The resolution proposed by the “Aiming for A” shareholder coalition at BP’s AGM on 16 April 2015 has been passed with over 98% of votes cast. The resolution requires increased annual reporting relating to climate change risks and makes the link to related KPIs and executive incentives. For more details see Resolution 25 and Appendix … Continue Reading
In our previous blog post, we reviewed the Labour Party’s Manifesto commitments on executive pay. While the Liberal Democrat Manifesto lacks the intrigue of Labour’s commitment to simplify executive pay packages, it is still an interesting read for followers of the ongoing efforts to reel in executive pay. They start with the relatively benign “We will … Continue Reading
Yesterday’s UK Financial Conduct Authority fine of the The Bank of New York Mellon London Branch and The Bank of New York Mellon International Limited (BNYM) for £126 million for failure to comply with FCA custody related rules is a salutary lesson in the importance of both understanding where operational risks lie within the custody … Continue Reading
Tucked away in the Labour Manifesto are some interesting proposals to counter short-termism in the British economy. There are three specific proposals on executive pay: Improving the link between executive pay and performance by simplifying pay packages. Employee representation on remuneration committees. Fund managers to disclose how they vote on top pay. The simplification of pay … Continue Reading
In several posts last year, we charted the development of the new HMRC rules for the online registering, self-certifying and making of annual returns for share plans, and indeed all arrangements under which employees receive shares. Now the dust has settled, the teething troubles have been ironed out and the templates for the new “end-of-year” returns … Continue Reading
A surplus arising in a UK pension plan probably seems less likely than England winning the cricket world cup! However, trustees of UK pension plans need to take action now if they wish to preserve the ability to repay surplus to the plan’s employers if and when such a surplus arises in the future. If … Continue Reading
Sometimes one or two words in a piece of legislation can stir up an entire industry. The catchily named Occupational Pension Schemes (Charges and Governance) Regulations 2015 have done just that with the new definition of “default arrangement”. Under new UK legislation applying from 6 April 2015, money purchase “default arrangements” are required to cap … Continue Reading
Most of us believe that comprehensive tax reform for 2015 is already dead despite Ways and Means Chairman Ryan’s (R-WI) oft-repeated statements to the contrary. But perhaps new life may be breathed into executive compensation reforms. On the heels of a recent Senate Finance Committee hearing dealing with tax fairness, the committee’s ranking Democrat, Sen. … Continue Reading
Are the ever-increasing US public company disclosures, particularly those dealing with executive compensation, even helpful to the investing public? A recent study commissioned by the Stanford University Rock Center for Corporate Governance, RR Donnelley and Equilar suggests the answer may be no, even among sophisticated institutional investors. The 2015 Investor Survey notes that only 38% of … Continue Reading
The Department for Business Innovation and Skills (BIS) has published a research paper on companies’ compliance with the new directors’ remuneration reporting regulations (DRRRs) in the 2014 AGM season. The research was carried out by Manifest, taking a random sample of 93 UK-incorporated companies listed on the London Stock Exchange. Thirty-eight of these companies had … Continue Reading
The past couple of weeks has seen numerous FTSE100 companies publishing their DRRs and executive remuneration has started to hit the headlines again. Shell’s CEO Ben van Beurden was the centre of attention last week with the value of his pension payments and a tax equalisation payment due to his relocation to the UK contributing … Continue Reading
The UK tax treatment of employment related securities depends on a range of factors including the date of grant, the nature of the security and also the residence and domicile status of the employee. For employees coming to the UK who are not UK resident at the time of grant, the tax treatment will depend … Continue Reading
The Prudential Regulation Authority (PRA) has published guidance addressing areas of uncertainty in respect of the remuneration changes under CRD IV. The guidance takes the form of a letter on the PRA’s remuneration code webpage to the chairs of the remuneration committees of PRA-authorised firms. The main controversial element of CRD IV was in respect … Continue Reading
A couple of items relevant to employee shareholder status shares (ESSs) have appeared this week. First, HMRC reported in its latest Employment-Related Securities Bulletin that the Department for Business Innovation and Skills (BIS) has confirmed that already-issued shares – for example, those held by a shareholder or an employee benefit trust – can be used … Continue Reading
Amongst its recently-announced proposed package of banking reforms, the UK Labour party has suggested that claw-back on bankers’ bonuses should be extended to ten years from the date of payment. With effect from 1 January this year, the Bank of England’s Prudential Regulatory Authority imposed a mandatory claw-back period of seven years from the date of … Continue Reading
In the last couple of weeks the first few FTSE100 AGMs have been held. Imperial Tobacco, Aberdeen Asset Management and Compass Group all received votes in favour of more than 90% for their implementation reports. As mentioned in our previous blog post, Aberdeen Asset Management is proving to be the exception by sticking with last … Continue Reading
If executives of a German company are granted equity interests in the company, the tax treatment of payments resulting from such equity interests can prove controversial if the tax authorities launch a tax audit. The payments could either be treated as employment income or as a capital gain. In the first case, the payments will … Continue Reading
From 1 January 2015 new tax regulations apply in Poland covering the use of company cars for private purposes. A lump-sum rule will apply, instead of market valuation. The old rules Employment income includes not only salary, but also fringe benefits the employee gets free or at a discount. These include private medical services, gym … Continue Reading
Institutional Shareholder Services (ISS) recently released its first stand-alone UK and Ireland Proxy Voting Guidelines (previously, ISS and the NAPF issued guidelines through Research Recommendations and Electronic Voting, their joint venture which came to an end in June 2014). The guidelines apply to shareholder meetings held on or after 1 February 2015. In the area of … Continue Reading
Compass Group and Imperial Tobacco published their DRRs last week, giving their shareholders something to read over the festive period. Both companies are putting their policy reports up to a vote again at their AGMs on 5 February and 28 January respectively, due to amending their policies slightly. The notion that most policies will only … Continue Reading
On 18 December, the GC100 and Investor Group published an eagerly awaited update to its Guidance on DRRs. The update follows the GC100’s review of its original Guidance (which was released in September 2013) in light of the 2014 AGM season and recent developments, and notes that the update document should now be regarded as … Continue Reading
The National Association of Pension Funds (NAPF) has re-issued its updated Corporate Governance Policy and Voting Guidelines, including its view of how remuneration should be dealt with. Unsurprisingly, changes have been made to the last set of guidelines issued in November 2013. The changes reflect experience over the first year of accounts published under the … Continue Reading
Last week, the final FTSE100 AGM of the first season under the new UK DRR rules was held – and the first two DRRs to be published as part of the second season were released. And so the cycle begins again… AGM The last FTSE100 AGM of the previous season to be held was that … Continue Reading
BG Group has responded to the numerous reports and opinions that have surrounded its proposed remuneration package to the new CEO, Helge Lund. Less than 24 hours after our blog post which summarised the concerns, BG Group’s announcement, dated 1 December 2014, sets out revisions to the remuneration package and is stated to follow “extensive … Continue Reading
