
to the respective plan.
None.
Pensions
To provide market
competitive
retirement benefits
Contribution to the Company
pension plan or a cash allowance
in lieu of pension.
Pension contributions for
Executive Directors are aligned
with the employees based in the
country where the individual
is based.
UK based Executive Directors’
employer contributions will be
5% of salary, in line with the
wider UK workforce.
None.
Directors’ remuneration report continued
Wise Annual Report and Accounts 202296
Governance
Pay element and
purpose clarity Operation Opportunity
Performance metrics, weighting
and assessment
Annual bonus
To attract,
motivate and
retain high-calibre
Executive Directors
to deliver our
mission and
long-term
sustainable success.
As set out above, the Committee
has not historically awarded annual
bonuses, nor does it plan to in
FY2023. However, in the event that
an annual bonus is considered
relevant at some point in the
future, the Remuneration
Committee would determine
the amount payable after the
year-end, based on performance
against measures.
No more than two thirds of the
annual bonus would be paid out in
cash after the end of the financial
year. The remaining amount would
be deferred into share-based
awards which would vest
after three years, subject
to continued employment.
Any annual bonus, including any
deferred bonus, would be subject
to malus and clawback provisions
as set out on page 100.
Bonus awards would be
non-pensionable.
The incumbent CEO has elected
to abstain from participating in
annual bonus arrangements for the
duration of the Policy. In addition,
no bonus arrangement will be
operated for the incumbent
CFO in FY2023.
The annual bonus Policy
maximum is 150% of base salary.
50% of maximum is achievable
for ‘target’ performance.
In the event that an annual
bonus is operated, it will be
based on stretching financial,
strategic and operational
measures relevant to the
particular performance year,
with the majority of the bonus
(at least 50%) being linked
to financial measures. These
metrics would be set annually
at the start of the financial year,
and disclosed retrospectively.
Following the end of the
performance period the
Committee would review the
appropriateness of the formulaic
outcome and retain the
discretion to adjust the outcome
if considered appropriate, taking
into account factors including,
but not limited to, the
underlying performance of the
business and shareholder and
stakeholder experience.
Wise Annual Report and Accounts 2022 97
Pay element and
purpose clarity Operation Opportunity
Performance metrics, weighting
and assessment
Long-term
incentives
To encourage
our Executive
Directors to
deliver long-term
sustainable growth
and to provide
alignment with
shareholders’
interests and
reward exceptional
performance.
Long-term incentive awards
are made under the LTIP. The
Committee may award Executive
Directors annual grants of share
awards which are subject to
performance conditions. LTIP
awards will normally vest on the
third anniversary of the date of
grant to the extent performance
conditions over a three-year
performance period are met and
subject to continued employment.
The net of tax number of shares
that vest will be subject to
a two-year holding period
post-vesting.
Awards will be subject to malus
and clawback provisions as set out
on page 100.
The incumbent CEO has elected to
abstain from participating in the
LTIP for the duration of the Policy.
The maximum award level will
be capped at 650% of base
salary per annum, based on the
face value of shares at the date
of grant.
In a year where an Executive
Director receives an annual
bonus award, the maximum LTIP
award will be capped at 500%
of base salary to ensure that
the overall variable incentive
opportunity is limited to 650%
of salary.
Performance will normally
be measured over a period
of no less than three years.
The Committee will review
the performance measures and
weightings for each award to
ensure alignment with Wise’s
long-term strategy.
At least 80% of the award will
be measured on relative TSR
or other financial metrics, with
the balance comprising risk,
strategic and ESG measures.
No more than 25% of an
award may vest for ‘threshold’
performance, with straight-line
vesting to the maximum vesting
of 100% of the award.
Following the end of the
performance period the
Committee will review the
appropriateness of the formulaic
outcome and retain the
discretion to adjust the outcome
if considered appropriate, taking
into account factors including,
but not limited to, the
underlying performance of the
business and shareholder and
stakeholder experience.
Directors’ remuneration report continued
Wise Annual Report and Accounts 202298
Governance
Pay element and
purpose clarity Operation Opportunity
Performance metrics, weighting
and assessment
Shareholding
requirement
To align with
shareholders’
interests and to
foster a long-term
mindset.
Executive Directors are required to
accrue and then maintain a holding
of Class A Shares with a value of
300% of salary within five years
of appointment to the Board,
as assessed by the Committee
on an annual basis.
All beneficially owned shares,
deferred bonus shares, vested
shares subject to a holding period
under the LTIP and unvested
time-based share awards count
towards the shareholding
requirements.
Post-employment
Any Executive Director leaving
the Company will be expected to
retain the lower of the shares held
at cessation of employment and
shares to the value of 300% of
salary for a period of two years,
subject to the Remuneration
Committee in exceptional
circumstances amending
the requirement. This will be
managed via the individuals’
nominee accounts and is a
contractual condition in
their employment contract.
Shares purchased by the Executive
Directors are not included in the
post-employment shareholding
requirement. The shareholding
requirement ceases to apply on
death. Remuneration Committee
discretion can be applied
in implementing the
shareholding requirement.
Not applicable. Not applicable.
Non-Executive
Directors
To provide an
appropriate fee
level to attract
and retain
Non-Executive
Directors and to
appropriately
recognise the
responsibilities and
time commitment.
Non-Executive Directors are paid
an annual base fee and may be
paid additional fees for serving
on Board Committees, acting as
Senior Independent Director and
as Chair of Board Committees
(or to reflect other additional
responsibilities and/or additional/
unforeseen time commitments).
Additional fees may be paid to a
NED should they be required to
assume executive duties on a
temporary basis.
There is no performance-based
variable pay or pension provided
to the Chair or the other Non-
Executive Directors.
Business expenses incurred in
respect of their duties (including
any tax thereon) are reimbursed.
Fees for the Chair are set by the
Committee. Fees for the other
NEDs are set by the Board,
excluding the NEDs.
Fees are reviewed, but not
necessarily increased, annually.
Fee levels are determined based
on an estimate of the expected
time commitments of each role
and by reference to comparable
fee levels in other companies
of a similar size and complexity
to Wise and the prevailing rates
of other non-executives at
the time.
None.
Wise Annual Report and Accounts 2022 99
Discretions retained by the Committee in
operating the incentive plans
Any share-based awards granted under the Policy will be
granted under the appropriate share plan operated by Wise.
In administering these plans, the Remuneration Committee
retains flexibility to apply the relevant discretions provided
under the rules of the plans. These include (but are not limited to)
discretions relating to the grant of awards, the determination
of performance measures, weightings and targets; the treatment
of awards in the event of cessation of employment, including
the determination of good leaver status, or any corporate event
affecting Wise; and a discretion to vary performance conditions
in accordance with their terms or if any event happens which
causes the Committee reasonably to consider it appropriate
to do so.
Following the end of the performance period the Committee
retains the discretion to adjust the formulaic outcomes under
the annual bonus and LTIP if considered appropriate, taking
into account factors including, but not limited to, the underlying
performance of the business and shareholder and stakeholder
experience. Remuneration Committee discretion can be applied
in implementing the shareholding requirement.
The Remuneration Committee also retains discretion to
make minor amendments to the Remuneration Policy without
obtaining shareholder approval (for example, for regulatory,
tax, administrative purposes or to take account of a change
in legislation).
Whilst not relevant to date, any use of the above discretions
would, where relevant, be explained in the Annual Report on
Remuneration.
Malus and clawback
Any variable remuneration awards made to Executive Directors
under the Policy, including annual bonus, deferred bonus shares
and share awards, will be subject to malus and clawback
provisions. Malus refers to the reduction, including to nil,
of unvested or unpaid awards. Clawback refers to the recovery
of any value delivered in connection with the award.
Malus can be applied at the discretion of the Committee,
and clawback provisions can be triggered in cases defined
in the applicable contractual terms, including in summary
circumstances of misconduct or failure to meet appropriate
standards of fitness and propriety, errors or material
misstatements resulting in overpayment or over-allocation
of awards, material failures of risk management, responsibility
for conduct that resulted in significant losses, an instance of
corporate failure affecting the Company or entities representing
a material proportion of the Company or behaviour resulting
in material reputational damage.
Clawback may be effected in the clawback period defined by
the Committee in respect of the relevant award, that would not
usually be less than two years following the determination of
a bonus or the vesting of an LTIP award.
The Committee will ensure that robust mechanisms are operated
to ensure that these provisions are enforceable.
Selection of performance measures and targets
The measures selected will be aligned with Wise’s strategy and
key performance indicators, and will align with shareholder
success. The Remuneration Committee will set demanding
targets for variable pay in the context of Wise’s strategic
objectives, annual budgets and long-term financial forecasts.
Statement of consideration of shareholder views
In devising the Policy, the Remuneration Committee consulted
Wise’s largest shareholders and was encouraged by the support
received for the proposals. The finalised Policy takes market
practice, all relevant regulation, proxy agency guidelines and
shareholder feedback into account. In considering the operation
of the Remuneration Policy, the Remuneration Committee will
take into account the published remuneration guidelines and
specific views of shareholders and proxy voting agencies.
Furthermore, the Remuneration Committee will consider
specific concerns or matters raised at any time by
shareholders on remuneration.
Directors’ remuneration report continued
Wise Annual Report and Accounts 2022100
Governance
Statement of consideration of employment
conditions elsewhere in the Company
When making remuneration decisions, to ensure there is a
fair and consistent approach to remuneration, the Committee
considers pay and employment conditions across the Company
as a whole. The Committee reviews base salaries, pension
provision and share awards for the senior executive group,
receives regular updates on any changes to the wider Company
Remuneration Policy and monitors information on the annual
base salary reviews and share awards made to employees across
the Company. This information is then used to inform decision-
making for executive pay, such as determination of salary
increases for Executive Directors with reference to the range of
base pay increases within the Company. In addition to internal
insights, the Committee also uses external benchmarking data
to inform decision making and a comprehensive benchmarking
exercise of UK, European and US technology and Fintech peers
was carried out by our independent remuneration advisers to
support the design of our proposed Remuneration Policy.
Employee engagement scores and findings from internal surveys
such as our annual ‘Wiser Pulse’ survey are also reviewed at all
levels of the Company and help to shape the ongoing people
strategy across Wise as a whole. Details on engagement at
Wise can be found in the Our people section on page 26.
As a newly listed company, we are building the employee
engagement strategy for communicating Executive Director
compensation to the wider employee population. As this is
the first year and first policy of this type at Wise, at the time
of publication of this report, the Committee has not formally
consulted employees on Executive Director remuneration to
date. A consultation plan is being built to ensure sufficient time
is allocated to focus on these matters and consultation will be
carried out in the event that any significant changes to
remuneration and employment policies are proposed.
In the next financial year, in respect of workforce engagement,
the Board intends to leverage the geographic base of the
Non-Executive Directors, which reflects the geographic spread
of the Wise workforce, and agree a calendar of engagement
activities for each Non-Executive Director.
Further details on our compliance with the Code can be found
in the Corporate Governance Statement on page 63.
External appointments
With the approval of the Board, Executive Directors may
accept external appointments as non-executive directors
and retain the fees.
Recruitment Policy
When setting remuneration packages for new Executive
Directors, pay will be set in line with the Remuneration Policy.
Several factors will be considered including the geography in
which the role is located or is recruited from, the candidate’s
experience and skills and the remuneration levels of other
Executive Directors and colleagues in the business.
The Remuneration Committee may offer additional cash or
share-based awards in connection with the recruitment of
external candidates to buyout awards forfeited by the individual
when leaving the former employer. The Committee will seek, in
the first instance, to deliver such awards under the terms of the
existing annual bonus and/or share plan arrangements but it may
be necessary in some cases to make buyout awards on more
bespoke terms.
Where the Executive Director is expected to relocate from their
home location, the Committee may agree that the Company will
meet certain relocation expenses.
Remuneration Policy for Executive Directors and employees in general
Wise’s remuneration for all employees is aligned to the remuneration principles set out in this report on page 94.
Pay mix
The remuneration package for the Executive Directors is more heavily weighted towards share ownership
than for other employees to ensure the focus of our senior leaders is on the continued long-term,
sustainable success of the business.
Salary
Wise’s approach to salary reviews is consistent across the Company and the workforce salary environment
is taken into consideration when reviewing salary increases for Executive Directors.
Pension
All UK employees, including the Executive Directors, are eligible to become members of Wise’s defined
contribution pension scheme. Under the Remuneration Policy, the pension contribution level for
UK-based Executive Directors is aligned (as a percentage of salary) with the wider UK workforce.
Bonus
Wise does not currently operate annual bonus arrangements, and we do not expect to award a bonus in
FY2023 to the incumbent Executive Directors. However, the Committee felt that including the option to
award an annual bonus within the proposed Policy was necessary to provide flexibility for the future, in
case it is required in order to motivate leadership or for succession.
Long-term incentives
All Wise employees are currently eligible for grants of time-based share awards. Wider employee share
ownership is a key objective for the business, aligning the interests of employees with the Company’s mission
and business strategy, and with shareholder interests.
Wise Annual Report and Accounts 2022 101
Legacy incentives
Payments may be made to satisfy commitments made prior to the approval of this Remuneration Policy. This includes payments made
under the share plan arrangements operated on or prior to Admission (the “Legacy Incentive Plans”) or payments made to satisfy legacy
arrangements agreed prior to (and not in contemplation of) an employee being promoted to the Board. All outstanding obligations may
be honoured and payment will be permitted under this Remuneration Policy.
Service agreements and letters of appointment
Executive Directors’ service contracts
The Executive Directors have a service contract requiring three months’ notice of termination from either party as shown below:
Executive Director Date of appointment Date of current contract
Notice from the
Company
Notice from the
individual
Unexpired period of
service contract
Kristo Käärmann 28 April 2021 16 June 2021 3 months 3 months Rolling
Matthew Briers 18 June 2021 25 June 2021 3 months 3 months Rolling
Letters of appointment for Non-Executive Directors
The Chair of the Board and Non-Executive Directors’ terms of appointment are set out in their respective letters of appointment.
The letters of appointment require up to 6 months’ notice of termination from either party as shown below. On termination,
at any time, Non-Executive Directors are entitled to any accrued but unpaid fees but not to any other compensation.
The table below details the letters of appointment for each Non-Executive Director:
Non-Executive Directors Date of appointment
Date of current letter of
appointment Notice from the Company Notice from the individual
Alastair Rampell 18 June 2021 21 June 2021 1 month 1 month
Clare Gilmartin 18 June 2021 21 June 2021 1 month 1 month
David Wells 18 June 2021 21 June 2021 1 month 1 month
Hooi Ling Tan 19 June 2021 21 June 2021 1 month 1 month
Ingo Uytdehaage 19 June 2021 21 June 2021 1 month 1 month
Terri Duhon 1 January 2022 8 December 2021 1 month 1 month
All Directors are subject to re-election every three years in accordance with the Company’s Articles of Association. In line with
corporate governance best practice, all Directors currently put themselves forward for annual re-election at each AGM.
Directors’ remuneration report continued
Wise Annual Report and Accounts 2022102
Governance
Policy on payment for departure from office
On termination of an Executive Director’s service contract, the Committee will take into account the departing Director’s duty
to mitigate their loss when determining the amount of compensation. The Committee’s Policy is described below and will be
implemented taking into account the contractual entitlements, the specific circumstances for the departure and the interests
of shareholders.
Component of pay Voluntary resignation
‘Good leaver’ (e.g. death, ill health, disability; or in other
circumstances at the Remuneration Committee’s discretion)
Base salary,
pension and
benefits
Paid or provided for the proportion of the notice period worked and any untaken holidays pro-rated to the
leaving date.
While the Company’s preference is mitigation in these circumstances, at times a Payment in Lieu of Notice
(“PILON”) may be made in relation to any period of contractual notice period not worked. The PILON may be
paid in a lump sum or in instalments subject to mitigation.
Annual bonus
No payment of annual bonus for that year. Where employment ends during a bonus year, the bonus
eligibility for that bonus year would be pro-rated, unless
the Committee determines otherwise.
Where employment ends after the end of a bonus year
and prior to payment, eligibility for the normal bonus
for that completed bonus year would usually be
retained in full.
Any bonus awarded would normally be payable at the
normal time unless the Committee determines it should
be assessed and paid earlier, and may be paid in cash
without deferral.
Bonus deferral
awards
Unvested awards will normally continue to vest on their original vesting schedule, unless the Committee
determines they should vest earlier, and will not be subject to time pro-rating.
LTIP awards
Unvested awards will usually lapse. Unvested awards will usually continue to vest on their
vesting schedule and will be subject to time proration
unless the Committee determines otherwise.
Performance-based awards will remain subject to
the relevant performance conditions.
The Committee will retain discretion to assess performance
(in the case of performance-based awards) and allow
awards to vest at an earlier date if considered appropriate.
Vested but unexercised options would usually be retained. Any post-vesting holding period would usually
continue to apply, unless the Committee determines otherwise.
If termination is for serious misconduct or other reasons where employment could have been terminated without notice, there will be
no bonus eligibility and any bonus deferral awards and/or outstanding share-based awards (including vested but unexercised options)
would usually lapse in full.
On a change of control, share-based awards would usually vest, subject to any applicable performance conditions (assessed on such
a basis as the Committee may consider appropriate) and time pro-rating (unless the Committee decides to disapply time pro-rating
or the award is a bonus deferral award). Alternatively, awards may be rolled over into replacement awards offered by an
acquiring company.
The Committee will have the authority to settle any actual or potential legal claims against the Company (including but not limited to
unfair dismissal) that might arise on termination. The Company may pay an amount considered reasonable by the Committee in respect
of fees for legal and/or tax advice and outplacement support for the departing Executive Director as appropriate.
Wise Annual Report and Accounts 2022 103
Illustrations of application of the Remuneration Policy
The charts below set out the potential value and composition of the CEO and CFO remuneration packages under the proposed
Directors’ Remuneration Policy. Given the CEO’s decision to abstain from the variable components for the duration of the Policy,
two approaches are presented.
For each approach, the charts show four scenarios: (i) minimum, (ii) target, (iii) maximum, and (iv) maximum with 50% share price
growth. The basis of calculation for each scenario is set out in the tables below.
Minimum Target Maximum
Maximum plus 50%
share price growth
Fixed pay
Policy
• Salary effective from 1 April 2022.
• Benefits based on current cost of provision.
FY2023 implementation CEO:
• The CEO has elected to abstain from
participating in salary review process
• Benefits based on current cost of provision.
CFO:
• Salary effective from 1 April 2022.
• Benefits based on current cost of provision.
CFO:
• Salary effective
from 1 April 2022.
• Benefits based
on current cost
of provision.
CFO:
• Salary effective
from 1 April 2022.
• Benefits based
on current cost
of provision.
Annual bonus
Policy
Nil. No annual bonus arrangement is expected to be operated for the incumbent
Executive Directors in FY2023.
FY2023 implementation CEO: The CEO has elected to abstain from participating in the annual bonus
CFO: Nil. No annual bonus arrangement is expected to be operated for the CFO
in FY2023.
LTIP
Maximum award:
650% of salary
Policy
Nil payout. Midpoint between
25% threshold and
100% maximum,
i.e. 62.5%
100% of maximum 100% of maximum
plus 50% share
price growth
FY2023 implementation CEO: The CEO has elected to abstain from
participating in the LTIP.
CFO: Nil payout
CEO: Abstained
from participating
in LTIP
CFO: Midpoint
between 25%
threshold and
100% maximum,
i.e. 62.5%
CEO: Abstained
from participating
in LTIP
CFO: 100% of
maximum
CEO: Abstained
from participating
in LTIP
CFO: 100% of
maximum plus 50%
share price growth
Maximum potential compensation under proposed Directors’ Remuneration Policy
The following charts set out the potential value and composition of the CEO and CFO remuneration packages under the proposed
Directors’ Remuneration Policy for the year ending 31 March 2023. This includes an LTIP for the CEO for illustration purposes, but as
above, the CEO has elected to abstain from participating in the LTIP for the life of the Policy.
Directors’ remuneration report continued
Wise Annual Report and Accounts 2022104
Governance
Remuneration (Policy – only LTIP)
Chief Executive Officer
(Illustrative purposes only)
Remuneration (FY2023 implementation)
The chart below sets out the potential value and composition of the CEO and CFO remuneration packages under the proposed
Directors’ Remuneration Policy as it is intended to operate for the year ending 31 March 2023. No variable remuneration elements
are included for the CEO, as he has elected to abstain from participating in the annual bonus and LTIP for the life of the Policy.
Chief Executive Officer
Chief Financial Officer
Chief Financial Officer
800 (79%)
214 (100%)
214 (21%)
214 (17%)
214 (10%)
214
1,015
1,495
2,135
1,281 (83%)
1,921 (90%)
Fixed pay Annual bonus
Max +50%
growth
Long-term incentives
Minimum
Target
Maximum
1,361 (79%)359 (21%)
359 (100%) 359
1,720
2,537
3,625
2,178 (86%)359 (14%)
359 (10%) 3,266 (90%)
Fixed pay
Max +50%
growth
Long-term incentives
Minimum
Target
Maximum
800214
214 214
214
214
214
1,281214
214 1,921
Fixed pay Annual bonus
Max +50%
growth
Long-term incentives
Minimum
Target
Maximum
1,361 (79%)359 (21%)
359 (100%) 359
1,720
2,537
3,625
2,178 (86%)359 (14%)
359 (10%) 3,266 (90%)
Fixed pay
Max +50%
growth
Long-term incentives
Minimum
Target
Maximum
Wise Annual Report and Accounts 2022 105
Directors’ remuneration report continued
Annual Report on Remuneration
The following pages 106 to 112 provide details of Wise’s remuneration arrangements in the period from incorporation of the Company
on 18 February 2021 to 31 March 2022 and how Wise’s Remuneration Policy will be implemented in FY2023. The sections of this part
of the report which are subject to audit have been highlighted.
Single total figure of remuneration – Executive Directors (audited)
The following audited table sets out the single total figure of remuneration for Executive Directors in respect of qualifying services with
the Company. The Executive Directors started receiving remuneration in respect of qualifying services with the Company with effect
from the date of the pre-Admission Group reorganisation. However, the remuneration reported relates to the period from incorporation
at 18 February 2021 to year end at 31 March 2022. No prior year comparison has been provided as the Company was only incorporated
during this reporting period.
Kristo Käärmann
£’000
Matthew Briers
£’000
Salary
1
153 217
Taxable benefits
2
0.5 0.5
Pension-related benefits
3
8 –
Total fixed pay 161 217
Annual bonus
4
– –
Performance-based share awards – –
Total variable pay – –
Total
5
161 217
1. The annual base salaries for the CEO and CFO were set at Admission at £197,000 and £280,000 respectively.
2. The benefits total represents the taxable value of benefits paid. Benefits provided to Executive Directors include private health insurance.
The benefits provided remain the same as prior to Admission.
3. Executive Directors have the ability to opt into pension benefits equivalent to 5% of salary. Matthew Briers has opted out of pension benefits.
No Executive Director has a prospective entitlement to a defined benefit pension.
4. No bonus was paid to the CEO or CFO during the reporting period and no bonus awards have been granted to either Executive Director to date.
5. In the period since its incorporation to the date of the pre-Admission Group reorganisation the CEO and CFO did receive remuneration,
and Matthew Briers received the grant of an award under the Legacy Incentive Plans, in respect of their former roles with the pre-existing Wise group.
This remuneration is not included in the above single total figure as it does not relate to the provision of, nor was in respect of an agreement to provide,
qualifying services with Wise plc. For completeness, a summary of the remuneration paid to the CEO and CFO during this period is included below.
Details of awards under the Legacy Incentive Plans are also given below.
Wise Annual Report and Accounts 2022106
Governance
Remuneration from the pre-existing Wise Group
In the period between incorporation and the pre-Admission Group reorganisation, the CEO and CFO received remuneration from the
pre-existing Wise Group. Details of this are set out below.
Pre-reorganisation CEO remuneration notes
During this period, the CEO, Kristo Käärmann, received base salary payments of £66,644, benefits with a taxable value of £209 and
pension-related benefits with a value of £3,332. Additionally, as part of the pre-Admission Group reorganisation Wise Payments Limited,
issued 50,001 £1.00 per share redeemable preference shares to the CEO (these shares being specifically required as part of the
reorganisation steps and following the completion of the steps they were redeemed). The requirement for the CEO to pay for these
shares was waived by Wise Payments Limited. The waiver was treated as taxable income for the CEO and the income tax and employer
and employee National Insurance contributions that became due in respect of it, in the amount of £94,342, was paid by the Company.
Pre-reorganisation CFO remuneration notes
During this period, the CFO, Matthew Briers, received base salary payments of £81,190 and benefits with a taxable value of £209.
The CFO also received an award under the Legacy Incentive Plan with a value of £4,116,700. Details of this award were disclosed
in the Prospectus and can be found in the ‘Legacy incentives held by our Executive Directors, including awards granted in the year
(audited)’ section of this report.
Legacy incentives held by our Executive Directors, including awards granted in the year
As set out in the Prospectus, our CFO holds awards over Class A Shares under the Legacy Incentive Plans which were operated by
the Company prior to Admission. These awards were not accelerated as a result of Admission, and so remain outstanding subject to
service-based vesting conditions.
Details of the CFO’s Legacy Incentive Plan awards are included below
1
:
Date of grant Type of award
Number of Class A
Shares under award Exercise price Vesting date
16 June 2021
Share award (Restricted
Stock Units)
2
910,000
3
£0.00
Award vests quarterly over the period from
1 November 2021 to 1 November 2025
28 January 2020
Share option (Non-
qualifying stock options)
2
1,418,170 £0.00
Award vests monthly over the period from
1 November 2019 to 1 November 2023
14 December 2017
Share option (Non-
qualifying stock options)
2
650,000 £0.00
Award vested monthly over the period from
1 November 2017 to 1 November 2021
8 December 2016
Share option (Non-
qualifying stock options)
2
3,562 £0.00
Award vested monthly over the period from
7 September 2015 to 7 September 2019
15 June 2016
Share option (Non-
qualifying stock options)
2
1,080,040 £0.00
Award vested monthly over the period from
7 September 2015 to 7 September 2019
4 December 2015 Share option (CSOP award)
2
187,928 £0.16
Award vested monthly over the period from
7 September 2015 to 7 September 2019
1. Share awards were initially granted as awards over A Shares in Wise Payments Limited. Figures displayed in the table show the number of Wise plc
Class A Shares subject to the awards following the share split and exchange of the awards undertaken in preparation for Admission.
2. Legacy time based awards, including unvested awards, are not subject to performance measures but to continued employment.
3. The award granted on 16 June 2021 was originally granted as an award over 35,000 A Shares in Wise Payments Limited, prior to being exchanged
for an award over Wise Plc Class A Shares and adjusted to account for the 1:26 share split undertaken in preparation for Admission. The face value at
grant of this award was £4,116,700, calculated based on an estimated valuation of shares in Wise Payments Limited prepared for certain tax purposes on
30 March 2021 of £117.62 per share. In line with the wider employee share plan, this award was granted on the basis that an existing award had fully
vested, and as per the Company’s practices, a new grant was given.
Full details of the terms of the Legacy Incentive Plans can be found in the Prospectus at https://wise.com/owners on page 190
Wise Annual Report and Accounts 2022 107
Directors’ remuneration report continued
Directors’ share interests (audited)
The table below summarises the interests in shares held by Directors who served in the period 18 Feb 2021 to 31 March 2022, including the
shareholdings of their connected persons. With the exception of individuals who served as Directors during the reporting period, including
Matthew Briers, there have been no changes in the shareholdings of the Directors from 31 March 2022 to the date of this report.
During employment, Executive Directors are required to build and maintain a shareholding of Class A Shares equivalent to at least
300% of their base salary. The shareholdings of the CEO and CFO on 31 March 2022 exceed this requirement.
Beneficially owned shares
on 31 March 2022
1
Awards under the
Legacy Incentive Plans
over Class A Shares
Class A
Shares
Class B
Shares
Unvested
legacy share
awards
Unvested
legacy share
options Persons connected
Vested but not
exercised legacy
share options
Shareholding
requirement as
a percentage
of salary
Shareholding
requirement
met
Executive
Directors
5
Kristo Käärmann 186,078,489 186,022,590 N/A N/A
779,766 A Shares,
779,766 B Shares N/A 300% Yes
Matthew Briers 184,273 853,138 590,928 – 1,114,958 300% Yes
Non-Executive Directors
5
Alastair Rampell – – –
88,424,920 A Shares,
28,216,214 B Shares – N/A N/A
Clare Gilmartin
1
96,720 – – – – N/A N/A
David Wells
1
– – – 239,616 A Shares 923,000 N/A N/A
Hooi Ling Tan
2
96,720 – – – – N/A N/A
Ingo Uytdehaage
1
– – – – 572,000 N/A N/A
Terri Duhon – – – – – N/A N/A
Taavet Hinrikus 89,851,160 53,966,926 – – – – N/A N/A
Dean Nash – – – – 98,750 N/A N/A
1. The Remuneration Committee did not determine or approve the grants made to Non-Executive Directors under the Legacy Incentive Plans as these
awards were determined by the Wise Payments Limited Board pre-Admission.
2. As set out in the Prospectus, prior to Admission and in the context of Wise operating as a private company, David Wells and Ingo Uytdehaage
held options under the Legacy Incentive Plans which were originally granted as options over A shares in Wise Payments Limited (“WPL A Shares”).
In preparation for Admission, these were exchanged for options over Class A Shares in Wise. The options resulting from the exchange, effected on 22 June
2021, comprised an option over 923,000 Class A Shares and an option over 572,000 Class A Shares for David Wells and Ingo Uytdehaage respectively.
3. As set out in the Prospectus, prior to Admission and in the context of Wise operating as a private company, Clare Gilmartin and Hooi Ling Tan held
options under the Legacy Incentive Plans over WPL A Shares. Clare Gilmartin option was granted on 11 February 2021 over 193,440 WPL A Shares and
Hooi Ling Tan’s option was granted on 21 June 2021 over 96,720 WPL A Shares. Clare Gilmartin and Hooi Ling Tan exercised 96,720 options prior to
Admission. Clare Gilmartin’s remaining options were lapsed.
4. In the period from incorporation until 31 March 22 to 31 March 22 and in connection with incorporation of the Company and the Admission process,
other individuals temporarily sat as directors of the Company prior to Admission without holding shares in the Company. Dean Nash, the former
General Counsel, did not hold any Class A Shares as at the date of his termination of employment with Wise on 7 January 2022.
5. Share awards were initially granted as awards over A Shares in Wise Payments Limited. Figures displayed in the table show the number of Wise plc
Class A Shares subject to the awards following the share split and exchange of the awards undertaken in preparation for Admission. Taavet Hinrikus’s
holdings are held by held via Notorious OU, a Persons Connected.
6. Paul Newcombe served as a Director for the period 18 February 2021 to 28 April 2021. He received no remuneration and held no share interest in this
period; nor did he receive any scheme awards
Directors’ interests under share plans (audited)
Director
Date of
grant
As at
18 February
2021
Awards
made
during the
year
1
Number of
shares vesting
during the
year
Number of
shares lapsing
during the
year
As at
31 March
2022 Date of vesting
Face value
of awards
2
Matthew Briers 16/06/2021 0 910,000 56,862
3
0 853,138
Award vests quarterly over the
period from 1 November 2021 to
1 November 2025 4,116,700
Hooi Ling
4
21/6/2021 0 96,720 96,720 0 7/7/2021 437,546
1. Share awards were initially granted as awards over A Shares in Wise Payments Limited. Figures displayed in the table show the number of Wise plc
Class A Shares subject to the awards following the share split and exchange of the awards undertaken in preparation for Admission.
2. Based on an external 409a valuation received as at 30 March 2021 of £4.523847 to the nearest two decimal places.
3. Matthew Briers had a vesting of 56,862 RSUs on 1 November 2021. Exercise price was £0.00 and market value at the time of exercise was £477,698
(at £8.40 per share).
4. Hooi Ling Tan exercised 96,720 options prior to Admission. The exercise price for the grant was £0.00 and the market price at date of exercise was £8.80.
Wise Annual Report and Accounts 2022108
Governance
Single total figure of remuneration – Non-Executive Directors (audited)
The following audited table sets out the single total figure of remuneration for Non-Executive Directors in respect of qualifying services
with the Company in respect of the period from incorporation at 18 February 2021 to year end at 31 March 2022. No prior year comparison
has been provided as the Company was only incorporated during this reporting period.
Non-Executive
Directors Fees £’000
1
Taxable benefits
Pension-related
benefits Total
Alastair Rampell
2
– – – –
Hooi Ling Tan
3
– – – –
Clare Gilmartin
3,5
– – – –
Ingo Uytdehaage
5
4 – – 4
David Wells
5
5 – – 5
Terri Duhon 43 – – 43
Taavet Hinrikus 9 0.3 0.5 10
1. The above Directors were each appointed to the Board on 18 June 2021, save for Hooi Ling Tan who was appointed on 19 June 2021 and Terri Duhon
who was appointed on 1 January 2022. Taavet Hinrikus ceased to be a Director from 8 December 2021.
2. Alastair Rampell has voluntarily waived all fees in relation to his appointment as a Non-Executive Director of Wise plc. Therefore no fees were paid during the period.
3. Clare Gilmartin and Hooi Ling Tan did not receive fees for their appointments to the Board during FY2022.
4. Awards under the Legacy Incentive Plans. As referred to in the section on Directors’ Share Interests, and as set out in the Prospectus, prior to Admission
and in the context of the Group operating as a privately owned company, certain Directors were granted and held options under the Legacy Incentive
Plans. Options were granted to David Wells and Ingo Uytdehaage in respect of their prior roles as directors of Wise Payments Limited. Hooi Ling Tan
was granted an option on 21 June 2021, with a face value on grant of £437,546 (calculated based on an estimated valuation of WPL A Shares prepared for
certain tax purposes on 30 March 2021 of £117.62). Clare Gilmartin was granted an option on 11 February 2021, in anticipation of her commencing office
as a director of Wise Plc. The face value on grant of this option, net of the value of the part of the option which lapsed during the year, was £437,546
(calculated based on an estimated valuation of WPL A Shares prepared for certain tax purposes on 30 March 2021 of £117.62). As reported in the section
on Directors’ Share Interests and in the Prospectus, the options held by Clare Gilmartin and Hooi Ling Tan were exercised either shortly prior to, or shortly
following, Admission. The options of David Wells and Ingo Uytdehaage remain outstanding.
5. Since Admission, the Remuneration Committee comprised three Independent Non-Executive Directors, Clare Gilmartin, David Wells and Ingo Uytdehaage.
Payments for loss of office and/or payments to former Directors (audited)
Taavet Hinrikus stepped down from his role as Chair on 8 December 2021. Taavet did not receive any payments for loss of office.
Following his ceasing to be a Director, Taavet has continued as an employee of Wise and receives remuneration for that role.
No other payments for loss or office or payments to past Directors were made.
Percentage change in Directors’ remuneration
Since the Company was only incorporated during the reporting period, there is no comparable remuneration to disclose for the prior year.
Full disclosure on the percentage change for Director and employee remuneration, in line with the Companies (Directors’ Remuneration
Policy and Directors’ Remuneration Report) Regulations 2019, will be provided in future remuneration reports.
CEO remuneration
The table below sets out the CEO’s single figure of total remuneration in the period from 22 June 2021 to year end at 31 March 2022,
which consisted solely of the CEO’s fixed remuneration.
(£’000)
Total remuneration 161
Annual bonus as % of maximum N/A
Shares vesting as % of maximum N/A
TSR against comparator group index
Wise PLC shares began unconditional trading on the London Stock Exchange’s Main Market on 7 July 2021. This graph shows the value,
by 31 March 2022, of £100 invested in Wise Plc on 7 July 2021 (date of Admission), compared with the value of £100 invested in the FTSE
250 index on a daily basis. We have chosen the FTSE 250 Index as it provides the most appropriate and widely recognised index for
benchmarking the Company’s corporate performance since Admission.
Total shareholder return
FTSE 250Wise plc
07/07/2021 30/09/2021 31/12/2021 31/03/2022
20
40
60
80
100
120
140
160
Wise Annual Report and Accounts 2022 109
Wise’s CEO pay ratios have been calculated using Option B,
based on the availability of data at the time the Annual Report
was published. This uses the most recently disclosed gender pay
data to identify the three employees that represent our 25
th
, 50
th
and 75
th
percentile employees. This methodology has been used
as it enables us to use the remuneration data we have available
and we are comfortable it provides a robust reflection of
remuneration across our UK employees.
The total remuneration for these individuals has been calculated
based on all components of pay for FY2022, including base
salary, share awards granted within the year, pension, benefits,
and where applicable, on-call allowances. We have reviewed
individuals above and below those people representative of the
quartiles, the methodology for arriving at the gender pay data
and share awards throughout the period.
For the upper quartile, the total compensation of the individual
one above the 75
th
percentile employee has been included within
the disclosure and with this adjustment, we are comfortable that
the remuneration shown for the CEO pay ratio is reasonably
representative of the quartiles. No other adjustments were
necessary and no elements of employee remuneration have been
excluded from the pay ratio calculation. The date by reference to
which the Company determined the 25
th
, 50
th
and 75
th
percentile
employees was 31 March 2022.
The Remuneration Committee is comfortable that the pay ratio
shown above is consistent with our pay, reward and progression
policies for the Company’s employees as a whole. Due to the
inclusion of employee share awards at grant, which are typically
on a four-year vesting schedule or sooner in relation to a
promotion, there may be slight fluctuations in the CEO pay
ratios year to year. Conversely, as the incumbent CEO has
elected to abstain from participating in any variable remuneration
components for the life of the proposed Remuneration Policy,
significant year to year volatility is not expected for the
foreseeable future.
Directors’ remuneration report continued
Diversity, equity and inclusion (DEI)
We have reported annually on our gender pay gap for several
years. Wise has a strong female presence globally, however there
are areas where gender hiring is still a concern. Our founders are
male, and a large portion of the Wise SLT is based out of the UK
office are male, meaning that these factors heavily influence
our gender pay gap. Additionally, as with many technology
companies, a significant proportion of our highest paying roles
still sit within our Engineering team, a discipline which has a
history of being largely dominated by men.
Based on the UK gender pay gap reporting requirements,
our 2020/21 UK gender pay gaps of 19.51% (median) and
20.00% (mean) show a year on year decrease in both
measures (compared to 23.43% and 24.00% in FY2020),
however we still have work to do.
Wise is committed to improving the gender balance across
all levels of the business and this is a core focus for DEI at the
Company as a whole. Key objectives include attracting more
women to work in areas where gender balance has been weak,
such as our Engineering teams (where 88% of our employees are
male) and specifically targeting and supporting the development
of female senior leaders in the Company.
Further information about our DEI initiatives across the workforce
are set out in the ‘Our People’ section from pages 22 to 27.
The Company’s latest Gender Pay Gap Statement can be found
on the Wise website: https://wise.com/gb/blog/gender-pay-
gap-FY2021
Mean Median
Hourly rate of pay FY2022: 20.00%
FY2021: 23.43%
FY2022: 19.51%
FY2021: 24.00%
Bonus pay FY2022: 49.71%
FY2021: 86.66%
FY2022: -44.93%
FY2021: 0.00%
CEO pay ratio
UK regulation requires companies with more than 250 UK employees to publish a ratio to show CEO pay versus that of their UK
employees.
The CEO pay ratio table shows the ratio of pay between the CEO of Wise and Wise’s UK employees. The ratio compares the total
remuneration of the CEO against the total remuneration of the median UK employee and those who sit at the 25
th
and 75
th
percentiles.
Financial year Method Lower quartile Median Upper quartile
FY2022 Option B 3:1 2:1 1:1
* Details provided in respect of the period from 22 June 2021 to 31 March 2022.
CEO Lower quartile Median Upper quartile
Salary £153,222 £50,250 £72,000 £67,833
Total pay and benefits £161,426 £53,302 £76,139 £138,768
Wise Annual Report and Accounts 2022110
Governance
Statement of dilutive impact
The Company reported in the Prospectus that Class A Shares
may be issued to satisfy awards under the Legacy Incentive Plans
and the employee share plan arrangements to be operated by
Wise following Admission.
In respect of the Legacy Incentive Plans, at Admission there were
awards outstanding over 93,959,944 Class A Shares. In the period
from Admission to 31 March 2022, awards over 40,926,029 Class
A Shares were exercised, and awards over 3,540,114 Class A
Shares lapsed, resulting in awards over 58,750,437 Class A
Shares remaining outstanding as at 31 March 2022.
During FY2022 the Company issued 30 million Class A Shares
to the Company’s employee benefit trust for the purpose of
satisfying the exercise of these awards. Taking into account
the shares held by the employee benefit trust at Admission,
and after satisfying the exercise of awards, as at 31 March 2022
the employee benefit trust held 40,940,970 Class A Shares.
As also set out in the Prospectus, from Admission Wise adopted
a new employee share plan, the Wise plc Long-term Incentive
Plan (the “LTIP”), and in any 10-year period the number of Class A
Shares which may be issued or be issuable under the LTIP and
under any other discretionary share plan adopted by the
Company may not exceed 5% of the issued post-Admission
ordinary share capital of the Company from time to time.
As an indication of the level of grants under the LTIP, taking
account of awards granted during FY2022 (and assuming those
awards were to vest in full), the number of further awards
available to Wise to grant as at 31 March 2022 was equal
to approximately 4.32% of the issued ordinary share capital
on such date.
Relative importance of spend on pay
The table below shows Wise’s expenditure on employee pay
during FY2022, compared to distributions to shareholders by
Wise during FY2022. Since the Company was only incorporated
during the reporting period, there is no comparable information
to disclose for the prior year.
FY2022
£m
Distribution to shareholders -
Total employee pay 184.8
External advisers
In March 2022, following a comprehensive tendering process,
the Remuneration Committee appointed Aon to be its
independent advisers on executive remuneration. No fees
had been charged in respect of this advice as at 31 March 2022.
The Board is satisfied that Aon provides advice which is objective
and independent and that the team providing the advice did
not have any connections with the Company that may impair
its independence.
Aon also provides advisory and placement services in respect
of Financial Lines and General Lines insurances to the Company.
Prior to Aon’s appointment, the Board reviewed the potential for
conflicts of interest and assessed whether appropriate safeguards
were in place. The Committee is satisfied that these additional
services did not prejudice Aon’s position as the Committee‘s
independent adviser.
Wise Annual Report and Accounts 2022 111
Statement of shareholding voting
This is the first Policy and Directors’ Remuneration Report submitted to shareholders. Disclosure of the voting results at the FY2023
AGM will be presented both in the Annual Report on Remuneration for FY2023 and on https://wise.com/owners
Implementation of Policy for FY2023
Base salaries
There will be no change to the annual base salaries for the CEO. A salary increase of 20% is proposed
for the CFO.
CEO: £197,000
CFO: £335,000
Benefits and
pension
Executive Directors will continue to receive an employer pension contribution of 5% of base salary.
No changes are proposed to the benefits provision for the Executive Directors.
Annual bonus
It is not expected that there will be any Annual bonus awards to the incumbent Executive Directors in FY2023.
LTIP
Subject to shareholder approval of the Policy at the 2022 AGM, the Remuneration Committee intends to grant
an LTIP award with a maximum of 650% of salary to the CFO.
The LTIP award will be subject to performance measures, to be assessed over a performance period comprising
FY2023 to FY2025, based on relative TSR and volume growth (weighted 50% each) and the measures for each
are set out within the table below.
Vesting will be on a straight-line basis between the threshold and maximum for both elements.
NED fees
Non-Executive Director fees were set on Admission, as set out below.
These fees will not be increased for FY2023.
Chair fee: £275,000
Non-Executive Director base fee: £170,000
Senior Independent Director: Nil
Nomination and Remuneration Committee Chairs: £10,000
Audit and Risk Committee Chair: £15,000
Workforce Engagement Lead: Nil
FY2023 LTIP grant – performance measures
Performance measures Weighting Threshold Maximum
Relative TSR
vs FTSE 250
50% Median Upper quartile and above
Volume growth
50% CAGR 20% for the performance period CAGR 30% for the performance period
Approved by the Board
Clare Gilmartin,
Chair of the Remuneration Committee
28 June 2022
Directors’ remuneration report continued
Wise Annual Report and Accounts 2022112
Governance
The Directors present their report, together with the audited
consolidated financial statements of the Company for the year
ended 31 March 2022.
The Strategic Report and the Directors’ Report together form the
Management Report for the purposes of the Disclosure Guidance
and Transparency Rules (DTR) 4.1.8R.
In accordance with s414C (11) of the Companies Act, some of the
matters required to be included in the Directors’ Report have
been included elsewhere in the Annual Report. These matters
are cross referenced below and together form part of the
Directors’ Report.
Disclosures Annual report section Page
Risk management objectives
and policies Strategic Report 41
Going concern and
viability statement Strategic Report 50
Transactions with related
parties
Note 23 to the Group
Consolidated financial
statements 153
Greenhouse gas emissions Strategic Report 28
Workforce engagement Strategic Report 36
Directors’ biographies
Corporate Governance
Report 58
Corporate Governance
Statement
Corporate Governance
Report 63
Directors’ conflicts of interest
Corporate Governance
Report 75
Directors’ indemnities
Corporate Governance
Report 76
Information on how the
Directors have had regard for
the Company’s stakeholders,
and the effect of the regard Strategic Report 34
Other information to be disclosed in the Directors’ Report
is given in this section.
The Directors’ Report fulfils the requirements of the Corporate
Governance Statement for the purposes of DTR 7.2.3R. Further
information is available online at wise.com/owners.
Both the Strategic Report and the Directors’ Report have been
drawn up and presented in accordance with, and in reliance
upon, applicable English company law, and the liabilities of the
Directors in connection with those reports shall be subject to
the limitations and restrictions provided by such law.
Dividends
The Group has not declared or paid out any dividends for the
year ended 31 March 2022.
Powers of the Directors
The Company’s Articles of Association (the ‘Articles’) set out the
powers of the Directors. Subject to UK Company law, the Articles
and any directions given by special resolution of the Company,
the Directors have been granted authority to exercise all the
powers of the Company.
The Articles may only be amended by way of special resolution
at a general meeting of the Company’s shareholders.
Appointment and replacement of Directors
The appointment and replacement of Directors is governed
by the Articles, the 2018 UK CGC, and the Companies Act 2006
and related legislation.
Under the Articles, Directors may be appointed, either to fill
a vacancy or as an addition to the existing Board, by ordinary
resolution of the Company or by resolution of the Board.
If appointed by the Board, a Director must retire and, if willing
to act, seek election at the next AGM following appointment.
In addition, the Articles require all Directors to retire at each
AGM and, if willing to do so, offer themselves for re-election.
This aligns to the requirements of provision 18 of the UK CGC.
Further details can be found on page 76 of the Corporate
Governance Report.
In addition to the powers set out in the Companies Act 2006,
the Articles provide for the removal of a Director before the
expiration of their period of office by ordinary resolution
of the Company.
Future business developments
The Group, via its comprehensive network of localised
infrastructure is able to respond to market trends and propel
business development. Future business development is overseen
and monitored as part of the Group’s business as usual activities.
The Group’s strategy in relation to future business developments
is articulated via its product development, market
strategy,mission pillars and business model which invests heavily
in generating growth. More information can be found in the
following sections of the Strategic report:
• Market overview on page 9;
• Our products on page 10;
• Our mission pillars on page 12; and ‘how we invest in growth’
model, found within the CFO Review on page 18
Directors’ report.
Directors’ report
Wise Annual Report and Accounts 2022 113
Directors’ report continued
The Board
The membership of the Board and biographical details
of the Directors are provided on page 58. Changes to the
Directors during the year and up to the date of this report
are set out on page 57. A summary of the rules related to the
appointment and replacement of Directors and Directors’ powers
can be found on page 76. Details of Directors’ interests in the
Company’s Ordinary Shares, options held over Ordinary Shares,
interest in share options and long-term incentive plans are set
out on page 76.
The Directors of the Company during the year and up to the date
of approval of these financial statements were:
• Kristo Käärmann
• Matthew Briers
• Taavet Hinrikus
1
• Clare Gilmartin
• Hooi Ling Tan
• Alastair Rampell
• Ingo Uytdehaage
• David Wells
• Terri Duhon
• Dean Nash
2
1. Resigned as Company Director and Chair on 8 December 2021.
2. Resigned as Company Director on 18 June 2021.
Compensation for loss of office
There are no agreements in place between the Company and its
Directors or employees for compensation for loss of office or
employment as a result of a takeover bid.
Change of control
There are no significant agreements to which any member
of the Group is a party that take effect, alter or terminate upon
a change of control of the Company following a takeover bid.
Branches and overseas registered officers
The Group, through various subsidiaries, has branches in a
number of different jurisdictions in which the business operates.
Further information on Wise subsidiaries and the branches
outside of the UK is disclosed in note 6 of the Company
financial statements.
Post balance sheet events
There have been no material post balance sheet events.
Political donations
No political donations or contributions to political parties under
the Companies Act 2006 have been made during the financial
year. The Group policy is that no political donations be made
or political expenditure incurred. The Group made a number
of charitable donations throughout the year totalling £0.4 million.
Research and development
Expenditure on the research phase of projects to develop new
product for our customers is recognised as an expense when
incurred. Costs that are directly attributable to a projects’
development phase and meet IAS 38 capitalisation criteria
are recognised as intangible assets. Refer to note 12 in the
Consolidated Group financial statements for details on total
expenditure and amounts capitalised.
Share capital structure
On 22 June 2021, in connection with the preparation for the
direct listing on the London Stock Exchange, Wise Payments Ltd
undertook a share reorganisation in which all shares (ordinary and
preference) were redesignated into a single Class of A Ordinary
Shares, following which, each Class A Ordinary Share was split
into 26 Class A Ordinary Shares. Wise Payments Ltd then
undertook a bonus issue of B Ordinary Shares.
On the same day and following the above share reorganisation,
Wise Payments Ltd shareholders entered into a share-for-share
exchange agreement with the shareholders of Wise plc,
acquiring Wise Payments Ltd’s Class A and Class B Shares with
nominal values of £0.000 01 and £0.000 000 001, in exchange
for the issue of Wise plc Class A and Class B Shares with nominal
values of £0.01 (i.e. 1,000 times greater than the nominal value of
Wise Payments Ltd’s Class A Ordinary Shares) and £0.000 000
001, respectively. As a result, Wise plc became the ultimate
parent company of the Group (the ‘Parent Company’), with
a 100% indirect investment in Wise Payments Ltd through
Wise Financial Holdings Ltd.
As at the date of this report, the Company’s issued share capital
consists of 1,024,589,856 A Ordinary Shares of £0.01 each and
398,889,814 B Ordinary Shares of £0.000 000 001 each. All
issued shares were fully paid up, amounting to an aggregate
nominal share capital of £10,245,898.958889. Each A Ordinary
Share is listed on the Official List maintained by the FCA and
admitted to trading on the Main Market of the London Stock
Exchange. Further details of the Company’s share capital can be
found in Note 18 of the Consolidated Group Financial Statements
on page 149.
Rights attaching to shares and restrictions on
transfer
Each Class A shareholder is entitled to one vote for each Class A
Share held, subject to any restrictions on total voting rights as set
out in the Company’s articles of association. Class A shareholders
are entitled to interim or annual dividends to the extent declared
and do not hold any preferential rights to dividends. Class A
Ordinary Shares are non-redeemable.
Each Class B shareholder is entitled to nine votes for each Class
B Ordinary Share held, subject to any restrictions on total voting
rights as set out in the Company’s Articles of Association. Class B
Ordinary Shares carry no rights to distributions of dividends
except on distribution of assets, up to their nominal value, on
a liquidation or winding up. Class B Ordinary Shares are strictly
non-transferable, non-tradeable and non-distributable to any
person or entity whatsoever.
Save for deadlines for voting by proxy, there are no restrictions
on voting rights attached to, or on the transfer of, the Company’s
A Shares and B Shares. Full details regarding the exercise of voting
rights at the 2022 AGM, whether in person or by proxy, will be
set out in the Notice of AGM. To be valid, the appointment of a
proxy to vote at a general meeting must be received not less than
48 hours before the time of the meeting.
The Company is not aware of any agreements between the
holders of the A and B Shares that may restrict their transfer
or the voting rights attaching to them.
None of the Company’s A and B Shares carry any special rights
regarding control of the Company.
Wise Annual Report and Accounts 2022114
Governance
Authority to allot or buy back shares
The Company was granted authority at the 22 June 2021
General Meeting to purchase in the market its own shares
up to a maximum number of 99,458,986 A Ordinary Shares.
No shares were purchased under this authority in the
year to 31 March 2022 and up to the date of this report.
This authority expires at the conclusion of the 2022 AGM,
or if earlier at the close of business on 30 September 2022.
This is a standard authority that the Directors have no present
intention of exercising.
The Directors were granted authority on 27 April 2021 to allot
relevant securities up to an aggregate amount of £50,001. 50,000
Redeemable Non-Voting Preference shares were allotted under
this authority on 28 April 2021. This authority expired on 27 April
2022. On 29 November 2021 the Redeemable Non-Voting
Preference shares were redeemed by the Company as part
of the post listing actions.
On 22 June 2021 the Directors were granted additional authority
to allot up to 331,529,952 Class A Shares, and comprising equity
securities up to a further 331,529,952 Class A Shares in connection
with an offer by way of a rights issue. This authority expires at the
conclusion of the 2022 AGM or if earlier at the close of business
on 30 September 2022. 30,000,000 Class A Shares were allotted
under this authority in the year to 31 March 2022. An ordinary
resolution will be proposed for renewal of this authority at
the 2022 AGM.
Substantial shareholdings
Notifications received by the Company in accordance with
DTR 5 are published via the regulatory Information Services
and on the Company’s website. As at the date of this report,
the Company had been advised of the following voting interests
in the company, amounting to more than 3% of the Company’s
issued share capital.
Name
Total number
of voting rights
% of total
voting rights
Kristo Käärmann 1,868,079,459 41.1
IA Venture Strategies Fund II, LP
and IA Venture Strategies Side
Fund II, LP 502,283,928 10.96
Baillie Gifford & Co 234,520,022 5.116
In the period between 31 March 2022 and the date of this report,
the Company received no further notifications in accordance
with DTR 5.
Share-based employee compensation
The nature, accounting policies and key terms of the employee
share option plan remain consistent with those disclosed in the
Wise Payments Limited 2021 Annual Report and Accounts,
unless stated otherwise below.
After the reorganisation of the Group, as described above,
share options for Wise Payments Limited Ordinary Shares
were replaced with share options for Wise plc Class A Ordinary
Shares. The same share-split ratio was applied as for the share
capital reorganisation described above.
As the result of the reorganisation, Wise Payments Limited
transferred its share-based payment reserves to retained
earnings as the obligation to settle share-based payment
awards would be with Wise plc. This transfer did not impact
consolidated results of the Group following the reorganisation
and is reflected in the standalone financial statements of Wise
Payments Limited.
Diversity
Wise is an inclusive employer and diversity is at the heart of our
organisation. We give full and fair consideration to applications
for employment by disabled persons and the continued
employment of anyone incurring a disability while employed by
us. Training, career development and promotion opportunities
are equally applied for by all our employees regardless of
disability. Our disclosures relating to the employment of women
in senior management roles, diversity, employee engagement
and policies are set out on pages 26, 27, 36 and 52.
The Directors’ Report, which has been prepared in accordance
with the requirements of the Companies Act 2006, has been
approved by the Board and signed on its behalf by:
Kristo Käärmann
Co-founder and CEO
28 June 2021
Wise Annual Report and Accounts 2022 115
Statement of Directors’ responsibilities in respect of the financial statements
The Directors are responsible for preparing the Annual Report
and Accounts and the financial statements in accordance with
applicable law and regulation.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have prepared the group financial statements in accordance
with UK-adopted international accounting standards and the
company financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, comprising FRS 102
“The Financial Reporting Standard applicable in the
UK and Republic of Ireland”, and applicable law).
Under company law, Directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the group and company and
of the profit or loss of the group for that period. In preparing
the financial statements, the Directors are required to:
• select suitable accounting policies and then apply
them consistently;
• state whether applicable UK-adopted international accounting
standards have been followed for the group financial
statements and United Kingdom Accounting Standards,
comprising FRS 102 have been followed for the company
financial statements, subject to any material departures
disclosed and explained in the financial statements;
• make judgements and accounting estimates that are
reasonable and prudent;
• prepare the financial statements on the going concern basis,
unless it is inappropriate to presume that the Group and the
Parent Company will continue in business.
The Directors are responsible for safeguarding the assets of the
Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain the
group’s and company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group and
Company and enable them to ensure that the financial
statements and the Directors’ Remuneration Report
comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ confirmations
Each of the Directors, whose names and functions are listed
in the Corporate Governance section confirm that, to the best
of their knowledge:
• the Group financial statements, which have been prepared
in accordance with UK-adopted international accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit of the group;
• the Parent Company financial statements, which have been
prepared in accordance with United Kingdom Accounting
Standards, comprising FRS 102, give a true and fair view of the
assets, liabilities and financial position of the company; and
• the Strategic Report and the reports of the Directors
contained within this Annual Report provides a fair view
of the development and performance of the business
and the position of the Group and the Parent Company,
together with a description of the principal risks and
uncertainties that it faces.
In the case of each Director in office at the date the Directors’
report is approved:
• so far as the Director is aware, there is no relevant audit
information of which the Group’s and Company’s auditors
are unaware; and
• they have taken all the steps that they ought to have taken as
a director in order to make themselves aware of any relevant
audit information and to establish that the group’s and
company’s auditors are aware of that information.
Statement of Directors’ responsibilities
in respect of the financial statements.
Wise Annual Report and Accounts 2022116
Governance
Audit and auditor
Each of the Directors at the date of approval of this Directors’
Report confirms that:
• to the best of their knowledge there is no relevant audit
information of which the Group and the Parent Company’s
auditor is unaware; and
• they have taken all the steps that they ought to have taken as
a Director in order to make themselves aware of any relevant
audit information and to establish that the Group’s and Parent
Company’s auditor is aware of that information.
PwC has indicated its willingness to continue in office as auditor
and, on the recommendation of the Audit and Risk Committee,
a resolution to reappoint PwC as the Company’s auditors will be
proposed at the AGM. Any remuneration received by PwC for: (i)
auditing the Annual Report; and (ii) any other (non-audit) services
has been disclosed in note 7 to the Group’s financial statements.
Approval of Annual Report
This Directors’ Report was approved by the Board on 28 June
and signed on its behalf by
Kristo Käärmann
Co-founder and CEO
28 June 2022
Wise Annual Report and Accounts 2022 117
Contents
Financial
Statements
Wise plc Annual Report and Accounts 2022
Independent auditors’ report 119
Consolidated statement of profit or loss and other comprehensive income 125
Consolidated statement of financial position 126
Consolidated statement of changes in equity 127
Consolidated statement of cash flows 128
Notes to the Group consolidated financial statements 129
Company statement of financial position 154
Company statement of changes in equity 155
Notes to the Company financial statements 156
Wise Annual Report and Accounts 2022118
Financial Statements
Independent auditors’ report
Independent auditors’ report to the members of Wise plc
Report on the audit of the financial statements
Opinion
In our opinion:
• Wise plc’s Group financial statements and Company financial statements (the “financial statements”) give a true and fair view of the
state of the Group’s and of the Company’s affairs as at 31March2022 and of the Group’s profit and the Group’s cash flows for the
year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and
Republic of Ireland”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts 2022 (the “Annual Report”), which comprise:
the Consolidated and Company statements of financial position as at 31March2022; the Consolidated statement of profit or loss and
other comprehensive income, the Consolidated statement of cash flows, the Consolidated statement of changes in equity for the year
then ended and Company statement of changes in equity for the period then ended; and the notes to the financial statements, which
include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 7, we have provided no non-audit services to the Company in the period under audit.
Our audit approach
Context
The Group’s financial statements are a consolidation of 30 legal entities and one consolidation entity. One entity, Wise Payments
Limited, is split into six reporting branches. We consider Wise Payments Limited (including its branches) to be one reporting unit.
All other legal entities, as well as individual consolidation entities are considered to be reporting units. We consider the Group to
consist of 31 reporting units. The Group results are presented for the year ended 31 March 2022 as a continuation of the consolidated
financial statements of Wise Payments Limited as explained in note 1.2. The Company is presented for the period ended 31 March 2022
from incorporation on the 18 February 2021.
Overview
Audit scope
• Our audit focused on those entities with the most significant contribution to the Group’s revenues. Of the Group’s 31 reporting
units, we identified five, which in our view, required an audit of their complete financial information for Group reporting purposes.
These were Wise Payments Limited, Wise Europe SA, Wise US Inc., Wise Australia Pty Ltd and Wise plc. We also audited material
consolidation journals. Cash at bank and in hand balances across all reporting units were in scope. All audits were performed by the
Group engagement team, with the exception of procedures over laws and regulations where we instructed six component auditor
teams to perform specified procedures in order to leverage their local understanding of the regulatory environment. The reporting
units within the scope of our work, and work performed centrally by the Group team, accounted for 89% of Group revenue.
Key audit matters
• Recognition of deferred tax asset (Group)
• Cash and bank balances and short-term financial investments (Group and Company)
Materiality
• Overall Group materiality: £4,278,000 based on 1% of revenue, averaged over three years.
• Overall Company materiality: £1,340,000 based on 1% of total assets.
• Performance materiality: £2,673,000 (Group) and £1,005,000 (Company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Wise Annual Report and Accounts 2022 119
Independent auditors’ report continued
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud)
identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures
thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
As a result of the listing of the Group during the year, key audit matters have been included for the first time this year.
This is not a complete list of all risks identified by our audit.
Key audit matter How our audit addressed the key audit matter
Recognition of deferred tax asset (Group)
At 31 March 2022, the Group has recognised gross deferred tax
assets of £113.6m (31 March 2021: £56.7m) of which £105m (31 March
2021: £51.8m) arose in the UK. Recognition of the Group’s deferred
tax asset requires management judgement and is a key area of audit
effort due to the quantum of the balance and the judgements
involved in determining the likelihood of realisation of the asset.
The expectation that the asset will be realised is dependent on
a number of factors, including whether there will be sufficient
taxable profits in future periods to support utilisation of the asset.
Refer to note 9 and Significant matters considered in relation to the
financial statements section of the Audit and Risk Committee Report.
1) We understood management’s processes in respect of assessing
the recoverability of deferred tax assets.
2) We assessed the appropriateness and measurement of the deferred
tax asset recognised through discussions with the Group’s tax
function, testing supporting documentation and assessing the
recoverability of the deferred tax asset.
3) In respect of the recoverability of deferred tax assets, we evaluated
management’s assessment as to whether there were sufficient
taxable profit forecasts to support the recognition of the deferred
tax assets and performed the following:
a) verified the integrity of formulae and the mathematical accuracy
of management’s underlying model;
b) evaluated management’s future cash flow forecasts, including
comparing budgeted results to actual performance in prior
periods and the process by which the forecasts were prepared
ensuring consistency of cash flows with those used for the
purpose of the Group’s going concern and viability assessments;
c) tested and assessed the measurement of temporary differences
and the assumptions in relation to their reversal; and
d) performed our own independent sensitivity analysis to
understand the impact of alternative profit scenarios on
the recovery period.
Based on the procedures performed, we are satisfied that
management’s forecast taxable profits support the recognition of
Group’s deferred tax assets and the related disclosures in the financial
statements are appropriate.
Cash and bank balances and short-term financial investments
(Group and Company)
Being a money transfer business, the Group has 30 legal entities
with circa 500 separate bank accounts. The Group has £6,056.3m
of cash and short-term financial investments of £1,192.4m covering
the liability from Wise Accounts (amounts owed to customers)
of £6,783.2m.
Bank accounts are regularly reconciled and a mix of automated and
monitoring controls are in place. However, due to limitations in the
IT control environment (as explained in the audit scope section
below and the Board’s commentary in the corporate governance
statement), we are unable to obtain audit evidence from the
operation of these controls.
Given the nature of operations, complexity and the IT control
matters, our audit focused on procedures to test the existence
of cash and bank balances.
Refer to notes 14 and 15 and the Internal Control section of the
Audit and Risk Committee Report.
1) We obtained management’s schedule of bank accounts prepared
for the audit and compared this against known bank accounts from
previous years;
2) We independently confirmed 99.99% of the cash financial
statement line item with third party banks with alternative
procedures performed on the remaining immaterial balance;
3) We also obtained independent direct confirmations for the nil-value
balance accounts as at year end and verified the closure letters for
the bank accounts closed during the year;
4) For confirmations received where the bank would not confirm
that there were no other bank accounts, we performed additional
procedures such as logging on to online banking with management
and ensuring no other accounts were listed;
5) We performed procedures to verify whether there were any
transactions during the year for the nil-value balance accounts
confirmed by the bank, with no corresponding GL code;
6) We tested 100% of bank reconciliations from the bank statement
to general ledger as at 31 March 2022 and tested a sample of the
reconciling items substantively;
7) We also tested bank reconciliations during the year on a sample
basis; and
8) We independently confirmed 100% of the short-term financial
investments line item with third party banks.
From our procedures performed, we did not identify any
material misstatements in the bank and cash balances or
short-term financial investments.
Wise Annual Report and Accounts 2022120
Financial Statements
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements
as a whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry
in which they operate.
The Group is organised into 31 reporting units and the Group financial statements are a consolidation of these reporting units.
The reporting units vary in size. We identified five units that required a full scope audit of their financial information due to either
their size or risk characteristics. These were Wise Payments Limited, Wise Europe SA, Wise US Inc., Wise Australia Pty Ltd and Wise plc.
We also audited material consolidation journals. All reporting units were subject to audit procedures over cash at bank and in hand
balances, due to their contribution to the Group’s balance sheet. Our audit scope was determined by considering the significance of
each reporting unit’s contribution to revenue, and individual financial statement line items, with specific consideration to obtaining
sufficient coverage over significant risks.
We also considered the continuing improvement in information technology systems when determining the audit approach. We note
that these systems are not yet configured in a way that would allow for IT general controls to be effectively tested and relied upon,
therefore our audit approach was adapted.
We planned the audit to gain the required level of audit evidence from substantive testing across all balances and transactions,
including testing IT system reports that are relied on for the purpose of the audit. See Internal Control section in the Audit and
RiskCommittee Report.
The Group operates under a unitary control structure, meaning that all books and records are maintained and accessible in the UK.
Therefore all audit work was performed by the Group engagement team with the exception of procedures over laws and regulations
where we instructed six component auditor teams to perform specific procedures in order to leverage their local understanding of the
regulatory environment. The Group team also performed the audit of the Company.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of
our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements,
both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group Financial statements – Company
Overall materiality
£4,278,000. £1,340,000.
How we determined it
1% of revenue, averaged over three years 1% of total assets
Rationale for
benchmark applied
Based on the benchmarks used in the Annual Report,
revenue is in our view the primary measure used by
the shareholders in assessing the performance and
growth of the Group and is a generally accepted
auditing benchmark.
We believe that total assets is the primary measure
used by the shareholders in assessing the performance
of the entity, and is a generally accepted auditing
benchmark for non trading companies.
For each reporting unit in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality.
The range of materiality allocated across reporting units was between £401,903 and £4,031,089. Certain reporting units were audited
to a local statutory audit materiality that was also less than our overall Group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our
audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining
sample sizes. Our performance materiality was 62.5% of overall materiality (75% for the Company), amounting to £2,673,000 for the
Group financial statements and £1,005,000 for the Company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and
aggregation risk and the effectiveness of controls – and concluded that an amount in the middle of our normal range (at the upper
end for the Company) was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above £210,000
(Group audit) and £67,000 (Company audit) as well as misstatements below those amounts that, in our view, warranted reporting for
qualitative reasons.
Wise Annual Report and Accounts 2022 121
Conclusions relating to going concern
Our evaluation of the Directors’ assessment of the Group’s and the Company’s ability to continue to adopt the going concern basis
of accounting included:
• Obtaining and examining management’s base case forecasts for the twelve month period from the date of authorisation of the
financial statements, checking that these forecasts have been subject to board review and approval;
• Considering the historical reliability of management forecasting for cash flows by comparing budgeted results to actual performance
over a period of two years;
• Reviewing the key inputs into the model, such as volumes and take rate to ensure that these were consistent with our understanding
and the inputs used in other key accounting judgements in the financial statements such as deferred tax recoverability;
• Performing our own independent sensitivity analysis to understand the impact of changes in cash flow on the resources available
to the Group;
• Reviewing the covenants applicable to the Group’s borrowings and assessing whether the forecasts supported ongoing compliance
with the covenants; and
• Reading management’s paper to the Audit and Risk Committee in respect of going concern, and agreeing the forecasts set out
in this paper to the underlying base case cash flow model.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern for
a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Group’s and the
Company’s ability to continue as a going concern.
In relation to the Directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the
other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report,
any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are
required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic Report and Directors’ report, we also considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and
matters as described below.
Strategic Report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and Directors’
report for the year ended 31March2022 is consistent with the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the Group and Company and their environment obtained in the course of the audit,
we did not identify any material misstatements in the Strategic Report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Independent auditors’ report continued
Wise Annual Report and Accounts 2022122
Financial Statements
Corporate governance statement
ISAs (UK) require us to review the Directors’ statements in relation to going concern, longer-term viability and that part of the
corporate governance statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code,
which the Listing Rules of the Financial Conduct Authority specify for review by auditors of premium listed companies. Our additional
responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other
information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit, and
we have nothing material to add or draw attention to in relation to:
• The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks
and an explanation of how these are being managed or mitigated;
• The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability
to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
• The Directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment covers and
why the period is appropriate; and
• The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any
necessary qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-term viability of the Group was substantially less in scope than an audit
and only consisted of making inquiries and considering the Directors’ process supporting their statement; checking that the statement
is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is
consistent with the financial statements and our knowledge and understanding of the Group and Company and their environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the Group’s and Company’s position, performance, business
model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the
Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the Directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities in respect of the financial statements, the Directors are
responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that
they give a true and fair view. The Directors are also responsible for such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations
related to laws and regulations set by the Financial Conduct Authority (FCA), the National Bank of Belgium (NBB), the Australian
Prudential Regulation Authority (APRA), Financial Crimes Enforcement Network (FinCEN), Consumer Financial Protection Bureau
(CFPB), relevant state regulators in the United States as well as any other regulators regulating activities of subsidiaries of the Group,
as well as relevant Anti-Bribery and Corruption, Anti-Money Laundering and sanctions legislation in each of the territories in which
the Group operates, and we considered the extent to which non-compliance might have a material effect on the financial statements.
We also considered those laws and regulations that have a direct impact on the financial statements such as Companies Act 2006 and
relevant tax legislation in each of the territories in which the Group operates. We evaluated management’s incentives and opportunities
Wise Annual Report and Accounts 2022 123
for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal
risks were related to posting of inappropriate journal entries impacting revenue, misreporting of corporate cash and cash in transit
balances and understatement of customer liabilities. Audit procedures performed by the engagement team included:
• Review of correspondence with and reports to the regulators, including the FCA, NBB, APRA, FinCEN, CFPB, and certain relevant
state regulators in the United States;
• Review of management’s reporting to the Audit and Risk Committee in respect of compliance and legal matters;
• Enquiring of management and review of internal audit reports in so far as they related to the financial statements;
• Obtaining legal confirmations from legal advisors relating to material litigation;
• Identifying and testing journal entries, including those posted with double entries to unusual account combinations;
• Reviewing dispute logs, breaches/incidents log, legal expenses and whistleblowing reports;
• Testing a sample of intra-Group cash in transit balances at the year end to ensure not double counted;
• Performing analytics on cash concentration by geography and subsequent movement to test for round tripping of cash;
• Obtaining confirmations over selected customer balances direct from customers; and
• Reviewing customer complaints and testing a sample based on risk criteria for indications of systemic evidence of understatement
of customer liabilities.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements.
Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error,
as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received
from branches not visited by us; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• the Company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Board, we were appointed by the Directors on 21 September 2021 to audit the financial
statements for the period ended 31 March 2022, and subsequent financial periods. This is therefore our first period of uninterrupted
engagement.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements
form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct Authority
in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether
the annual financial report has been prepared using the single electronic format specified in the ESEF RTS.
Mark Jordan (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
28 June 2022
Independent auditors’ report continued
Wise Annual Report and Accounts 2022124
Financial Statements
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 March 2022
Note
2022
£m
2021
£m
Revenue 6 559.9 421.0
Cost of sales 7 (185.8 ) (151.7 )
Net credit losses on financial assets 7 (2.2 ) (8.8 )
Gross profit 371.9 260.5
Administrative expenses 7 (321.4 ) (217.5 )
Interest income from investments and operating assets 3.9 1.9
Interest expense from operating assets (6.7 ) (3.8 )
Other operating income 5.8 3.8
Other operating expenses (4.8 ) –
Operating profit 48.7 44.9
Finance expense (4.8 ) (3.8 )
Profit before tax 43.9 41.1
Income tax expense 9 (11.0 ) (10.2 )
Profit for the year 32.9 30.9
Other comprehensive (loss)/income
Items that may be reclassified to profit or loss:
Fair value loss on investments, net (17.2 ) (3.0 )
Currency translation differences 2.7 (3.8 )
Total other comprehensive loss (14.5 ) (6.8 )
Total comprehensive income for the year 18.4 24.1
Earnings per share*
Basic, in pence 10 3.40 3.31
Diluted, in pence 10 3.18 3.04
* See note 10 for further information on the weighted average number of shares included in the calculation of the comparable earnings per share.
All results are derived from continuing operations.
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated statement of profit or loss and other comprehensive income
Wise Annual Report and Accounts 2022 125
Consolidated statement of financial position
As at 31 March 2022
Note
2022
£m
2021
Represented*
£m
Non-current assets
Deferred tax assets 9 113.6 56.7
Property, plant and equipment 11 22.6 24.0
Intangible assets 12 20.3 27.5
Trade and other receivables 13 14.3 15.1
Total non-current assets 170.8 123.3
Current assets
Current tax assets 7.3 1.1
Trade and other receivables 13 137.6 81.3
Short-term financial investments 14 1,192.4 737.5
Cash and cash equivalents 15 6,056.3 3,358.6
Total current assets 7,393.6 4,178.5
Total assets 7,564.4 4,301.8
Non-current liabilities
Trade and other payables 16 15.7 22.6
Provisions 2.2 –
Deferred tax liabilities 9 0.5 2.0
Borrowings 17 90.2 95.2
Total non-current liabilities 108.6 119.8
Current liabilities
Trade and other payables 16 7,034.2 3,888.6
Provisions 1.6 2.6
Current tax liabilities 5.3 2.0
Borrowings 17 5.5 3.5
Total current liabilities 7,046.6 3,896.7
Total liabilities 7,155.2 4,016.5
Equity
Share capital 18 10.2 9.4
Equity merger reserve 19 (8.0 ) (8.0 )
Share-based payment reserves 200.5 124.5
Own shares reserve (0.4 ) –
Other reserves (17.8 ) (0.7 )
Currency translation reserve 0.2 (2.5 )
Retained earnings 224.5 162.6
Total equity 409.2 285.3
Total liabilities and equity 7,564.4 4,301.8
* Comparative balances have been represented to show the impact or reorganisation (refer to note 1.1) and to present the current provisions separately
from the trade and other payables (refer to note 16).
The accompanying notes form an integral part of these consolidated financial statements. The Group consolidated financial statements
on pages 125 to 153 were authorised for issue by the Board of Directors on 28 June 2022 and were signed on its behalf by:
Kristo Käärmann
Co-founder and CEO
28 June 2022
Consolidated statement of financial position
Wise Annual Report and Accounts 2022126
Financial Statements
Consolidated statement of changes in equity
For the year ended 31 March 2022
Note
Share
capital*
£m
Equity
merger
reserve
£m
Share-
based
payment
reserves
£m
Own
shares
reserve
£m
Other
reserves
£m
Currency
translation
reserve
£m
Retained
earnings
£m
Total
equity
£m
At 1 April 2020 9.4 111.1 63.8 – 2.3 1.3 8.9 196.8
Profit for the year – – – – – – 30.9 30.9
Fair value loss on investments – – – – (3.0 ) – – (3.0 )
Currency translation differences – – – – – (3.8 ) – (3.8 )
Total comprehensive income for the year – – – – (3.0 ) (3.8 ) 30.9 24.1
Share-based employee compensation expense – – 36.9 – – – – 36.9
Deferred tax on share-based compensation – – 26.6 – – – – 26.6
Issue of share capital – 0.9 (2.8 ) – – – 2.8 0.9
Reduction of share capital – (120.0 ) – – – – 120.0 0.0
At 31 March 2021 9.4 (8.0 ) 124.5 – (0.7 ) (2.5 ) 162.6 285.3
Profit for the year – – – – –
Fair value loss on investments, net 19 – – – – (17.2 ) – – (17.2 )
Currency translation differences – – – – – 2.7 – 2.7
Total comprehensive income for the year – – – – (17.2 ) 2.7 32.9 18.4
Issue of share capital 18 0.8 – – (0.8 ) – – – –
Share-based compensation expense 20 – – 42.5 – – – 1.0 43.5
Tax on share-based compensation 9 – – 58.7 – – – – 58.7
Employee share schemes 20 – – (25.2 ) 0.4 – – 28.1 3.3
Redemption of preference shares – – – – 0.1 – (0.1 ) –
At 31 March 2022 10.2 (8.0 ) 200.5 (0.4 ) (17.8 ) 0.2 224.5 409.2
* The share capital presented reflects the share capital structure of Wise plc as if it had been the ultimate parent of the Group as of the comparative date.
See note 18 for further details.
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated statement of changes in equity
Wise Annual Report and Accounts 2022 127
Consolidated statement of cash flows
For the year ended 31 March 2022
Note
2022
£m
2021
£m
Cash flows from operating activities
Cash generated from operations 21 3,134.1 2,076.3
Interest received 21.1 7.6
Interest expense paid (10.7 ) (6.0 )
Corporate income tax paid (6.5 ) (4.0 )
Net cash generated from operating activities 3,138.0 2,073.9
Cash flows from investing activities
Payments for property, plant and equipment (4.6 ) (2.3 )
Payments for intangible assets (7.3 ) (20.9 )
Payments for financial assets at FVOCI (868.4 ) (723.9 )
Proceeds from sale and maturity of financial assets at FVOCI 389.8 75.3
Proceeds from sublease 0.1 –
Net cash used in investing activities (490.4 ) (671.8 )
Cash flows from financing activities
Proceeds from issues of shares and other equity 3.4 0.9
Proceeds from borrowings 17 43.0 118.6
Repayments of borrowings 17 (43.0 ) (90.0 )
Principal elements of lease payments 17 (3.8 ) (3.9 )
Interest paid on leases 17 (0.9 ) (0.8 )
Net cash (used in)/generated from financing activities (1.3 ) 24.8
Net increase in cash and cash equivalents 2,646.3 1,426.9
Cash and cash equivalents at beginning of the year 15 3,358.6 2,077.6
Effects of exchange rate changes on cash and cash equivalents 51.4 (145.9 )
Cash and cash equivalents at end of the year 15 6,056.3 3,358.6
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated statement of cash flows
Wise Annual Report and Accounts 2022128
Financial Statements
Note 1. Presentation of the consolidated
financial statements
1.1 General information
and is incorporated and domiciled in the United Kingdom
of itsregistered office is 6
on the Group’s operations and principal activities is presented
in theStrategic Report.
The Company became the parent company of the former
Transferwise Limited group on 22 June 2021 as a consequence
of the pre-listing reorganisation (see below). The parent of the
group for the comparative period was Wise Payments Ltd
(formerly Transferwise Ltd).
Group reorganisation and listing
The Class A Shares of the Company were admitted to trading
on the London Stock Exchange on 7 July 2021. In relation to the
listing of the Company on the London Stock Exchange on 7 July
2021, the following steps were completed on 22 June 2021:
• the existing preferred and Ordinary Shares in Wise Payments
Ltd were re-designated as A Ordinary Shares and a share split
was undertaken;
• the existing shareholders of Wise Payments Ltd were offered
the opportunity to elect to receive the B Shares, in addition
to their A Shares, to create a dual-class share structure
comprising A Shares and B Shares. Such B Shares were issued
by way of bonus issue to such electing, existing shareholders;
• the existing shareholders in Wise Payments Ltd entered into
a share for share exchange with Wise plc, pursuant to which
Wise plc acquired the entire issued share capital of Wise
Payments Ltd in exchange for the issue of matching Class A
Shares, Class B Shares and a non-voting redeemable
preference share in Wise plc to the existing shareholders
(and any unexercised options and unvested awards over
shares in Wise Payments Ltd were exchanged for options
over Class A Shares in Wise plc).
As a result of the reorganisation, Wise Payments Ltd transferred
its share-based payment obligations to Wise plc, who will be
responsible for the settlement of the share-based payment
awards. At the same time the Company became the ultimate
parent company of the entities comprising, at that point in time,
the Group. This transfer did not impact the post-reorganisation
consolidated results of the Group.
1.2 Basis of preparation
The consolidated financial statements of the Group have been
prepared in accordance with the UK adopted international
accounting standards in conformity with the applicable
legal requirements of the Companies Act 2006.
Notes to the Group consolidated financial statements
For the year ended 31 March 2022
The Group reorganisation undertaken on 22 June 2021, as
disclosed in note 1.1, does not constitute a business combination
under IFRS 3 Business Combinations. Therefore it was accounted
for as a capital reorganisation. The set of consolidated financial
statements included in this Annual Report have been prepared as
a continuation of the consolidated financial statements of Wise
Payments Ltd. As such, the comparative equity of the Group is
adjusted to reflect the statutory share capital, equity merger
reserve and own share reserve of the Company as if it had always
been the ultimate parent of the Group, using the retrospective
presentation method.
The financial statements are prepared on a going concern basis.
All financial information is presented in millions of Pounds
Sterling (“£”), which is the Group’s presentation currency,
rounded to the nearest £0.1m, unless otherwise stated.
The financial statements have been prepared under the
historical cost convention, except for certain financial
assets measured atfair value.
The principal accounting policies applied in the preparation
of these consolidated financial statements are set out in note 2.
These policies have been consistently applied to all the years
presented, unless otherwise stated.
Preparation of financial statements requires significant
accounting judgements and estimates which have been laid out
innote 3.
Going concern
The Group’s business activities together with the factors likely
toaffect its future development and position are set out in the
Strategic Report.
The financial statements are prepared on a going concern basis
as the Directors are satisfied that the Group has the available
resources to continue in business for the foreseeable future.
The going concern assessment is based on the detailed forecast
prepared by management and approved by the Board (base
plan). As part of the going concern review, the Directors have
considered severe, but plausible, downside scenarios to stress
test the viability of the business. These downside scenarios
covered reduction in revenues, profitability, cash position and
liquidity as well as the Group’s ability to meet its regulatory
capital and liquidity requirements. Appropriate assumptions have
been made in respect to revenue growth and profitability, based
on the economic outlook over the forecast period. Appropriate
sensitivities have been applied in order to stress test the base
plan, considering situations in which future costs are substantially
higher than the forecast and future trading is less than forecasted.
Management expects that sufficient liquidity and regulatory
capital requirement headroom is maintained throughout the
forecast period.
The Directors have made inquiries of management and
considered forecasts for the Group and have, at the time of
approving these financial statements, a reasonable expectation
that the Group has adequate resources to continue in operations
for the foreseeable future.
Notes to the Group consolidated financial statements
Wise Annual Report and Accounts 2022 129
Notes to the Group consolidated financial statements continued
Note 1. Presentation of the consolidated financial
statements continued
1.3 Basis of consolidation
The financial statements comprise the consolidated financial
statements of Wise plc and its subsidiaries as at 31 March 2022.
Subsidiaries are all entities over which the Group has control. The
Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which
control is obtained by the Group and are de-consolidated from
the date that control ceases.
Inter-company transactions, balances and unrealised gains on
transactions between companies within the Group are eliminated
on consolidation. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the
transferred asset. Group accounting policies are consistently
applied to all entities and transactions.
Note 2. Summary of significant accounting policies
2.1 Changes in accounting policies and disclosures
Adoption of new or revised standards and interpretations
The following new or revised standards and interpretations
became effective for the Group from 1 April 2021:
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 –
Interest Rate Benchmark Reform – Phase 2
• Amendment to IFRS 16 – Covid-19 Related Rent Concessions
beyond 30 June 2021
The adoption of the above amendments did not have a
material impact on the Group. There are no other new or revised
standards or interpretations that are effective for the first time
forthe financial year beginning on or after 1 April 2021 that
wouldbe expected to have a material impact on the Group.
New standards, amendments and interpretations
not yet adopted
The following amendments are effective for annual periods
beginning on or after 1 January 2022. These amendments have
not been early adopted by the Group. None of the amendments
are expected to have a material impact on the Group in the
current or future reporting periods or on foreseeable
future transactions:
• Amendments to IAS 37 – Onerous Contracts: Cost of Fulfilling
a Contract
• Amendments to IAS 16 – Property, Plant and Equipment:
Proceeds before Intended Use
• Annual Improvements to IFRS (2018-2020 cycle): IFRS 9
Financial Instruments – Fees in the ’10 per cent’ Test for
Derecognition of Financial Liabilities
• IFRS 17 Insurance Contracts
• Amendments to IFRS 3 – Reference to the
Conceptual Framework
• Amendment to IAS 1 – Classification of Liabilities as
Current or Non-current
• Amendments to IAS 1 and IFRS Practise Statement 2 –
Disclosure of Accounting Policies
• Amendments to IAS 8 – Definition of Accounting Policies
• Amendments to IAS 12 – Deferred Tax related to Assets and
Liabilities arising from a Single Transaction
• Amendments to IFRS 10 and IAS 28 – Sale of contribution of
assets between an investor and its associate or joint venture
• Amendments to IFRS 4 Insurance contract – deferral of IFRS 9
• Annual improvements on IFRS 1, IFRS 9, IAS 41 and IFRS 16
2.2 Current versus non-current classification
The Group presents assets and liabilities in the statement of
financial position based on current or non-current classification.
An asset is current when it satisfies any of the following criteria:
• expected to be realised or intended to be sold or consumed
in the normal operating cycle;
• held primarily for the purpose of trading;
• expected to be realised within twelve months after the
reporting period;
• cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is current when it satisfies any of the following criteria:
• it is expected to be settled in the normal operating cycle;
• it is held primarily for the purpose of trading;
• it is due to be settled within twelve months after the
reporting period;
• there is no unconditional right to defer the settlement of the
liability for at least twelve months after the reporting period.
The Group classifies all other liabilities as non-current.
Deferredtax assets and liabilities are classified as non-current
assets and liabilities.
2.3 Foreign currencies translation
The Group’s consolidated financial statements are presented
inPounds Sterling. For each entity, the Group determines
thefunctional currency and items included in the financial
statements of each entity are measured using that
functional currency.
Transactions and balances
Transactions in foreign currencies are initially recorded by the
Group’s entities at their respective functional currency spot
ratesat the date the transaction is recognised.
Foreign exchange gains and losses resulting from the settlement
of such transactions and from the translation of monetary assets
and liabilities denominated in foreign currencies at year end
exchange rates are recognised in profit or loss (either as cost of
sales or operating expenses). Non-monetary assets and liabilities
are translated at historical exchange rates if held at historical cost
or year-end exchange rates if held at fair value, and the resulting
foreign exchange gains or losses are recognised in either the
income statement or shareholders’ equity depending on the
treatment of the gain or loss on the asset or liability.
Group companies
On consolidation, the results and financial position of foreign
operations (none of which has the currency of a hyperinflationary
economy) are translated into pounds as follows:
• assets and liabilities for each balance sheet presented are
translated at the closing exchange rate at the date of that
balance sheet;
• income and expenses are translated at average monthly
exchange rates (unless exchange rates fluctuate significantly
during the year, in which case the exchange rates at the
transaction date are used), and
• all resulting exchange differences are recognised in other
comprehensive income.
2.4 Cash and cash equivalents
Cash and cash equivalents include cash on hand, on-demand
deposits, Money Market Funds (MMF) and other short-term
high quality liquid investments with original maturities of three
Wise Annual Report and Accounts 2022130
Financial Statements
months or less and e-money held with payment processing
partners. Cash that has been paid out from the Group bank
account but has not been delivered to the bank account of the
beneficiary is classified as cash in transit. Cash collateral deposits
the Group holds with its counterparties are recognised under
Trade and other receivables in the statement of financial position.
Customer deposits
The Group recognises financial assets and liabilities for the
fundscustomers hold on their accounts (“Wise Accounts”)
and the funds collected from customers, as part of the money
transfer settlement process, that have not yet been processed.
The liability is recognised upon receipt of cash or capture
confirmation (depending on pay-in method), and is
derecognisedwhen cash is delivered to the beneficiary.
Additionally, pursuant to IAS 32, the Group considers it does not
have a legally enforceable right to set off these financial assets
and liabilities, or an intention to settle them on a net basis or
settle them simultaneously.
Principles to determine the point of delivery are the same as
applied in revenue recognition; see note 2.10. Cash that has
beenpaid out but has not yet been delivered to the beneficiary
account is reflected as cash in transit to customers.
The Group is subject to various regulatory safeguarding
compliance requirements with respect to customer funds.
Assafeguarding requirements may vary across the different
jurisdictions in which the Group operates, the Group holds
customer funds in segregated accounts and other high quality
liquid assets such as MMFs and investment grade bonds.
2.5 Financial assets
Investments and other financial assets
The Group classifies its financial assets, at initial recognition,
andsubsequently measures them at amortised cost, fair value
through profit or loss (FVTPL) and fair value through other
comprehensive income (FVOCI).
The classification of financial assets at initial recognition depends
on the financial asset’s contractual cash flows and the Group’s
business model for managing them.
In order for a financial asset to be classified and measured
at amortised cost or FVOCI, it needs to give rise to cash flows
thatare ‘solely payments of principal and interest (SPPI)’ on
theprincipal amount outstanding. This assessment is referred
toas the SPPI test and is performed at an instrument level.
Financialassets with cash flows that are not SPPI are classified
and measured at fair value through profit or loss, irrespective
of the business model.
The Group’s business model for managing financial assets
refers to how they are used in order to generate cash flows.
The business model determines whether cash flows will result
from collecting contractual cash flows, selling the financial assets,
or both. Financial assets classified and measured at amortised
cost are held with the objective to collect contractual cash
flows, while financial assets classified and measured at fair
value through OCI are held with the objective of both
holding to collect contractual cash flows and selling.
The Group classifies debt securities (e.g. bonds) as FVOCI
pursuant with the above policy as the contractual cash flows
are solely payments of principal and interest, and the objective
of the Group’s business model is achieved both by collecting
contractual cash flows and selling financial assets. On disposal
of these debt investments, any related balance within the FVOCI
reserve is reclassified to profit or loss.
Recognition and derecognition
Purchases and sales of financial assets are recognised on the
settlement date according to market conventions. Financial
assets are derecognised when the rights to receive cash flows
from the financial assets have expired or have been transferred
and the Group has transferred substantially all the risks and
rewards of ownership. Cash flows in relation to purchase or sale
of these instruments are classified as investing activities in the
consolidated cash flow statement.
Measurement
At initial recognition, the Group measures a financial asset
at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through profit or loss
are expensed in profit or loss. Financial assets at amortised costs
are subsequently measured using the effective interest method
and are subject to impairment. Gains and losses are recognised
inthe profit or loss when the asset is derecognised, modified
orimpaired.
Impairment
The Group recognises an allowance for expected credit losses
(ECL) for trade receivables and uses a simplified approach in
calculating ECLs. Therefore, the Group does not track changes
incredit risk, but instead recognises a loss allowance based on
lifetime ECLs at each reporting date. The Group has established
a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific
to the debtors and the economic environment.
For debt instruments held at FVOCI, the Group applies the low
credit risk simplification. At every reporting date, the Group
evaluates whether or not the debt instrument is considered
to have low credit risk using all reasonable and supportable
information that is available without undue cost or effort.
In making that evaluation, the Group reassesses the internal
credit rating of the debt instrument. In addition, the Group
considers that there has been a significant increase in credit
risk when contractual payments are more than 30 days past due.
The Group’s debt instruments held at FVOCI consisted solely
of quoted bonds that are graded in the top investment category
Aa2 and better by Moody’s Credit Rating Agency and, therefore,
are considered to be low credit risk investments. It is the Group’s
policy to measure ECLs on such instruments on a 12-month basis.
However, when there has been a significant increase in credit risk
since origination, the allowance will be based on the lifetime ECL.
The Group uses the ratings from Moody’s both to determine
whether the debt instrument has significantly increased in
credit risk and to estimate ECLs.
Refer to notes 2.19 and 4.2 for further information on trade
receivables and expected credit losses.
2.6 Derivative financial instruments
Derivative financial instruments are used to manage exposure
to market risks. The principal derivative instruments used by the
Group are foreign currency swaps, foreign exchange forwards
and non-deliverable foreign exchange forwards. The Group does
not hold or issue derivative financial instruments for trading or
speculative purposes.
Changes in the fair value of any derivative instruments that do
not qualify for hedge accounting are recognised immediately
inthe income statement.
2.7 Property, plant and equipment
Property, plant and equipment is stated at historical cost less
accumulated depreciation and any accumulated impairment
losses. Historical cost includes expenditure that is directly
attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner
intended by management.
Wise Annual Report and Accounts 2022 131
Note 2. Summary of significant accounting
policies continued
Depreciation is charged so as to allocate the cost of assets less
their residual value over their estimated useful lives, using the
straight-line method. Right-of-use assets are depreciated over
the lease term (2-7 years). Capitalised reconstruction and internal
design costs of leased office space (shown as ’Leased office
improvements’ in the Notes to the Group Consolidated Financial
Statements) are depreciated over the lease term (typically 2-5
years) and other office equipment over 2 years.
Computer equipment is not recorded into property, plant and
equipment but expensed, as low value short-lived equipment in
the Group.
2.8 Intangible assets – Internally generated software
development costs
The Group develops software used in provisioning of its services.
Development costs that are directly attributable to the design,
development and testing of the software controlled by the
Group are recognised as intangible assets when the following
criteria are met:
• it is technically feasible to complete the software so that
it willbe available for use;
• management intends to complete the software;
• there is an ability to use the software;
• it can be demonstrated how the software will generate
probable future economic benefits;
• adequate technical, financial and other resources to complete
the development and to use the software are available; and
• the expenditure attributable to the software during its
development can be reliably measured.
Costs associated with maintaining computer software are
recognised as an expense as incurred.
Directly attributable costs that are capitalised as part of the
software product comprise the software development
employeecosts.
Other development expenditures that do not meet these criteria
are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an
asset in a subsequent period.
Capitalised development costs, domain and licence purchases
are recorded as intangible assets and amortised over their
estimated useful economic lives. Intangible assets are assessed
for impairment whenever there is an indicator that they might
be impaired, for example when the assets are no longer in use
and need to be decommissioned.
The Group amortises intangible assets on a straight-line basis
over 3 years, except for mobile applications which are amortised
over 2 years and licence purchases that are amortised over
a period of 2-10 years.
2.9 Trade and other payables
Trade payables consist of obligations to pay for goods and
services that have been acquired in the ordinary course of
business from suppliers on the basis of normal credit terms
and do not bear interest. Other payables, which relate to Wise
Accounts and money transfers that have not been processed by
the Group at the reporting date, are non-derivative liabilities to
individuals or business customers for money they hold with the
Group and do not constitute borrowings.
Payables are initially recognised at fair value and subsequently
measured at amortised cost.
2.10 Revenue recognition
The Group primarily generates revenue from money transfers
and Wise Account, including conversions and debit card services.
The Group recognises revenue according to the principles of
IFRS 15 using the five-step model:
1. Identify the contracts with customers
2. Identify the performance obligations in the contract
3. Determine the transaction price
4. Allocate the transaction to the performance obligations
in the contract
5. Recognise the revenue when (or as) the entity satisfies
the performance obligation
A customer enters into the contract with the Group at the
time of opening a Wise Account or initiating a money transfer.
Generally, the customer agrees to the contractual terms by
formally accepting, on Wise’s website or the App, the terms
and conditions of the respective service, which detail the
Group’s performance obligations and fees.
In the case of debit card services, it is at the time the card
is made available for use and the customer is able to either
make a payment or a withdrawal.
The fees charged to customers are shown to them upfront prior
to the transaction being initiated. For international transfers,
a single upfront fee per transaction is charged, consisting of
a fixedand variable amount. The amount of both the fixed and
thevariable portion of the fee depends on a number of factors,
including the currency route, the transfer size, the type of
transaction being undertaken and the payment method used.
As there is typically a single performance obligation associated
with each type of service provided to a customer, the revenue is
recognised at the point in time when the performance obligation
has been satisfied. For money transfers it is upon delivery of
funds to the recipient. In case of money conversions it is when
a customer balance is converted into a different currency and
for debit card services it is upon transaction capture.
The timing required for the Group to process the payment to
therecipient and, hence, to satisfy its performance obligations
largely depends on the processing time its banking partners
require to deliver funds to the recipient. Therefore, the revenue
isdeferred until the funds are delivered. In certain jurisdictions
where the Group has settlement accounts with the Central Banks
or in the case of transfers between Wise Accounts or conversions
within a Wise Account, such transactions are fulfilled instantly.
Other revenue
In FY2022 the Group launched a new investment product which
allows customers to purchase investments using their Wise
Account balance (“Assets”). The Group generates revenue from
charging a fee on the value of the assets under management.
Therevenue, which is accrued on a daily basis, is recognised over
time, in line with the period the Group provides its services to
Assets customers.
The Group acts as a Matched Principal Broker and does not
retain control nor benefits from the Assets. Therefore, the Group
does not recognise financial assets and liabilities for the Assets.
2.11 Other income recognition from contracts
with partners
Income from contracts with partners is recognised over their
contractual terms as the relevant performance conditions are
met. The contracts may contain certain performance conditions
and milestones. The Group defers any cash consideration
received up front until it is probable that these conditions
and milestones are met.
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022132
Financial Statements
2.12 Interest income and expense
Interest income from investments and interest earned from
holding customer funds on Wise Accounts is recognised as
interest income from investments and operating assets using
the effective interest rate method. Investments are classified
as financial assets at fair value through other comprehensive
income, whilst Wise Accounts holding customer funds are
financial assets measured at amortised cost.
Interest expense incurred from holding customer funds on
Wise Accounts primarily relate to negative interest rates on
euro denominated balances.
2.13 Leases
A lease is a contract or part of a contract that conveys to the
lessee the right to control the use of an identifiable asset for
a period of time in exchange for consideration.
The Group as the lessee
Initial measurement
At the commencement date, a lessee shall recognise a right-of-
use asset and a lease liability. At the commencement date,
a lessee shall measure the right-of-use asset at cost. The cost
of the right-of-use asset shall comprise:
• the amount of the initial measurement of the lease liability;
• any lease payments made at or before the commencement
date, less any lease incentives received;
• any initial direct costs incurred by the lessee; and
• an estimate of costs to be incurred by the lessee in dismantling
and removing the underlying asset, restoring the site on which
it is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease.
Right-of-use of assets are recorded within the ‘Property, plant
and equipment’ line in the statement of financial position and
are measured at an amount equal to the lease liability; they
are predominantly related to office spaces leased in various
locations. The lease liability is measured at the present value
of the lease payments that are not paid at that date. The lease
payments are discounted using the interest rate implicit in
the lease, if that rate can be readily determined.
If that rate cannot be readily determined, the lessee shall use
thelessee’s incremental borrowing rate, being the rate that
theindividual lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment with similar terms,
security and conditions.
At the commencement date, the lease payments included in
themeasurement of the lease liability comprise the following
payments for the right to use the underlying asset during the
lease term that are not paid at the commencement date:
• fixed payments, less any lease incentives receivable;
• variable lease payments that depend on an index or
a rate, initially measured using the index or rate as at the
commencement date. Variable lease payments that depend
on an index or a rate include, for example, payments linked
to a consumer price index;
• amounts expected to be payable by the lessee under
residual value guarantees;
• the exercise price of a purchase option if the lessee is
reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease
term reflects the lessee exercising an option to terminate
thelease.
Subsequent measurement
After the commencement date, a lessee measures the right-of-
use asset estimated by applying a cost model. To apply a cost
model, a lessee measures the right-of-use asset at cost less any
accumulated depreciation and any accumulated impairment
losses and adjusted for any remeasurement of the lease liability.
Right-of-use assets are generally depreciated over the shorter
ofthe asset’s estimated useful life and the lease term on a
straight-line basis.
Otherwise, the lessee shall depreciate the right-of-use asset from
the commencement date to the earlier of the end of the useful
life of the right-of-use asset or the end of the lease term.
If there are changes in lease payments, there may be a need to
remeasure the lease liability. A lessee shall recognise the amount
of the remeasurement of the lease liability as an adjustment to
the right-of-use asset. However, if the carrying amount of the
right-of-use asset is reduced to zero and there is a further
reduction in the measurement of the lease liability, a lessee
shallrecognise any remaining amount of the remeasurement
in profit or loss.
The Group has elected not to apply the requirements of IFRS 16
to short-term leases and leases for which the underlying asset is
of low value. Payments associated with short-term leases and all
leases of low-value assets are recognised on a straight-line basis
as an expense in profit or loss. Short-term leases are leases with
a lease term of 12 months or less. Low-value assets comprise
IT and office equipment.
The Group presents the payments of principal and interest
on lease liabilities as part of financing cash flows.
Extension and termination options
Extension and termination options are included in a number
of property and equipment leases across the Group. These are
used to maximise operational flexibility in terms of managing
the assets used in the Group’s operations. The extension and
termination options held are exercisable only by the Group
andnot by the lessors.
At the reporting date, the Group is exposed to future cash
outflows that are not reflected in the measurement of lease
liabilities. These arise from extension options and a termination
option available to the Group for a number of lease agreements
for office spaces. The Group initially assesses at lease
commencement whether it is reasonably certain it will exercise
the options and subsequently reassesses it if there is a significant
event or significant changes in circumstances within its control.
The Group has concluded it is not reasonably certain that the
options will be exercised.
2.14 Cost of sales
Cost of sales comprises the costs that are directly associated
with the Group’s principal revenue stream of money transfer
and conversion services. This includes:
• bank and partner fees, including any applicable discounts,
incurred in processing customer transfers;
• net foreign exchange costs generated due to customer
transactions and costs related to the difference between
the published mid-market rate offered to customers and the
rate obtained by the Group in acquiring currency as required
as well as product losses that are directly generated from
consumer transactions, including chargeback losses.
Wise Annual Report and Accounts 2022 133
Note 2. Summary of significant accounting
policies continued
2.15 Current and deferred tax
The tax expense for the year comprises current and deferred tax.
Tax is recognised in the income statement, except to the extent
that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
The current tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the balance sheet date in the
countries where the Company and its subsidiaries operate and
generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected
to be paid to the tax authorities.
Deferred tax is recognised on temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts in the Group financial statements. Deferred tax is
determined using tax rates (and laws) that have been enacted
or substantively enacted by the balance sheet date and are
expected to apply when the related deferred tax asset is
realised, or the deferred tax liability is settled.
Deferred tax assets are recognised only to the extent that it is
probable that future taxable profit will be available against which
the temporary differences can be utilised.
Deferred tax assets on share-based payments are recognised for
the share options not exercised at the balance sheet date. The
deferred tax assets on share-based payments are determined
based on the share price at the balance sheet date. The impact
of recognition is split between income tax expense in profit
or loss for the year, for the element up to the cumulative
remuneration expense; and the share-based payment reserve,
recognised directly in equity, for the element in excess of the
related cumulative remuneration expense. Refer to note 9 for
further details.
The impact of the recognition of deferred tax assets on losses is
split between the share-based payment reserve for the element
of the tax deduction on exercise in excess of the related
cumulative remuneration expense and the income tax expense
in profit or loss for the balance of the loss.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities and when the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities and there is an
intention to settle the balances on a net basis.
2.16 Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary
benefits and accumulating annual leave that are expected to be
settled wholly within 12 months after the end of the period in
which the employees render the related service are recognised
in respect of employees’ services up to the end of the reporting
period and are measured at the amounts expected to be paid
when the liabilities are settled. The liabilities are presented as
current employee benefit obligations in the balance sheet.
Long-term obligation
Employee entitlement for long-term leave is recognised as a
liability using probability of staff departures and leave utilisation.
Share-based payments
The Company operates a scheme, under which the Group
receives services from employees as consideration for equity
instruments of the Company. The fair value of the employee
services received in exchange for the grant of the options and
awards is recognised in employee benefit expenses together
with a corresponding increase in equity (share-based payment
reserves), over the period in which the service and the
performance conditions are fulfilled (the vesting period).
The total amount to be expensed is determined by reference
tothe fair value of the options granted. Non-market vesting
conditions are included in assumptions of the number of
optionsand awards that are expected to vest.
The total amount of the grant expense is recognised over
the vesting period. At each reporting date, the entity revises
its estimates of the number of options and awards that are
expectedto vest based on the non-market vesting conditions. It
recognises the impact of the revision to original estimates, if any,
in the statement of comprehensive income, with a corresponding
adjustment to the share-based payment reserves. Upon exercises
of share options, the impact is recognised in retained earnings.
Refer to note 3.4 for the significant accounting estimate in
relation to employee share-based payments.
2.17 Employee share trust
The Group provides finance to the Employee Share Ownership
Plan (ESOP) Trust to subscribe for newly issued share capital, to
meet the Group’s obligation to provide shares when employees
exercise their options or awards. Costs of running the ESOP Trust
are charged to the income statement. Shares held by the ESOP
Trust are deducted from reserves and presented in equity as own
shares until such time that employees exercise their awards.
2.18 Segment reporting
The Group is managed on the basis of a single segment. This is
consistent with the internal reporting provided to, and regularly
reviewed by, the Chief Operating Decision Maker (“CODM”),
which is currently the Board of Directors of the Group. The
Group has therefore determined that it has only one reportable
segment under IFRS 8, which is ‘cross border payment services’.
Refer to note 5.
2.19 Trade and other receivables
Trade and other receivables primarily consist of amounts due
from payment processors and collateral deposits the Group
holds with its counterparts. Trade and other receivables are
initially recognised at fair value and subsequently measured
at amortised cost less impairment for expected credit losses.
TheGroup applies the simplified approach permitted by IFRS 9,
which requires expected lifetime credit losses to be recognised
from the initial recognition of the receivables. Refer to note 2.5
above for further information on expected credit losses.
2.20 Earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to the owners of the Group;
• by the weighted average number of Ordinary Shares
outstanding during the financial year after deducting shares
held by the ESOP Trust.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:
• the after-income tax effect of interest and other financing
costs associated with dilutive potential Ordinary Shares; and
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022134
Financial Statements
• the weighted average number of additional Ordinary Shares
that would have been outstanding, assuming the conversion
ofall dilutive potential Ordinary Shares. For the purposes of
diluted earnings per share it is assumed that any performance
conditions attached to the schemes have been met at the
balance sheet date.
2.21 Borrowings
Borrowings are recognised initially at fair value, net of transaction
costs incurred, and are subsequently carried at amortised cost.
Any difference between the proceeds (net of transaction costs)
and the redemption value is recognised in the income statement
over the term of the borrowing using the effective interest
method. Fees paid on the establishment of loan facilities are
recognised as transaction costs of the loan to the extent that
it is probable that some or all of the facility will be drawn down.
In this case, the fee is deferred and treated as a transaction cost
when the draw-down occurs. The Group presents the impact of
transaction costs as part of financing cash flows.
2.22 Provisions
Provisions are liabilities where the exact timing and amount of
the obligation are uncertain. Provisions are recognised when the
Group has a present obligation (legal or constructive) as a result
of past events, when an outflow of resources is probable to settle
the obligation and when an amount can be reliably estimated.
Where the time value of money is material, provisions are
discounted to current values using appropriate rates of interest.
The unwinding of the discounts is recorded in net finance
income or expense.
2.23 Specific allowance for expected credit losses
The Group may recognise specific allowance for individually
material financial assets for which credit quality deteriorates
significantly. The Group takes into account specific facts and
circumstances that might indicate impairment, such as litigation
risk, credit rating and financial results of the counterparty. The
Group also uses the weighted probability method to assess
the recoverability of the amounts and monitors subsequent
changes in the assumptions and estimates on a regular basis.
The recognised specific allowance amount at the year ended
31 March 2022 is £7.4m (2021: £6.7m). This allowance for credit
losses is related to all of our funds being improperly withheld by
a Brazilian financial institution, MS Bank S.A. Banco de Câmbio
and all of the accounts receivable from the same party. The
change in the allowance amount within the year relates to
FX movements.
2.24 Legal provisions and contingent liabilities
The Group may become party to litigation proceedings from
time to time and recognise a legal provision when a) it has a
present obligation as the result of a past event, b) it is probable
the outflow of economic resources will be required to settle the
obligation and c) a reliable estimate of the such amount can be
made. If these conditions are not met, the Group discloses
contingent liabilities; unless the likelihood of the outflow of
the economic benefit is remote.
The Group did not recognise any legal provision in relation to
ongoing litigations for the year ended 31 March 2022 (2021:nil). In
addition, the probability of the outflow of the economic benefit
for any ongoing litigations is considered remote, thus the Group
does not disclose any contingent liability for the year ended
31 March 2022 (2021:nil).
Note 3. Significant accounting judgements,
estimates and assumptions
The preparation of the Group’s consolidated financial statements
requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the accompanying
disclosures. Uncertainty about these estimates and
assumptions could result in outcomes that require a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year.
Judgements
In the process of applying the Group’s accounting policies,
management has made the following judgements, which have
the most significant effect on the amounts recognised in the
consolidated financial statements:
3.1 Customer balances
The Group recognises financial assets and corresponding
liabilities for the funds customers hold on their Wise Accounts
and the funds the Group receives as part of the money transfer
settlement process. At the point that the cash is received from
the customer, the Group becomes party to a contract and has
a right and an ability to control the economic benefit from the
cash flows associated with this balance. Additionally, pursuant
to IAS 32, the Group considers it does not have a legally
enforceable right to set off these financial assets and liabilities,
or an intention to settle them on a net basis or settle them
simultaneously. Therefore, Management has concluded that the
recognition of the financial assets and their respective liabilities
on the balance sheet is appropriate.
3.2 Deferred taxes
Deferred tax judgement is not dependent on assumptions or
other key sources of estimation uncertainty, at the end of the
reporting period, that could have a significant risk of causing
material adjustment to the carrying amounts of assets and
liabilities within the next 12 months. However, it does require
estimates that are subject to inherent uncertainty.
Deferred tax assets are recognised for unused tax losses, future
share option tax deductions and other temporary differences to
the extent that it is probable that sufficient taxable profit will be
available against which these assets can be utilised. Management
judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and
the level of future taxable profits. A significant element of the
deferred tax asset relates to share-based payments and as
referred below, in note 3.4, the share price at the balance sheet
date is used in determining the amount of deferred tax asset.
In assessing the probability and sufficiency of future taxable
profit, the management takes into account long-term forecasts
and whether future profit forecasts are considered ‘more
likely than not’ as supporting evidence for deferred tax asset
recognition. The deferred tax asset is recognised at £113.6m
(2021: £56.7m).
3.3 Net gains and losses from foreign
exchange differences
The Group classifies net foreign exchange gains and losses
from customer transactions, including the costs related to the
difference between the published mid-market rate offered to
customers and the rate obtained by the Group in acquiring
currency as required, as cost of sales. The Group considers
these costs as directly related to and incurred as part of
providing services to the customers. The total net foreign
exchange differences recognised in the cost of sales for
the year ended 31 March 2022 is £13.3m (2021: £18.3m).
Estimates and assumptions
The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date, that have
a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are
described below. The Group based its assumptions and estimates
on parameters available when the consolidated financial
statements were prepared.
Wise Annual Report and Accounts 2022 135
Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances
arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
3.4 Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which
depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the
valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making
assumptions about them.
The cost of share options is determined by the fair value at the date when the grant is made using the Black Scholes model. Further
details on the assumptions are disclosed in note 20.
If the average share price within the financial year was higher or lower by 5%, the annual share-based payment compensation expense
would be higher or lower by up to £1.1m (2021: £0.8m).
Additionally, the Group uses the share price at the balance sheet date in determining the deferred tax asset. Refer to note 9.
Note 4. Financial risk and capital management
This note further explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial
performance. Current year profit and loss information has been included where relevant to add context.
In the course of its business, the Group is exposed to the main financial risks: liquidity, credit and market risk from its use
of financial instruments. The Group’s financial risk management programme seeks to minimise potential adverse effects on the
Group’s financial performance.
4.1 Liquidity risk
The Group monitors its risk of shortage of funds using cash flow forecasting. Management monitors rolling forecasts of the Group’s
liquidity requirements to make sure it has sufficient cash to meet operational needs. The Group’s objective is to maintain a balance
between continuity of funding and flexibility through the use of its revolving credit facility, share capital and lease contracts.
The Group’s approach to managing liquidity risk is to make sure, as far as possible, that it always has enough liquidity to meet
its liabilities when due, under both normal and stressed scenarios, without incurring unacceptable losses or risking damage to the
Group’s position.
The Group assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Group has access
to a £212.0m multi currency revolving facility and does not currently have debt maturing within 12 months.
The breakdowns of trade payables and borrowings into current and non-current are shown in notes 16 and 17. See also note 4.5
for the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments.
4.2 Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations.
Credit risk is managed at Group level and comes mainly from the Group’s cash and cash equivalents held in banks and investments
in bonds. The impairment provisions for financial assets disclosed in note 7 are based on assumptions about risk of default and
expected loss rates.
If a bank or other financial institution has no independent credit rating, the Group evaluates its credit quality by analysing its financial
position, past experience and other factors.
The Group’s maximum exposure to credit risk by class of financial asset is as follows:
2022
£m
2021
£m
Asset category
Cash and cash equivalents 6,056.3 3,358.6
Short-term financial investments 1,192.4 737.5
Trade and other receivables 130.1 76.3
Total assets subject to credit risk 7,378.8 4,172.4
Due to the short duration of the cash and cash equivalents (less than 3 months), the fair value approximates the carrying value at each
reporting period.
Credit risk is mitigated as financial assets subject to credit risk are held with reputable institutions or in highly rated financial investments.
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022136
Financial Statements
The Group’s financial assets breakdown by credit rating of institution is as follows:
2022
£m
2021
£m
Credit rating (Moody’s)
Cash and cash equivalents
Aa 4,249.5 2,316.9
A 1,519.0 710.6
Baa, Ba, B 62.4 73.3
Caa 0.8 –
No rating* 36.3 99.8
Cash in transit 188.3 158.0
Total cash and cash equivalents subject to credit risk 6,056.3 3,358.60
Short-term financial investments
Aa 1,192.4 737.5
Total short-term financial instruments subject to credit risk 1,192.4 737.5
Trade and other receivables
Aa 36.3 14.7
A 26.8 1.0
Baa, Ba, B 20.8 15.4
No rating* 46.2 45.2
Total trade and other receivables subject to credit losses 130.1 76.3
* ‘No rating’ includes payment providers and banks with no public credit rating.
Before deciding to onboard third parties, the Group undertakes due diligence measures to assess and mitigate potential credit risks.
4.3 Market risk
Cash flow and fair value interest rate risk
The Group is exposed to interest rate risk from floating interest rate borrowings (note 17) and manages the potential that financial
expenses increase when interest rates increase. Sensitivity analysis is used to assess the interest rate risk.
In a stressed scenario a change of 10 basis points in the interest rates of interest-bearing liabilities at the reporting date would have
changed profit and equity by £0.1m (2021: £0.1m).
The Group is also exposed to interest rate risk from negative interest rates on safeguarded customer balances. This risk is deemed
negligible for the Group, due to its business model, as interest rate costs can be passed onto the customer in due course as well as
general macroeconomic trends can result in interest rate increases on deposits.
Foreign exchange risk
The Group is exposed to foreign exchange rate movement from holding assets and liabilities in different currencies and guaranteeing
customers a foreign exchange rate on their international transfers for a limited period of time. Wise actively monitors foreign exchange
risk, and exposures are managed through a combination of natural hedging and treasury products hedging.
The table below presents the Group’s net position (difference between financial assets and liabilities) across its main currencies
and the Group’s exposure to foreign exchange risk at the end of each reporting period.
Wise Annual Report and Accounts 2022 137
Note 4. Financial risk and capital management continued
The Group’s exposure to foreign exchange risk by currency is as follows:
2022
£m
2021
£m
Net exposure by currency
AUD 17.3 4.7
INR 14.7 13.7
BRL 10.8 3.7
MYR 4.1 0.4
USD (27.8) (9.8)
EUR (10.5) (21.9)
CAD (6.9) (0.9)
IDR (4.0) (3.5)
VND (3.6) (2.9)
JPY (3.4) 0.6
Other financial assets 12.9 25.2
Other financial liabilities (17.7) (18.2)
The Group’s sensitivity to foreign exchange fluctuations by currency is as follows:
2022
£m
2021
£m
Sensitivity to 5% exchange rate change
AUD 0.9 0.2
INR 0.7 0.7
BRL 0.5 0.2
MYR 0.2 0.0
USD (1.4) (0.5)
EUR (0.5) (1.1)
CAD (0.3) 0.0
IDR (0.2) (0.2)
VND (0.2) (0.1)
JPY (0.2) 0.0
Other financial assets 0.6 1.3
Other financial liabilities (0.9) (0.9)
The Group’s sensitivity analysis shows that a 5% strengthening or weakening of the functional currency against the non-functional
currency of its subsidiaries would result in the total comprehensive income, excluding tax effect, being £0.7m lower (2021:£0.4m lower).
A 5% weakening would have an equal but opposite effect on total comprehensive income for the year, excluding tax effect.
The Group considers a 5% strengthening or weakening of the functional currency against the non-functional currency of its subsidiaries
as a reasonably possible change in foreign exchange rates.
4.4 Treasury and capital risk management
Treasury and capital risk mainly comprises:
Treasury risk:
The risk that the Group is unable to meet its contractual or contingent obligations or that it does not have the appropriate amount,
tenor and composition of funding and liquidity to support its assets.
Capital risk:
The risk that the Group has an insufficient level of capital to support its normal business activities and to meet its regulatory capital
requirements, both under normal operating environments and stressed conditions.
The Group’s capital comprises ordinary share capital, reserves and retained earnings.
The Group’s objectives when managing capital risk are to:
• safeguard the Group’s ability to continue as a going concern, so that the Group can continue to provide returns for shareholders
and benefits for other stakeholders;
• maintain an optimal capital structure to reduce the cost of capital; and
• adhere to regulatory requirements in each jurisdiction.
Since 1 January 2022 the Group is subject to prudential regulatory consolidation which is subject to prudential sourcebook for MIFID
Investment Firms (“MIFIDPRU”). This is the case due to the existence of TINV Ltd, a group UK FCA-regulated investment firm subject
to the same rules.
Up to 31 December 2021, the Group followed prudential consolidation subject to Capital Requirements Directive IV (“CRD IV”) which set
out the framework for UK Capital Requirements Regulation (“CRR”) and the FCA Prudential sourcebook for investment firms (”IFPRU”).
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022138
Financial Statements
Both TINV Ltd (MIFID Investment Firm) and the Group (MIFID Investment Group) are classified as Non-small and Non-interconnected
investment firms (“SNI”).
Overall own funds requirement
The Group own funds requirement is subject to the variable own funds requirement that is the highest of:
1. its permanent minimum capital requirement (i.e. its initial capital requirement);
2. its fixed overheads requirement (“FOR”); and
3. its K-factor requirement (“KFR”).
The Group’s Internal Capital Adequacy Assessment (“ICARA”) is a continuous risk assessment process which considers the business
model implication on capital on an on-going basis pursuant to the guidance of MIFIDPRU 7 (similar to the Pillar 2 ICAAP process that
was followed by the Group under CRR).
4.5 Carrying amounts and fair values of financial instruments
The Group’s financial assets mainly consist of cash, short-term trade and other receivables and listed bonds. Its financial liabilities
include trade liabilities and obligations towards financial institutions. All purchases and sales of financial assets are recognised on the
settlement date according to market conventions.
The Group classifies its financial assets at amortised cost only if both of the following criteria are met:
• the asset is held within a business model whose objective is to collect the contractual cash flows; and
• the contractual terms give rise to cash flows that are solely payments of principal and interest.
Financial assets at fair value through other comprehensive income (FVOCI) comprise investments into highly liquid bonds with
the objective of both collecting contractual cash flows and selling financial assets.
Financial assets and liabilities by measurement basis:
2022
£m
2021
£m
Financial assets at amortised cost
Long-term receivables 0.9 1.0
Short-term trade and other receivables 129.2 76.3
Cash and cash equivalents 6,056.3 3,358.6
Total financial assets at amortised cost 6,186.4 3,435.9
Financial liabilities at amortised cost
Non-current lease liabilities (11.7) (16.6)
Non-current borrowings (78.5) (78.6)
Non-current trade and other payables (0.1)
Current lease liabilities (5.5) (3.5)
Current trade and other payables (6,997.7) (3,859.3)
Total financial liabilities at amortised cost (7,093.5) (3,958.0)
Financial assets at FVOCI
Short-term financial investments 1,192.4 737.5
Total financial assets at FVOCI 1,192.4 737.5
Fair value hierarchy
The Group estimates that the fair values of assets and liabilities reported at amortised cost in the statement of financial position as at
31 March 2022 and 31 March 2021 do not materially differ from the carrying amounts reported in the consolidated financial statements.
The carrying amount of current accounts receivable and payable less impairments is estimated to be approximately equal to their
fair value.
IFRS 13 has sought to make measurements at fair value more consistent and comparable by categorising fair value according
to the hierarchy of the inputs used to measure them. These are categorised from Level 1 to Level 3 as follows:
• Level 1 – Quoted prices in active markets for identical assets or liabilities which the Group can access at the date of measurement.
• Level 2 – Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly.
• Level 3 – Inputs that are not based on observable market data.
Wise Annual Report and Accounts 2022 139
Note 4. Financial risk and capital management continued
The following table presents the Group’s assets and liabilities that are measured at fair value by the level in the fair
value hierarchy as at the reporting date:
2022
£m
2021
£m
Measurement Level 1
Financial assets
Short-term financial investments 1,192.4 737.5
Level 1 financial assets total 1,192.4 737.5
Financial instruments in level 1
The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market
is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing
service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis.
The quoted market price used for financial assets held by the Group is the current close price at the balance sheet date.
If the fair value of the short-term financial assets would change by 1% at the reporting date, that would result in a £11.9m (2021: £7.4m)
increase or decrease in the balances and the corresponding impact on the comprehensive income.
Financial instruments in level 2 and 3
Throughout and at the end of the reporting period, the Group had no financial instruments in level 2 and 3 consistent with prior year.
Contractual maturity of financial liabilities based on undiscounted cash flows:
2022
£m
2021
£m
Less than 1 year
Current lease liabilities (6.1) (4.4)
Current borrowings (3.3) (2.4)
Current trade and other payables (6,997.7) (3,859.3)
Total financial liabilities (7,007.1) (3,866.1)
Between 1 and 5 years
Non-current lease liabilities (12.4) (18.3)
Non-current borrowings (83.3) (84.8)
Non-current trade and other payables (0.1) –
Total financial liabilities (95.8) (103.1)
Current and non-current borrowings include principal and interest.
Note 5. Segment information
Description of segment
The information regularly reported to the Board of Directors, which is considered to be the CODM, for the purposes of resource allocation
and the assessment of performance, is based wholly on the overall activities of the Group. Based on the Group’s business model,
the Group has determined that it has only one reportable segment under IFRS 8, which is ‘Cross-border payment services provider’.
The Group’s revenue, assets and liabilities for this one reportable segment can be determined by reference to the statement of
comprehensive income and the statement of financial position. The analysis of revenue by type of customer and geographical region,
is set out in note 6.
At the end of each period, the majority of the non-current assets were carried by Wise Payments Ltd in the UK. Based on the location
of the non-current asset, the following geographical breakdown on non-current assets is prepared:
2022
£m
2021
£m
Non-current assets by geographical region
United Kingdom 146.5 99.4
Rest of the world 24.3 23.9
Total non-current assets 170.8 123.3
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022140
Financial Statements
Note 6. Revenue
Year ended 31 March
2022
£m
2021
£m
Revenue by customer type
Personal 433.2 341.3
Business 126.7 79.7
Total revenue 559.9 421.0
Disaggregation of revenues
In the following table revenue from contract with customers is disaggregated by major geographical market based on customer address:
Year ended 31 March
2022
£m
2021*
£m
Revenue by geographical regions
Europe (excluding UK) 185.7 136.3
United Kingdom 124.3 95.8
North America 117.0 89.8
Asia-Pacific 101.3 72.4
Rest of the world 31.6 26.7
Total revenue 559.9 421.0
* Comparative figures for the North America and Asia-Pacific regions have been represented, as in the 2021 Annual Report and Accounts, a portion
of revenue (£16.8m) for North America was presented as Asia-Pacific revenues and vice versa. This did not impact the total revenue or the split for any
other geographical regions.
No individual customer contributed more than 10% to the total revenue in 2022 and 2021.
Note 7. Cost of sales and administrative expenses
Breakdown of expenses by nature:
Year ended 31 March
2022
£m
2021
£m
Cost of sales
Bank and partner fees 146.4 117.8
Net foreign exchange loss and other product costs 39.4 33.9
Total cost of sales 185.8 151.7
Net credit losses on financial assets
Amounts charged to credit losses on financial assets 2.2 8.8
Total net credit losses 2.2 8.8
Expected credit losses are presented as net credit losses within gross profit and subsequent recoveries of amounts previously written
off are credited against the same line item. Subsequent recoveries of amounts previously written off are negligible in both current
and prior year.
Year ended 31 March
2022
£m
2021
£m
Administrative expenses
Employee benefit expenses 184.8 141.6
Marketing 28.2 21.7
Technology and development 25.0 19.9
Consultancy and outsourced services 42.3 27.3
Other administrative expenses 22.9 4.8
Depreciation and amortisation 22.9 21.7
Less: Capitalisation of staff costs (4.7) (19.5)
Total administrative expenses 321.4 217.5
Refer to note 8 for details on employee benefit expenses.
Wise Annual Report and Accounts 2022 141
Note 7. Cost of sales and administrative expenses continued
Administrative expenses include £7.6m of exceptional items (2021: £4.0m) in relation to the one-off costs associated with the Group’s
direct listing on the London Stock Exchange on 7 July 2021. These exceptional items were reported as follows: £4.9m in Consultancy
and outsourced services (2021: £3.9m), £0.2m in Marketing (2021: £0.1m) and £2.5m in Other administrative expenses (2021: nil). FY2022
exceptional items are net of £3.9m contribution received from the shareholders at the time of the listing (2021: nil).
These costs were treated as non-tax deductible in FY2022 and the corresponding impact in tax has resulted in an increase in expenses
not deductible for tax purposes, as per note 9.
The cash flow in the year, associated with exceptional items, was £10.3m (FY2021: £1.3m).
During the year, the Group (including its overseas subsidiaries) obtained the following services from the
Company’s auditors:
Year ended 31 March
2022
£m
2021
£m
Audit fees
Fees payable to the Company’s auditors and its associates for the audit of Company and
consolidated financial statements 1.7 0.9
Audit of the financial statements of the Company’s subsidiaries 0.8 0.2
Total audit fees 2.5 1.1
Non-audit fees
Other services* 0.5 1.3
Total non-audit fees 0.5 1.3
* Other services include assurance fees, other regulatory and reporting services associated with the listing.
Note 8. Employee benefit expenses
Year ended 31 March
2022
£m
2021
£m
Salaries and wages 117.6 86.4
Share-based payment compensation expense 42.2 38.1
Social security costs 17.8 14.0
Pension costs 3.6 1.9
Other employment taxes and insurance cost 3.6 1.2
Total employee benefit expense 184.8 141.6
Refer to note 20 for details on share options granted to employees.
The monthly average number of employees during the year ended 31 March 2022 was 2,919 (2021: 2,243 employees). Remuneration of
key management personnel is disclosed in note 23.
Note 9. Tax
Tax expense:
Year ended 31 March
2022
£m
2021
£m
Current income tax for the year
UK corporation tax 15.4 6.2
Foreign corporation tax 6.6 4.9
Adjustment in respect of prior years (0.8) (1.3)
Total current tax expense for the year 21.2 9.8
Deferred income tax for the year
(Increase)/Decrease in deferred tax (10.5) 1.3
Adjustment in respect of prior years 0.3 (0.9)
Total deferred tax (credit)/expense for the year (10.2) 0.4
Total tax expense for the year 11.0 10.2
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022142
Financial Statements
Factors affecting tax expense for the year:
Year ended 31 March
2022
£m
2021
£m
Profit before taxation 43.9 41.1
Profit multiplied by the UK tax rate of 19% (2021: 19%) 8.3 7.8
Adjustments in respect of prior periods (0.5) (2.2)
Effect of expenses not deductible 2.4 0.5
Movement in tax provisions 1.2 2.8
Employee option plan 1.8 0.5
Difference in overseas tax rates 2.2 1.0
Change in rate of recognition of deferred tax (4.4) –
Other adjustments – (0.2)
Total tax expense for the year 11.0 10.2
The Group’s effective tax rate (ETR) before other comprehensive income (OCI) is a 25% charge (2021: 25% charge).
This equates to the applicable UK tax rate of 19%, adjusted for a number of factors such as disallowable listing costs, UK tax rate
change, employee option plans and higher overseas tax rates.
On 24 May 2021, an increase in the UK corporation tax rate from 19% to 25% applicable from 1 April 2023 was substantively enacted.
Therefore, the UK deferred tax assets and liabilities, which are expected to unwind after 1 April 2023, have been re-measured in the
current reporting period based on the increased UK corporation tax rate and reflected in the statement of profit and loss and equity.
Amounts recognised in other comprehensive income:
2022
£m
2021
£m
Deferred tax
Recognition of deferred tax asset on listed bonds 5.4 –
Total amounts recognised in other comprehensive income 5.4 –
Amounts recognised directly in equity:
2022
£m
2021
£m
Current tax
Deduction for exercised options 16.0 3.1
Deferred tax
Recognition of deferred tax asset on share-based payments* 42.7 23.5
Total amounts recognised directly in equity 58.7 26.6
* Recognition of deferred tax on share-based payments consists of future share-based payments deductions and carry forward losses generated by
share-based payments.
The deferred tax asset in relation to share-based payments was recognised based on the share price at the balance sheet date
which was £4.95. Comparative figures have been updated to present more appropriately the equity movements between current tax:
deduction for exercised options and deferred tax: recognition of deferred tax asset on share-based payments for the year ended
31 March 2021.
Wise Annual Report and Accounts 2022 143
Note 9. Tax continued
Deferred tax assets and liabilities
Movements during the year
Year ended 31 March 2022
1 April 2021
£m
Recognised
in income
£m
Recognised in
equity/OCI
£m
FX
£m
31 March 2022
£m
Property, plant and equipment 0.2 (0.2) – 0.1 0.1
Share-based payments 54.9 7.1 (12.0) (0.1) 49.9
Intangibles (2.7) 0.5 – – (2.2)
Provisions 1.9 0.8 – – 2.7
Tax losses 2.4 0.5 54.2 0.1 57.2
Other (2.0) 1.5 5.9 – 5.4
Closing deferred tax asset 54.7 10.2 48.1 0.1 113.1
Represented by:
Deferred tax assets 113.6
Deferred tax liabilities (0.5)
Total 113.1
Year ended 31 March 2021
1 April 2020
£m
Recognised
in income
£m
Recognised in
equity/OCI
£m
FX
£m
31 March 2021
£m
Property, plant and equipment (0.2) 0.4 – – 0.2
Share-based payments 28.9 6.1 20.3 (0.3) 55.0
Intangibles (1.3) (1.4) – – (2.7)
Provisions 1.0 0.9 – – 1.9
Tax losses 4.8 (5.6) 3.2 – 2.4
Other (1.2) (0.8) – – (2.0)
Closing deferred tax asset 32.0 (0.4) 23.5 (0.3) 54.7
Represented by:
Deferred tax assets 56.7
Deferred tax liabilities (2.0)
Total 54.7
The deferred tax asset is predominantly generated in the UK and the US and mainly comprises unexercised share options and losses
generated by share-based payment deductions. The current year tax losses have arisen due to post-listing share option exercises.
The deferred tax assets are reviewed at each reporting date to determine recoverability and to determine a reasonable time frame for
utilisation. To determine this, the group has derived their forecasts from the approved group forecast used for the viability statements
and going concern analysis. There is no time limit for utilisation of UK tax losses and the US losses can be carried forward for 20 years.
Therefore, losses in the US generated in the current financial year will only expire at the end of FY2042. In light of this analysis, the
Group considers it is probable that there will be sufficient taxable profits in the next 6 years to realise the deferred tax asset.
Consequently, the Group has unrecognised deductible temporary differences of £nil (2021: £nil) and the asset has been recognised
in full as at 31 March 2022.
Note 10. Earnings per share
The following table reflects the income and share data used in the basic and diluted earnings per share (EPS) calculations:
2022 2021*
Profit for the year (£m) 32.9 30.9
Weighted average number of Ordinary Shares for basic EPS (in millions of shares) 967.2 934.0
Plus the effect of dilution from Share options (in millions of shares) 66.8 83.6
Weighted average number of Ordinary Shares adjusted for the effect of dilution (in millions of shares) 1034.0 1,017.6
Basic EPS, in pence 3.40 3.31
Diluted EPS, in pence 3.18 3.04
* For comparability and consistent presentation, the weighted average number of Ordinary Shares and share options for 2021 were determined on the
same basis as the 2022 figures, i.e. as if all shares (common and preference) were redesignated into a single class of A Ordinary Shares, then each Class A
shares split into 26 Class A Shares. Refer to note 18 for further details.
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022144
Financial Statements
Note 11. Property, plant and equipment
Right-of-use
assets
£m
Leased office
improvements
£m
Office
equipment
£m
Assets under
construction
£m
Total
£m
At 31 March 2020
Cost 17.5 6.5 4.6 0.1 28.7
Accumulated depreciation (4.0) (3.4) (2.2) – (9.6)
Net book value 13.5 3.1 2.4 0.1 19.1
Additions 10.2 1.7 0.5 0.4 12.8
Reclassifications – – 0.1 (0.1) –
Depreciation charge (4.4) (1.8) (0.8) – (7.0)
Foreign currency translation differences (0.6) (0.1) (0.2) – (0.9)
As at 31 March 2021
Cost 26.4 7.5 4.0 0.4 38.3
Accumulated depreciation (7.7) (4.6) (2.0) – (14.3)
Net book value 18.7 2.9 2.0 0.4 24.0
Additions 2.8 4.1 1.5 0.2 8.6
Reclassifications – 0.4 – (0.4) –
Depreciation charge (4.9) (1.7) (1.1) – (7.7)
Write-offs (2.4) – – – (2.4)
Foreign currency translation differences – – 0.1 – 0.1
At 31 March 2022
Cost 25.8 10.5 4.9 0.2 41.4
Accumulated depreciation (11.6) (4.8) (2.4) – (18.8)
Net book value 14.2 5.7 2.5 0.2 22.6
Refer to note 17 for disclosure of security.
Wise Annual Report and Accounts 2022 145
Note 12. Intangible assets
Software
£m
Other
intangible
assets
£m
Total
£m
At 31 March 2020
Cost 45.6 – 45.6
Accumulated amortisation (24.3) – (24.3)
Net book value 21.3 – 21.3
Additions 19.3 1.6 20.9
Amortisation charge (14.5) (0.2) (14.7)
As at 31 March 2021
Cost 45.8 1.6 47.4
Accumulated amortisation (19.7) (0.2) (19.9)
Net book value 26.1 1.4 27.5
Additions 4.7 3.3 8.0
Amortisation charge (14.8) (0.4) (15.2)
Currency translation differences – 0.1 0.1
At 31 March 2022
Cost 39.0 4.9 43.9
Accumulated amortisation (23.0) (0.6) (23.6)
Net book value 16.0 4.3 20.3
Software is an internally generated intangible asset which consists of capitalised development costs. Other intangible assets primarily
include licences and domain purchases.
The Group’s total product engineering costs for the year ended 31 March 2022 are £64.5m (2021: £49.8m), including £4.7m that was
capitalised as Software intangible (2021: 19.5m). These costs directly relate to the development of the Group’s product offerings and
primarily comprise employee costs of the engineering and product teams.
Note 13. Trade and other receivables
2022
£m
2021
£m
Non-current trade and other receivables
Office lease deposits 0.7 1.0
Other non-current receivables 13.6 14.1
Total non-current trade and other receivables 14.3 15.1
Current trade and other receivables
Receivables from payment processors 69.5 44.3
Collateral deposits 33.6 26.0
Prepayments 8.3 6.0
Other receivables* 26.2 5.0
Total current trade and other receivables 137.6 81.3
* Net of expected credit loss provision of £19.8m as at 31 March 2022 (2021: £14.2m). The movement in the year is predominantly related to increased
activity and the related increase in customer balances, which resulted in the increase of customers’ balances older than 60 days. Customer chargebacks
increased by £1.5m to £2.9m at 31 March 2022 (31 March 2021: £1.4m) and overdrawn accounts increased by £3.4m to £9.5m (31 March 2021: £6.1m). The
remaining £0.7m is attributable to exchange rate movements in the specific provision booked in FY2021 for the receivables with MS Bank S.A. Banco de
Câmbio. The recognised specific provision amount at the year ended 31 March 2022 is £7.4m (2021: £6.7m).
The carrying values of current trade receivables approximate their fair values because these balances are expected to be cash settled in
the near future unless a provision is made.
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022146
Financial Statements
Note 14. Financial assets at fair value through other comprehensive income
Short-term financial investments are recognised as debt investments at FVOCI and comprise the following investments in listed bonds:
2022
£m
2021
£m
Short-term financial investments – level 1
Listed bonds 1,192.4 737.5
Total short-term financial investments 1,192.4 737.5
During the year, the following losses were recognised in other comprehensive income:
2022
£m
2021
£m
Debt investments at FVOCI
Fair value losses recognised in other comprehensive income (22.6) (3.0)
Recognition of deferred tax asset on listed bonds 5.4 –
Total fair value losses in other comprehensive income (17.2) (3.0)
During the year, the Group sold £147.3m of financial assets at FVOCI before maturity. The net loss of £4.8m on disposal of the listed
bond was transferred from the fair value reserves in equity to the consolidated income statement in other operating expenses.
Note 15. Cash and cash equivalents
2022
£m
2021
£m
Cash and cash equivalents
Cash at bank, in hand and in transit between Group bank accounts 5,618.8 3,018.0
Cash in transit to customers* 154.6 108.6
Investment into money market funds 282.9 232.0
Total cash and cash equivalents 6,056.3 3,358.6
* Cash in transit to customers represents cash that has been paid out from the Group bank accounts but has not been delivered to the bank account of
the beneficiary.
Of the £6,056.3m (2021: £3,358.6m) cash and cash equivalents at the period end, £357.8m (2021: £286.1m) is considered corporate cash
balance, not related to customer funds, which is held on Wise Accounts or collected from customers as part of the money transfer
settlement process. Refer to note 21 for further details.
Customer funds are subject to various regulatory safeguarding compliance requirements. Such requirements may vary across the
different jurisdictions in which the Group operates.
As at 31 March 2022, in addition to other highly liquid assets, such as money market funds and investment grade bonds, the Group held
£4,930.2m (2021: £2,472.9m) of cash at bank in segregated, safeguarded bank accounts to secure customer deposits.
Note 16. Trade and other payables
2022
£m
2021
£m
Non-current trade and other payables
Non-current accruals and provisions 15.7 22.6
Total non-current trade and other payables 15.7 22.6
Current trade and other payables
Outstanding money transmission liabilities* 170.6 141.2
Wise Accounts 6,783.2 3,712.7
Accounts payable 10.4 3.1
Accrued expenses** 26.5 20.5
Deferred revenue 5.6 3.2
Other payables 37.9 7.9
Total current trade and other payables 7,034.2 3,888.6
* Money transmission liabilities represent transfers that have not yet been paid out or delivered to a recipient.
** In the comparative year, within accrued expenses were included £2.6m of other provisions that are now presented separately in the Consolidated
statement of financial position.
Trade and other payables are unsecured unless otherwise indicated; due to the short-term nature of current payables, their carrying
values approximate their fair value.
Wise Annual Report and Accounts 2022 147
Note 17. Borrowings
2022
£m
2021
£m
Current
Lease liabilities 5.5 3.5
Total current borrowings 5.5 3.5
Non-current
Revolving credit facility 78.5 78.6
Lease liabilities 11.7 16.6
Total non-current borrowings 90.2 95.2
Total borrowings 95.7 98.7
Debt movement reconciliation:
Revolving
credit
facility
£m
Lease
liabilities
£m
Total
£m
As at 31 March 2020 49.2 14.6 63.8
Cash flows:
Proceeds 118.6 – 118.6
Repayments (90.0) (3.9) (93.9)
Interest expense paid (2.2) (0.8) (3.0)
Non-cash flows:
New leases 10.2 10.2
Interest expense 3.0 0.8 3.8
Foreign currency translation differences – (0.8) (0.8)
As at 31 March 2021 78.6 20.1 98.7
Cash flows:
Proceeds 43.0 – 43.0
Transaction costs related to revolving credit facility (0.8) – (0.8)
Repayments (43.0) (3.8) (46.8)
Interest expense paid (2.8) (0.9) (3.7)
Non-cash flows:
New leases – 2.8 2.8
Interest expense 3.5 0.9 4.4
Foreign currency translation differences – 0.1 0.1
Other lease movements – (2.0) (2.0)
As at 31 March 2022 78.5 17.2 95.7
The interest expense accrued is recognised within the finance expense in the Consolidated statement of profit and loss.
Revolving credit facility (RCF)
In the year 31 March 2021, the Group entered into a Multi Currency Debt facility for £160.0m with Silicon Valley Bank, Citibank N.A.,
JP Morgan Chase Bank N.A. and National Westminster Bank plc with maturity date in March 2024. In August 2021, the Group exercised
an accordion with Barclays Bank plc, Goldman Sachs Lending Partners LLC and Morgan Stanley Senior Funding Inc to increase the debt
facility by an additional £52m.
The facility bears interest at a rate per annum equal to SONIA plus a margin determined by reference to adjusted leverage (calculated
as a ratio of debt to adjusted EBITDA*). The agreement contains certain customary covenants, including to maintain a maximum total
net leverage ratio not in excess of 3:1 and interest cover (calculated as a ratio of adjusted EBITDA* to finance charges in accordance
with the terms of the agreement) is not less than a ratio of 4:1 in respect of any relevant period.
The undrawn amount of the facility as at 31 March 2022 was £132.0m (2021: £80.0m). During the year ended 31 March 2022, the effective
interest rate on the relevant facility was between 2.8% and 3.7% (2021: 2.8-3.6%).
The facility is secured by certain customary security interests and pledges including over shares in certain Group entities (Wise plc,
Wise Financial Holdings Ltd, Wise Payments Limited, Wise US Inc., Wise Europe SA and Wise Australia Pty Ltd), and fixed and
floating pledges over assets and undertakings of Wise Payments Ltd, excluding customer and partner funds, share capital or equity
contributions maintained for regulatory purposes, cash paid into a bank or collateral account in connection with, and for the benefit of,
relevant card scheme providers and assets held in safeguarded accounts or otherwise segregated for regulatory purposes.
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022148
Financial Statements
Lease liabilities
As at 31 March 2022, the lease liabilities are £17.2m (2021: £20.1m) and relate to the expected terms remaining on UK, US, Estonia,
Hungary and Singapore office space leases discounted at between 2.51% and 5.18%. The leases expire between 2023-2025.
The Group has extension options in a number of leases for office space, which have not been exercised as at 31 March 2022.
The potential future lease payments, should the Group exercise the extension options, would result in an increase in the lease
liability of £3.5m.
The Group has a termination option in an office lease, which has not been exercised as at 31 March 2022. The potential future
lease payments, should the Group exercise the termination option, would result in a decrease in the lease liability of £0.9m.
Note 18. Share capital
As at 31 March 2022 As at 31 March 2021
Wise plc Wise plc Wise Payments Ltd
Class
Nominal
value, £
Number of
shares
Share
capital, £
Nominal
value, £*
Number of
shares*
Share
capital, £*
Nominal
value, £
Number of
shares
Share
capital, £
Class A Shares 0.01 1,024,589,856 10,245,899 – – – – – –
Class B Shares 0.000 000 001 398,889,814 0.40 – – – – – –
Ordinary – – – 0.01 433,918,706 4,339,187 0.000 01 16,689,181 166
Seed preferred – – – 0.01 130,364,000 1,303,640 0.000 01 5,014,000 50
Series A preferred – – – 0.01 176,410,000 1,764,100 0.000 01 6,785,000 68
Series B preferred – – – 0.01 73,553,350 735,534 0.000 01 2,828,975 28
Series C preferred – – – 0.01 65,033,436 650,334 0.000 01 2,501,286 25
Series D preferred – – – 0.01 22,662,848 226,628 0.000 01 871,648 9
Series E preferred – – – 0.01 39,911,482 399,115 0.000 01 1,535,057 15
Total 1,423,479,670 10,245,899 941,853,822 9,418,538 36,225,147 361
* The share capital presented reflects the share capital structure of Wise plc as if it had been the ultimate parent of the Group as of the comparative date.
On 22 June 2021, in relation to the preparation for the direct listing on the London Stock Exchange, Wise Payments Ltd undertook a
share reorganisation in which all shares (ordinary and preference) were redesignated into a single class of A Ordinary Shares. Following
which, each Class A Share was split into 26 Class A Shares. Wise Payments Ltd then undertook a bonus issue of B Ordinary Shares.
On the same day and following the above share reorganisation, Wise Payments Ltd shareholders entered into a share-for-share
exchange agreement with the shareholder of Wise plc, acquiring Wise Payments Ltd’s Class A and Class B Shares with nominal values
of £0.000 01 and £0.000 000 001, in exchange for the issue of Wise plc Class A and Class B Shares with nominal values of £0.01 (i.e.
1,000 times greater than the nominal value of Wise Payments Ltd’s Class A Shares) and £0.000 000 001, respectively. As a result, Wise
plc became the ultimate parent company of the Group, with a 100% indirect investment in Wise Payments Ltd through Wise Financial
Holdings Ltd.
During the financial year 2022 a total of 82,736,034 Ordinary Shares were issued for a total of £0.8m (2021:563,587 Ordinary Shares were
issued for a total of £0.9m, classified as equity merger reserves post reorganisation).
Each Class A shareholder is entitled to one vote for each Class A Share held, subject to any restrictions on total voting rights as set out
in the Company’s Articles of Association. Class A shareholders are entitled to interim or annual dividends to the extent declared and do
not hold any preferential rights to dividends. Class A Shares are non-redeemable.
Each Class B shareholder is entitled to nine votes for each Class B Share held, subject to any restrictions on total voting rights as set out
in the Company’s Articles of Association. Class B Shares carry no rights to distributions of dividends except on distribution of assets, up
to their nominal value, on a liquidation or winding up. Class B Shares are strictly non-transferable, non-tradeable and non-distributable
to any person or entity whatsoever.
Wise Annual Report and Accounts 2022 149
Note 19. Equity merger reserve and Other reserves
Equity merger reserve
The merger reserve arises from the Group pre-listing reorganisation accounted for as capital reorganisation. Upon the reorganisation,
the Group’s Ordinary Shares have been represented as those of Wise plc. The difference between Wise Payments Ltd net assets and
the nominal value of the shares in issue is recorded in the merger reserve.
Other reserves
Other reserves predominantly relate to investments into highly liquid bonds measured at FVOCI. For these investments, changes in fair
value are accumulated within the FVOCI reserve within equity. On disposal of these debt investments, any related balance within the
FVOCI reserve is reclassified to profit or loss. Refer to note 14 for further details.
Note 20. Share-based employee compensation
After the reorganisation of the Group, as described in notes 1 and 18, share options for Wise Payments Ltd Ordinary Shares were
replaced by share options for Wise plc Class A Shares. The same share-split ratio was applied as for the share capital reorganisation
described in note 18.
As the result of the reorganisation, Wise Payments Ltd transferred its share-based payment reserves to retained earnings as the
obligation to settle share-based payment awards would be with Wise plc. This transfer did not impact the consolidated results of
the Group following the reorganisation and will be reflected in the standalone financial statements of Wise plc.
The employee share option plans are designed to provide long-term incentives for all employees to deliver long-term shareholder
returns. Under the plans, participants are granted share options of the Company, which vest gradually over a 4-year period and are
equity settled for shares within Wise plc. The awards are subject to service conditions, i.e. the requirement for recipients of awards
to remain in employment with the Group over the vesting period.
Transactions on the share option plan for employees during the year were as follows:
As at 31 March 2022 As at 31 March 2021
Wise plc Wise plc Wise Payments Ltd
Class
Average
exercise price
per share
option, £
Number of
options
Average
exercise price
per share
option, £*
Number of
options*
Average
exercise price
per share
option, £
Number of
options
Beginning of year 0.11 97,252,168 0.14 106,686,138 3.57 4,103,313
Granted during the year 0.01 8,373,106 0.32 13,282,230 8.32 510,855
Exercised during the year 0.08 42,170,404 0.06 14,653,262 1.54 563,587
Forfeited during the year 0.16 5,149,847 0.84 8,062,938 21.96 310,113
End of year 0.11 58,305,023 0.11 97,252,168 2.86 3,740,468
Vested and exercisable as at end of year 0.15 36,294,247 0.13 63,899,550 3.28 2,457,675
* Following the Group reorganisation, in which each Class A Share was split into 26 Class A Shares, the number of share options for all of the periods prior
to 2022 were determined with the same share-split ratio and the average share exercise price was adjusted accordingly. For further information on the
reorganisation refer to note 1.
The share-based payment compensation expense for the year ended 31 March 2022 is £42.2m (2021: £36.5m) for employees directly
employed by the Group and £0.3m (2021: £0.4m) for outsourced personnel.
During the year £25.2m (2021: £2.8m) of share-based payments were exercised, forfeited or vested and were recycled to retained earnings.
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022150
Financial Statements
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Grant date range
12 months ended 31 March
Expiry date range
12 months ended 31 March
Weighted average
exercise price
Share options as at
31 March 2022
Share options as at
31 March 2021*
2013 2023 0.00014 275,126 3,043,118
2014 2024 0.00014 232,310 3,149,822
2015 2025 0.00271 1,443,678 8,835,606
2016 2026 0.10578 2,031,776 7,660,588
2017 2027 0.17574 3,258,130 7,405,450
2018 2028 0.17981 4,988,593 12,387,830
2019 2029 0.12845 11,429,400 18,760,586
2020 2030 0.15303 15,262,193 19,932,172
2021 2031 0.10972 8,810,346 16,076,996
2022 2032 0.00012 10,573,471 –
Total 58,305,023 97,252,168
Weighted average
remaining contractual life
of options outstanding at
end of year 7.2 years 6.9 years
* For comparability and consistent presentation, the weighted average exercise price and the number of share options for all of the periods prior to 2022,
were determined on the same basis as the 2022 figures; i.e. as if all share options split into 26, in accordance with the share-split ratio of Class A Shares
during the Group reorganisation. Refer to note 1 for further details.
Valuation of share awards
The assessed fair value at the grant date of share options granted during the year ended 31 March 2022 was £9.51 per option on average
(2021: £3.52). The fair value of the share options granted after the listing is calculated using the closing share price at the grant date. The
fair value of the share options granted prior to the listing was independently determined using the Black Scholes Model that takes into
account the exercise price, the term of the share option, the share price at grant date and expected price volatility of the underlying
share, the risk-free interest rate for the term of the share option and the correlations and volatilities of the peer group companies.
For the year ended 31 March 2022 a total of 1,526,247 options were granted prior to listing and 6,846,859 options were granted post listing.
The Black-Scholes model inputs included:
• Options are granted for no consideration and vest over the 4-year period according to the vesting conditions;
• Average exercise price: £0.01;
• No dividends are expected to be paid;
• Expected price volatility of the Company’s shares: 48%
• Risk-free interest rate: 1.44%
• Expected price volatility is based on the comparative information of the peer-group companies.
Risk-free interest rate is based on the UK 5-year government bond yield.
Share trust
The Group consolidates one share trust. The Group’s own share reserve represents the weighted average cost of shares in the Wise
Group Employee Benefit Trust (Ocorian) which are held for the purposes of fulfilling obligations in respect of the Group’s share awards.
Wise Annual Report and Accounts 2022 151
Note 21. Cash generated from operating activities
Note
2022
£m
2021
£m
Cash generated from operations
Profit for the year 32.9 30.9
Adjustments for:
Depreciation and amortisation 7, 11, 12 22.9 21.7
Non-cash share-based payments expense 42.2 38.5
Foreign currency exchange differences 18.3 17.1
Current tax expense 9 11.0 10.2
Effect of other non-monetary transactions 10.6 5.7
Changes in operating assets and liabilities:
(Increase)/decrease in prepayments and receivables (16.7) 6.1
Increase in trade and other payables 16.8 30.0
(Increase)/decrease in receivables from customers and payment processors (34.0) 3.2
Increase in liabilities to customers, payment processors and deferred revenue 46.2 31.3
Increase in Wise Accounts 2,983.9 1,881.6
Cash generated from operations 3,134.1 2,076.3
The table below show a non-IFRS view of the ‘Corporate cash’ metric that is used by the Group management as a Key Performance
Indicator in assessment of the Group’s ability to generate cash and maintain liquidity. Corporate cash represents cash and cash
equivalents that are not considered customer related balances.
Information presented in the table below is based on the Group’s internal reporting principles and might differ from the similar
information provided in IFRS disclosures:
Note
2022
£m
2021
£m
Breakdown of corporate and customer cash
Cash and cash equivalents and short-term financial investments 14, 15 7,248.7 4,096.1
Receivables from customers and payment processors 85.2 47.3
Adjustments for:
Outstanding money transmission liabilities and other customer payables (192.9) (144.6)
Wise Accounts 16 (6,783.2) (3,712.7)
Corporate cash at end of the year 357.8 286.1
Corporate cash includes the ‘Receivables from payments processors’ as disclosed in note 13, as well as receivables from customers and
partners. Those balances are reported under ‘Other receivables’ in note 13, but exclude those elements which are considered customer
related balances.
Similarly, corporate cash includes the ‘Outstanding money transmission liabilities’ and the payables reported under ‘Deferred revenue’
and ‘Other payables’ in note 16, which are not considered customer related balances.
Notes to the Group consolidated financial statements continued
Wise Annual Report and Accounts 2022152
Financial Statements
Note 22. Commitments and contingencies
The Group’s minimum future payments from non-cancellable agreements as at year end are detailed below:
2022
£m
2021
£m
Infrastructure subscriptions
No later than 1 year 1.4 2.5
Later than 1 year and no later than 5 years 0.7 2.0
Total 2.1 4.5
Significant capital expenditure contracted
No later than 1 year – 2.1
Total – 2.1
The Group does not have any other material commitments, capital commitments or contingencies as at 31 March 2022 and 31 March 2021.
Note 23. Transactions with related parties
Related parties of the Group and Wise plc include subsidiaries, key management personnel (“KMP”), close family members of KMP and
entities that are controlled or jointly controlled by KMP or their close family members. Wise identifies the Board of Directors as KMP.
Balances and transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note.
Details of the Directors remuneration and interest in shares are disclosed in the Remuneration Report. Additional information for key
management compensation and particulars of transactions with related parties are tabulated below, in accordance with IAS 24 Related
party disclosures requirements.
2022
£m
2021
£m
Compensation of KMP of the Group
Short-term employee benefits 0.5 0.5
Share-based payment expense 3.1 1.7
Total compensation paid to key management personnel 3.6 2.2
Short-term employee benefits include salaries for the KMP.
Share-based payment expense is related to employee share option plan (more information about the plan is provided in note 20).
2022
£m
2021
£m
Transactions and balances with KMP of the Group
Balances in Wise accounts 1.8 0.3
Other transactions 0.7 –
Total transactions and balances with KMP of the Group 2.5 0.3
Other transactions referred to contributions received from related parties at the time of the listing.
No other material transactions with related parties of the Group incurred during the financial years ended 31 March 2022 and 31 March 2021.
Note 24. Post balance sheet events
No post balance sheet events have occurred since 31 March 2022.
Wise Annual Report and Accounts 2022 153
Company statement of financial position
As at 31 March 2022
Note
2022
£m
Non-current assets
Investments in subsidiary 3 119.3
Trade and other receivables 0.1
Total non-current assets 119.4
Current assets
Deferred tax assets 0.3
Amounts due from Group companies 4 2.2
Cash and cash equivalents 11.1
Trade and other receivables 1.4
Total current assets 15.0
Total assets 134.4
Non-current liabilities
Trade and other payables 0.1
Total non-current liabilities 0.1
Current liabilities
Amounts due to Group companies 4 7.5
Current tax liabilities 1.4
Trade and other payables 1.3
Total current liabilities 10.2
Total liabilities 10.3
Net assets 124.1
Equity
Share capital 5 10.2
Share-based payment reserves 86.7
Own shares reserve (0.4)
Other reserves 0.1
Retained earnings 27.5
Total equity 124.1
The loss for the financial period to 31 March 2022 is £0.2m inclusive of £0.8m of dividend income.
Company registered number: 13211214
The accompanying notes form an integral part of the Parent Company financial statements.
The financial statements on pages 129 to 153 were authorised for issue by the Board of Directors on 28 June 2022 and were signed on
its behalf by:
Kristo Käärmann
Co-founder and CEO
28 June 2022
Company statement of financial position
Wise Annual Report and Accounts 2022154
Financial Statements
Company statement of changes in equity
For the period from 18 February 2021 to 31 March 2022
Note
Share capital
£m
Share-based
payment
reserves
£m
Own shares
reserve
£m
Other
reserves
£m
Retained
earnings
£m
Total equity
£m
As at 18 February 2021 – – – – – –
Group reorganisation
Issue of share capital 5 9.9 – (0.5) – – 9.4
Employee share schemes – 79.1 – – – 79.1
Loss for the year – – – – (0.2) (0.2)
Share-based compensation expense – 31.6 – – 0.8 32.4
Issue of share capital 0.3 – (0.3) – – –
Employee share schemes – (24.0) 0.4 – 27.0 3.4
Redemption of preference shares – – – 0.1 (0.1) –
At 31 March 2022 10.2 86.7 (0.4) 0.1 27.5 124.1
The accompanying notes form an integral part of the Parent Company financial statements.
Company statement of changes in equity
Wise Annual Report and Accounts 2022 155
Notes to the Company financial statements
For the period from 18 February 2021 to 31 March 2022
Note 1. Accounting policies for the Company financial statements
General information
The Company is a public limited company, limited by shares, and has been incorporated in England. The Company primarily operates
as a holding company for the Group’s investments.
Basis of preparation
The financial statements have been prepared in accordance with United Kingdom Accounting Standards, including Financial Reporting
Standard 102 ‘The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland’ (‘FRS 102’) and the
Companies Act 2006. As permitted by section 408 of the Companies Act 2006, the Company’s income statement and related
notes have not been presented in these financial statements. The loss for the financial period ended 31 March 2022 was £0.2m.
In preparing these financial statements, the Company has taken advantage of certain exemptions permitted by FRS 102, as the
equivalent disclosures are made in the Group’s consolidated financial statements.
Exemptions have been applied in respect of the following disclosures:
• The cash flow statement and related notes
• The effects of new IFRSs
• Standards not yet effective
• Share-based payments
• Capital management disclosures
• Certain related-party transactions including the remuneration of key management personnel
• Financial instrument disclosures
• A reconciliation of shares outstanding at the beginning and end of the period
The financial statements have been prepared on the historical cost convention, except for financial instruments that are measured
at fair value at the end of the reporting period, and on a going concern basis.
The preparation of the financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates.
It also requires management to exercise judgement in applying the Company’s accounting policies.
The principal accounting policies adopted by the Company are set out below.
Significant accounting policies
The following principal accounting policies have been applied in the preparation of these financial statements. These policies have
been consistently applied to all the years presented, unless otherwise stated.
Investments in subsidiaries
Investments in subsidiaries are stated at cost, less any provisions to reflect impairment in value.
Impairment of investments in subsidiaries
The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value
of an investment may not be recoverable.
If any such indication of impairment exists, the Company makes an estimate of the recoverable amount. If the recoverable amount
of the cash-generating unit is less than the value of the investment, the investment is considered to be impaired and is written down
to its recoverable amount. An impairment loss is recognised immediately in the profit and loss account.
Taxation
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly
in equity or other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the
period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of
previous periods.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the
temporary difference can be utilised.
Notes to the Company financial statements
Wise Annual Report and Accounts 2022156
Financial Statements
Share-based payments
The Group operates an equity settled share-based compensation plan for the employees of subsidiary undertakings using the
Company’s equity instruments. The fair value of the compensation given in respect of this share-based compensation plan is
recognised as a capital contribution to the Company’s subsidiary undertakings over the vesting period. The capital contribution
is reduced by any payments received from subsidiary undertakings in respect of these share-based payments.
This plan was previously operated by the former ultimate parent of the Wise Group, Wise Payments Ltd. On 22 June 2021, as part of
the pre-listing reorganisation of the Wise Group, the obligation to settle the share-based payment awards was transferred from Wise
Payments Ltd to the Company. Under FRS 102 Section 26 Share-based payments, at the date of the transfer of the obligation to the
Company the charge of £79.1m, which was based on the value of the share-based payment awards in Wise Payments Ltd, was treated
as a cost of investment in Wise Payments Ltd, with a corresponding increase in the Company’s share-based payment reserves.
Key sources of estimation uncertainty
The preparation of the financial statements in conformity with FRS 102 requires that management make certain estimates and assumptions
that affect the reported revenues, expenses, assets and liabilities and the disclosure of contingent liabilities. If in the future such estimates
and assumptions, which are based on management’s best estimates at the date of the financial statements, deviate from actual
circumstances, the original estimate and assumptions will be updated as appropriate in the period in which the circumstances change.
Management has concluded that there are no critical accounting areas of judgement and estimation.
Note 2. Dividend income
Dividends received from subsidiary undertakings are recognised in the parent’s income statement. The Company received £0.8m
of dividend income from subsidiary undertakings during the financial period to 31 March 2022.
Note 3. Investment in subsidiaries at cost
The Company holds a direct investment in Wise Financial Holdings Ltd. In addition, during the period to 31 March 2022, the Company
recognised a capital contribution of £30.7m representing the service costs for the employees of its subsidiaries, under the Company’s
share option schemes.
A full breakdown of the Company’s direct and indirect subsidiary undertakings is provided in note 6.
The movement in the subsidiary undertakings during the financial period to 31 March 2022 is provided below:
31 March
2022
£m
Beginning of the period –
Additions 18.9
Disposals (9.4)
Transfer of the obligation to settle share-based payment awards 79.1
Capital contributions regarding employee services in subsidiaries 30.7
End of the period 119.3
On 22 June 2021, Wise Payments Ltd distributed its entire issued share capital of Wise Financial Holdings Ltd to the Company and
the Company contributed its shares in Wise Payments Ltd to Wise Financial Holdings Limited in exchange for an issue of new shares
in Wise Financial Holdings, resulting in Wise Financial Holdings Limited becoming a holding company of Wise Payments Ltd below
the Company.
As a result of the reorganisation of the Wise Group, the obligation to settle the share-based payment awards was transferred from
Wise Payments Ltd to the Company. Accordingly, the share-based payment charge has been treated as a cost of investment in the
subsidiary of the Company.
Wise Annual Report and Accounts 2022 157
Note 4. Amounts with Group undertakings
Current amounts due from Group undertakings are mainly comprised from management services provided from the Company to
subsidiaries. Current amounts due to Group undertakings are related to pass through of employee share options sales to the respective
employing entity.
From
18 February
2021 to
31 March 2022
£m
Amounts due from Group undertakings
Wise Payments Ltd 2.1
Wise Investments Holdings 0.1
Total 2.2
Amounts due to Group undertakings
Wise Payments Ltd 7.5
Total 7.5
Amounts due from Group companies are repayable in cash and short term in nature.
Note 5. Called up share capital
As at 31 March 2022
Wise plc
Class
Nominal
value, £
Number
of shares
Share
capital, £
Class A Shares 0.01 1,024,589,856 10,245,899
Class B Shares 0.000 000 001 398,889,814 0.40
Ordinary – – –
Total allotted and paid called up share capital 1,423,479,670 10,245,899
The Class A Shares of the Company were admitted to trading on the London Stock Exchange on 7 July 2021. In relation to the listing of
the Company on the London Stock Exchange on 7 July 2021, the following steps were completed on 22 June 2021:
• the existing preferred and Ordinary Shares in Wise Payments Ltd were re-designated as A Ordinary Shares and a share split
was undertaken;
• the existing shareholders of Wise Payments Ltd were offered the opportunity to elect to receive the B Shares, in addition to their A
Shares, to create a dual-class share structure comprising A Shares and B Shares. Such B Shares were issued by way of bonus issue to
such electing, existing shareholders;
• the existing shareholders in Wise Payments Ltd entered into the share for share exchange with Wise plc, pursuant to which Wise plc
acquired the entire issued share capital of Wise Payments Ltd in exchange for the issue of matching Class A Shares, Class B Shares
and a non-voting redeemable preference share in Wise plc to the existing shareholders (and any unexercised options and unvested
awards respectively over shares in Wise Payments Ltd were exchanged for options over Class A Shares in Wise plc).
As a result of the restructure, Wise Payments Ltd transferred its share-based payment obligations to Wise plc, who will be responsible
for the settlement of the share-based payment awards.
Each Class A shareholder is entitled to one vote for each Class A share held, subject to any restrictions on total voting rights as set out
in the Company’s Articles of Association. Class A shareholders are entitled to interim or annual dividends to the extent declared and do
not hold any preferential rights to dividends. Class A shares are non-redeemable.
Each Class B shareholder is entitled to nine votes for each Class B share held, subject to any restrictions on total voting rights as set out
in the Company’s Articles of Association. Class B shares carry no rights to distributions of dividends except on distribution of assets, up
to their nominal value, on a liquidation or winding up. Class B shares are strictly non-transferable, non-tradable and non-distributable to
any person or entity whatsoever.
Notes to the Company financial statements continued
Wise Annual Report and Accounts 2022158
Financial Statements
Name
Nature of
business
Effective
holding %
of Ordinary
Shares Country Registered address
Wise Financial
Holdings*
Holding
company
100% UK 6
th
Floor, Tea
Building, 56
Shoreditch High
Street, London,
England, E1 6JJ
Wise Payments
Limited
Online currency
exchange
service
100% UK 6
th
Floor, Tea
Building, 56
Shoreditch High
Street, London,
England, E1 6JJ
Wise
Investments
Holdings
Holding
company
100% UK 6
th
Floor, Tea
Building, 56
Shoreditch High
Street, London,
England, E1 6JJ
TINV Ltd Investment
activities
100% UK 6
th
Floor, Tea
Building, 56
Shoreditch High
Street, London,
England, E1 6JJ
TINV Nominees
Ltd
Investment
activities
100% UK 6
th
Floor, Tea
Building, 56
Shoreditch High
Street, London,
England, E1 6JJ
TINV Europe AS Investment
activities
100% Estonia Veerenni tn 24,
Tallinn city, Harju
County, 10135,
Estonia
Wise Europe SA Online currency
exchange
service
100% Belgium Avenue Louise 54,
room S52, 1050
Brussels, Belgium
Wise Switzerland
AG
Dormant 100% Switzerland Oberneuhofstrasse 6,
6340 Baar,
Switzerland
Wise ILS Ltd Dormant 100% Israel 7 Ribal, Tel Aviv –
Jaffa, 6777840 Israel
Wise Nuqud Ltd Online currency
exchange
service
100% United Arab
Emirates
5-141, level 15, Al
Khatem Tower, Adgm
Square, Al Maryah
Island, Abu Dhabi,
United Arab Emirates
Wise Payments
Canada Inc
Online currency
exchange
service
100% Canada 99 Bank Street, Suite
1420, Ottawa, ONK1P
1H4, Canada
Wise US Inc Online currency
exchange
service
100%
USA 108 West 13
th
Street,
Wilmington, New
Castle Delaware
Wise Brasil
Corretora de
Cambio Ltda
Online currency
exchange
service
100% Brazil Avenida Paulista,
2537, Bela Vista, São
Paulo, 01311-100,
Brasil
TransferWise
Brasil
Correspondence
Cambial e
Pagamentos Ltd
Dormant 100% Brazil Avenida Paulista,
2537, Bela Vista, São
Paulo, 01311-100,
Brasil
Wise Brasil
Pagamentos Ltda
Online currency
exchange
service
100% Brazil Avenida Paulista,
2537, Bela Vista, São
Paulo, 01311-100,
Brasil
Wise Chile SpA Dormant 100% Chile Los Militares 5001,
oficina 1101, Las
Condes
Wise Pagos
Mexico, S.A. de
C.V.
Dormant 100% Mexico Montecito 38, piso 37
oficina 30, Colonia
Narvarte, WTC
Mexico, Ciudad de
México, C.P. 03810
Name
Nature of
business
Effective
holding %
of Ordinary
Shares Country Registered address
Wise Australia Pty
Ltd
Online
currency
exchange
service
100% Australia Level 15, 390 St Kilda
Road, Melbourne, VIC
3004
Wise China Ltd Online
currency
exchange
service
100% China Room 150, 4
th
Floor,
Fuhui Building C, No. 26
Qixia Road, Pudong New
Area, Shanghai, China,
200120
Wise Payments
Hong Kong Ltd
Online
currency
exchange
service
100% Hong Kong 46/F, Lee Garden One,
33 Hysan Avenue,
Causeway Bay, Hong
Kong
Wise Payments
India Private Ltd
Dormant 100% India Level 7, B wing, The
Capital, G-Block Bandra
Kurla Complex, Bandra
(East) Mumbai, Mumbai
City MH 400051 India
PT Wise Payments
Indonesia
Online
currency
exchange
service
100% Indonesia GOWORK, PLAZA
INDONESIA MALL, LT. 5,
JL. M.H. THAMRIN KAV.
28-30, Kel. Gondangdia,
Kec. Menteng, Kota
Adm. Jakarta Pusat,
Prov. DKI Jakarta
Wise Payments
Japan K.K.
Online
currency
exchange
service
100% Japan 1-6-1, Otemachi,
Chiyoda-ku, Tokyo,
Japan 100-0004
Wise Payments
Malaysia Sdn. Bhd.
Online
currency
exchange
service
100% Malaysia Level 19-1, Menara
Milenium, Jalan
Damanlela, Pusat Bandar
Damansara, 50490 Kuala
Lumpur, Malaysia
Wise Pilipinas Inc. Dormant 100% Philippines Wework 30
th
Floor
Yuchengco Tower,
RCBC Plaza, 6819 Ayala
Ave., Bel-Air, Makati City
1226, Philippines
Wise Asia-Pacific
Pte Ltd
Online
currency
exchange
service
100% Singapore 1 Paya Lebar Link #13-06
– #13-08, PLQ 2, Paya
Lebar Quarter,
Singapore 408533
Wise Payments
Korea Ltd
Dormant 100% South Korea 83 Uisadang-daero,
Yeongdeungpo-gu,
Seoul, 07325, South
Korea
Wise Payments
(Thailand) Ltd
Dormant 100% Thailand 999/9, The Offices at
Central World, Common
ground zone, G Floor,
Unit C08, Rama I Road,
Pathumwan Sub-district,
Pathumwan District,
Bangkok
Vaho Forex Private
Ltd
Dormant 100% India 4/55 Wea Saraswati
Marg, Karol Bagh, Delhi
110005, India
Wise Payments Ltd Branch n/a Hong Kong 46/F, Lee Garden One,
33 Hysan Ave, Causeway
Bay, Hong Kong
Wise Payments
Ltd, Eesti Filiaal
Branch n/a Estonia Veerenni tn 24, Tallinn
city, Harju county, 10135,
Estonia
Wise Payments
Ltd, Magyarorszagi
Fioktelepe
Branch n/a Hungary 1133 Budapest Vaci ut
80, Hungary
Wise Payments Ltd Branch n/a New
Zealand
Level 11, 41 Shortland
Street, Auckland, 1010,
New Zealand
Wise Payments Ltd Branch n/a Netherlands Kingsfordweg 151,
1043GR Amsterdam
TransferWise
Limited, Sucursal
en Espana
Branch n/a Spain Principe de Vergara 112,
4
st
floor, 28002 Madrid,
Spain
* Directly held by the Company
Note 6. Other statutory information
In accordance with section 409 of the Companies Act 2006 a full list of subsidiaries and associates, the country of incorporation and the
effective percentage of equity owned at 31 March 2022 is disclosed below. The branches of the Group outside the UK are also provided
below. Unless otherwise stated the share capital disclosed comprises Ordinary Shares which are indirectly held by Wise plc.
All subsidiary companies are resident for tax purposes in their country of incorporation unless otherwise stated:
Wise Annual Report and Accounts 2022 159
Alternative performance measures
Alternative performance measures
The Group uses a number of alternative performance measures (“APMs”) within its financial reporting. These measures are not defined
under the requirements of IFRS and may not be comparable with the APMs of other companies.
The Group believes these APMs provide stakeholders with additional useful information in providing alternative interpretations of
the underlying performance of the business and how it is managed and are used by the Directors and management for performance
analysis and reporting. These APMs should be viewed as supplemental to, but not a substitute for, measures presented in the financial
statements which are prepared in accordance with IFRS.
Adjusted EBITDA
Measure of profitability which is calculated as profit for the year
excluding the impact of income taxes, finance income and expense,
depreciation and amortisation, share-based payment compensation
expense as well as exceptional items. The Group believes that Adjusted
EBITDA is a useful measure for investors because it is a measure closely
tracked by management to evaluate the Group’s performance and make
financial, strategic and operating decisions and because it may help
investors to understand and evaluate, in the same manner as
management, the underlying trends in the Group’s performance
on a comparable basis, period on period
See definition for
calculation method
Free cash flow (FCF)
Measure of cash flow which further takes into account the net cash flows
from operating activities less the change in working capital (excluding
the change in collateral and other pass-through items), the costs
of purchasing property, plant and equipment, intangible assets
capitalisation and payments for leases. It is a non-statutory measure
used by the Board and the senior management team to measure the
ability of the Group to support future business expansion, distributions
or financing
See definition for
calculation method
Adjusted EBITDA
margin
Adjusted EBITDA as a percentage of total revenue See definition for
calculation method
FCF conversion
Free cash flow as a percentage of Adjusted EBITDA See definition for
calculation method
Exceptional items
Exceptional items are items of income or expense that the Group
considers to be material, one-off in nature and of such significance
that they merit separate presentation in order to aid with understanding
of the Group’s financial performance. Such items include costs
associated with the changes in the Group’s organisational
structure and direct listing
See note 7 for further
information
Corporate Cash
Corporate cash represents cash and cash equivalents that are not
considered customer related balances. Measure of the Group’s ability
to generate cash and maintain liquidity
See note 21 for further
information
Adjusted EBITDA and FCF reconcile to profit for the year as follows:
2022
£m
2021
£m
Profit for the year 32.9 30.9
Adjusted for:
Income tax expense 11.0 10.2
Finance expense 4.8 3.8
Depreciation and amortisation 22.9 21.7
Share-based payment compensation expense 42.2 38.1
Exceptional items 7.6 4.0
Adjusted EBITDA 121.4 108.7
Revenue 559.9 421.0
Adjusted EBITDA* margin 21.7% 25.8%
Corporate cash working capital change excl. collaterals 9.0 23.1
Adjustment for exceptional and pass-through items in the working capital (0.5) –
Payments for lease liabilities (4.7) (4.7)
Capitalised expenditure – Property, plant and equipment (4.6) (2.3)
Capitalised expenditure – Intangible assets (7.3) (20.9)
Free cash flow (FCF) 113.3 103.9
FCF conversion (FCF as a % of Adjusted EBITDA) 93.3% 95.6%
Wise Annual Report and Accounts 2022160
Other information
Corporate cash
The tables below show a non-IFRS view of the “Corporate cash” metric that is used by the Group management as a Key Performance
Indicator in assessment of the Group’s ability to generate cash and maintain liquidity.
2022
£m
2021
£m
Cash flows from operating activities
Profit for the period 32.9 30.9
Adjustments for non-cash transactions 53.4 76.5
Change in corporate working capital 2.2 38.7
Receipt of interest 0.7 0.4
Payment of income tax and interest charges (17.1) (10.1)
Net cash generated from operating activities 72.1 136.4
Net cash used in investing activities (11.6) (23.2)
Net cash (used in)/generated from financing activities (1.3) 24.8
Total increase in corporate cash 59.2 138.0
Corporate cash at beginning of year 286.1 155.1
Effect of exchange rate differences on corporate cash 12.5 (7.0)
Corporate cash at end of the year 357.8 286.1
2022
£m
2021
£m
Breakdown of corporate and customer cash
Cash and cash equivalents and short-term financial investments 7,248.7 4,096.1
Receivables from customers and payment processors 85.2 47.3
Adjustments for:
Outstanding money transmission liabilities and other customer payables (192.9) (144.6)
Wise Accounts (6,783.2) (3,712.7)
Corporate cash at end of the year 357.8 286.1
Wise Annual Report and Accounts 2022 161
Glossary
Glossary
ABC anti-bribery and corruption
Act or Companies Act the UK Companies Act 2006, as amended, modified or re-enacted from time to time
Active customers total number of unique customers who have completed at least one cross currency transaction in a given period
Adjusted EBITDA profit for the year before income taxes, interest, depreciation and amortisation, share-based compensation expense
and exceptional items
Adjusted EBITDA
margin
adjusted EBITDA divided by revenue
Admission the admission of the Class A Shares to the standard listing segment of the Official List of the FCA and to trading
on the London Stock Exchange’s Main Market for listed securities. Date started listing on LSE in July 2021
AGM a general meeting held as the Company’s annual general meeting in accordance with Section 336 of the Act
AML anti-money laundering
Andreessen Horowitz AH Parallel Fund IV, L.P., Andreessen Horowitz LSV Fund I, L.P. and Andreessen Horowitz Fund IV, L.P.
API application programming interface
Articles the current Articles of Association of the Company
Average price price reported to customers in the Wise quarterly mission updates which is based on a fixed basket of
representative currencies to eliminate any route or payment mix effect
Board the board of directors of Wise plc
CAGR compound annual growth rate
CEO or Chief
Executive Officer
the chief executive officer of the Company
CFO or Chief
Financial Officer
the chief financial officer of the Company
Class A Shares the class A Ordinary Shares in the capital of the Company with a nominal value of £0.01 each
Class A Shareholder a registered holder of Class A Shares
Class B Shares the class B Ordinary Shares in the capital of the Company with a nominal value of £0.000000001 pence each
Class B Shareholder a registered holder of Class B Shares
CMA the Competition and Markets Authority
Company Wise plc
Customer Share
Giveaway
the award of shares to approximately 2000 of Wise’s most active customers
COVID-19 Coronavirus disease 2019
Direct Listing a direct listing on the London Stock Exchange’s Main Market
Directors the directors of the Company
Disclosure Guidance
and Transparency Rules
the disclosure guidance and transparency rules of the FCA in relation to the disclosure of information by an issuer
whose financial instruments are admitted to trading on a regulated market in the UK
Dual-Class Share
Structure
the Company’s share capital structure at Admission consisting of two classes of shares, namely Class A Shares and
Class B Shares
Eligible Class B
Shareholder
all Existing Shareholders prior to Admission (including employee holders of vested share options who choose to
exercise prior to Admission)
Eligible Customer a customer eligible to participate in the OwnWise programme in accordance with the criteria set out in “The Direct
Listing, Dual Class Share Structure and OwnWise—OwnWise—Who’s eligible?”
Emission Zero sustainability pillar, Wise’s response to the climate crisis
Employee Share Trust TransferWise Employee Share Trust established on 11 June 2021 between TWL and Equiniti Trust (Jersey) Limited
Wise Annual Report and Accounts 2022162
Other information
Executive Chair David Wells
Executive Directors the executive Directors of the Company
Executive Founder Kristo Käärmann
FCA the Financial Conduct Authority
FRC the Financial Reporting Council
FTSE Financial Times Stock Exchange
UK Corporate
Governance Code 2018
the UK Corporate Governance Code published by the Financial Reporting Council, as amended from time to time
Group reorganisation the reorganisation of the Group’s corporate structure as described in the Share Capital Structure of the Directors
report pursuant to which, among other things, the Company became the ultimate holding company of the Group
IFRS International Financial Reporting Standards
KYC know your customer
Listing Rules FCA Handbook Listing Rules
Long-term
Incentive Plan
the discretionary share plan called the Wise Long-term Incentive Plan
LTIP Awards the long-term incentive plan awards
LTIP Option an option to acquire Class A Shares at an exercise price set at grant (which may be nil)
Main Market the main market for listed securities of the London Stock Exchange
Mission Day/Mission
Update
Programme of quarterly comms to customers and half-year conferences with employees
Mission Zero Wise’s customer pricing initiative
Non-Executive
Directors
the non-executive Directors of the Company
OwnWise our customer shareholder programme designed to reward customers of Wise who also become long-term
shareholders with bonus shares in Wise and other perks
OwnWise Bonus Shares Class A Shares to be issued in connection with OwnWise to participating Eligible Customers who buy Class A
Shares during the relevant OwnWise Eligibility Period and continue to hold these for 12 months following the close
of the relevant OwnWise Eligibility Period
Prospectus The Wise Prospectus prepared for the purpose of Admission
PwC PriceWaterhouseCoopers LLP
Registrar means the Company’s registrar, Equiniti Limited
Regulatory
Information Service
one of the regulatory information services authorised by the FCA to receive, process and disseminate regulatory
information from listed companies
Remuneration
Committee
the Company’s remuneration committee
RSUs restricted share units granted under the 2021 EIP
Senior Leadership
Team (SLT)
as shown in the “Our leaders at Wise.” section on Wise website https://wise.com/owners
Senior Managers
Certification Regime
an FCA accountability framework focused on senior management responsibilities and conduct. More information
is found on https://www.fca.org.uk/firms/senior-managers-certification-regime
Wise Annual Report and Accounts 2022 163
Glossary continued
Shares the shares in the capital of the Company from time to time, which from Admission shall consist of the Class A Shares
and the Class B Shares, each having
sterling or pounds
sterling or pounds
or GBP or £ or pence
the lawful currency of the United Kingdom
Total take rate or
take rate
total fees across all customer activity (conversion and other) as a proportion of volume
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland
United States or U.S.
or USA
the United States of America, its territories and possessions, any State of the United States of America, and the
District of Columbia
US dollar or USD or $ the lawful currency of the United States of America
VPC or volume per
customer
the average volume per each active customer, calculated as total volume divided by total active customers
in the period
“Wise” or “we” or “our”
or “Group”
Wise plc and its subsidiary undertakings
Wise Account the Wise international account for personal customers
Wise accounts together, the Wise international accounts for personal (Wise Account) and business (Wise Business)
Wise Business the Wise international account for business customers
Wise Card Plastic card issued to Wise Account holders
Wise Europe TransferWise Europe SA/NV
Wise Platform the Wise product for bank and enterprise partners
Wise Transfer Wise’s product for sending money
Wisers Wise employees
Wise Annual Report and Accounts 2022164
Other information
Company information
Directors
David Wells
Independent Non-Executive Chair
(Former CFO, Netflix)
Kristo Käärmann
Co-founder and CEO
Matthew Briers
CFO
Alastair Rampell
Non-Executive Director
(Partner, Andreessen Horowitz)
Clare Gilmartin
Independent Non-Executive Director
(Former CEO, Trainline)
Hooi Ling Tan
Independent Non-Executive Chair
(Co-founder, Grab)
Ingo Uytdehaage
Independent Non-Executive Chair
(CFO, Adyen)
Terri Duhon
Independent Non-Executive Chair,
(NED and Risk Chair, Morgan Stanley International)
Shareholder Information
Investor Relations
wise.com/owners/
Wise’s Class A common shares trade on the London Stock
Exchange under the ticker WISE; written as LSE:WISE or
LON:WISE. ISIN is GB00BL9YR756
American Depositary Receipts (ADRs) are available in the US
under the ticker WIZEY
Registrar
Equiniti
Broadgate Tower
6, Broadgate Tower,
20 Primrose Street
London EC2A 2EW
020 3890 2163
Independent Auditors
PricewaterhouseCoopers LLP Chartered Accountants
1 Embankment Place,
London,
WC2N 6RH
Annual General Meeting
Wise’s Annual General Meeting will be held on
September 23 2022 at 11:00 BST
Company Secretary
Jane Fahey
Registered Company Number
Registered in England and Wales
Company number 13211214
Registered Office
Wise plc
6
th
floor, Tea Building 56 Shoreditch High Street
London E1 6JJ
020 7964 0500
FORWARD LOOKING DISCLOSURE DISCLAIMER
This Annual Report may include forward-looking statements, which are based on current expectations and projections about future
events. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target”,
“believe”, “expect”, “aim”, “intend”, “may”, “anticipate”, “estimate”, “plan”, “project”, “will”, “can have”, “likely”, “should”, “would”, “could”
and any other words and terms of similar meaning or the negative thereof. These forward-looking statements are subject to risks,
uncertainties and assumptions about Wise and its subsidiaries. In light of these risks, uncertainties and assumptions, the events in the
forward-looking statements may not occur. Past performance cannot be relied upon as a guide to future performance and should not
be taken as a representation that trends or activities underlying past performance will continue in the future. No representation or
warranty is made or will be made that any forward-looking statement will come to pass. The forward-looking statements in this
report speak only as at the date of this report.
Wise expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statements contained in this
report and disclaims any obligation to update its view of any risks or uncertainties described herein or to publicly announce the results
of any revisions to the forward-looking statements made in this report, whether as a result of new information, future developments or
otherwise, except as required by law.
Wise Annual Report and Accounts 2022
Wise plc
6
th
floor, Tea Building, 56 Shoreditch High Street
London E1 6JJ