After weeks of media headlines criticising FTSE 100 executive remuneration, the Investment Association have finally pulled their rabbit from the hat! The nattily entitled “Executive Remuneration Working Group” set up last year under the auspices of the Investment Association (see our previous blog post) has published its Interim Report (which can be downloaded from the … Continue Reading
Until this week, the remuneration side of this year’s FTSE 100 reporting season was looking decidedly pedestrian, with deckchairs being shuffled ahead of the 2017 AGM season, when all of the remuneration policies that were approved at the 2014 AGMs are up for re-approval. The near 60% vote against the approval of BP’s Directors’ Remuneration … Continue Reading
With over a third of the UK FTSE100 having published their DRRs, it looks like the trends identified in our post on 22 March are continuing. A really interesting question to look at, now that nearly half of the FTSE100 companies have published their reports, is whether all the new regulations and guidelines are changing … Continue Reading
Admittedly, it is still early days to asses what’s new in FTSE DRRs for the 2015 accounting period. Even so, it looks like this will be a slow year for developments in DRRs for medium and large listed companies. Of course, that’s probably not surprising. For a company to change its policy requires putting the … Continue Reading
In the last week, it has been reported that Standard Chartered has launched “accountability reviews” to discover whether bonuses can be recovered from any employees found to be responsible for breaches of compliance and risk-management rules. Apparently some bonuses have already been clawed back by the bank and it stated that it would do so … Continue Reading
At the beginning of the 2016 AGM season, there has been a 25.3% vote against Thomas Cook’s directors’ remuneration report. In its announcement, the company said “We have already engaged with certain shareholders to discuss their concerns, which relate to the timing of disclosure of EPS targets in respect of the long-term incentive plan and … Continue Reading
One way or another, we’d expect remuneration committees of UK listed companies to be looking closely at their remuneration policies this year. Is your policy still fit for purpose? Most companies will need to put their remuneration policies to shareholders in 2017 and so discussions about whether the remuneration policy put in place in 2014 … Continue Reading
Institutional Shareholder Services (ISS) has recently published its summary of 2016 policy updates. The executive summary explains both how ISS has undertaken its review of global policies but more importantly summarises the key policy updates that will apply to companies from 1 February 2016. ISS will publish the full (or possibly summary!) additions, revisions and updates to the … Continue Reading
As we previously reported, the guidelines on executive remuneration (formerly known as the ABI guidelines) have now come under the auspices of the Investment Association (“IA”). As usual at this time of year, the guidelines (or principles, as we should now call them) have been dusted down. The only substantive change to the principles is that long-term incentives … Continue Reading
Institutional Shareholder Services Inc (ISS), the US-based international corporate governance provider, has released its draft 2016 benchmark policy changes for consultation. There are only three countries where compensation-related changes are proposed: France: Recent legislative changes in France have reduced to two years the previous requirement for a four-year combined vesting and holding period for performance … Continue Reading
Last year we covered the saga of Sports Direct’s 2015 Share Scheme through the vote to approve the scheme and the subsequent votes at the 2014 AGM. This story has refused to go away and resurfaced this week at the company’s 2015 AGM. There has been much press comment on the outcomes and reasons why … Continue Reading
The Investment Association (IA) has announced that it has set up a working group, the Executive Remuneration Working Group, to address the perceived complexity of executive pay and the lack of incentives for directors of UK companies to act in the best interests of shareholders over the long term (see our previous post). The remit … Continue Reading
The recent clawback laws being discussed and introduced in the UK and the US differ quite markedly and represent two almost entirely different approaches to recovering “erroneously” awarded incentive-based compensation. So which flavour do you prefer? One shouldn’t forget, of course, that the PRA’s provisions regarding clawback are only one half of a two pronged … Continue Reading
The Internal Revenue Service (IRS) is considering two matters that are likely to be of considerable interest to managers of private equity funds, hedge funds and real estate funds – the tax treatment of management fee waivers and whether individuals can be employees and partners of the same partnership entity at the same time for … Continue Reading
The High Pay Centre, well known in the UK for its opposition to the trend for higher executive pay, published its latest report on Wednesday. The catchy title “No Routine Riches” reflects the inevitable conclusions that the current approach to executive pay is misconceived. The main headline-catching recommendation is that companies should drop their LTIPs … Continue Reading
Over 70 FTSE100 companies have now released their DRRs and we are well into the 2015 AGM season. So far, most FTSE100 companies are coming through the AGM season unscathed. In respect of the implementation report (this is the aspect of the directors’ remuneration report that describes how the remuneration committee implemented the company’s approved … Continue Reading
In its most recent action dealing with the controversial topic of executive pay, on Wednesday, April 29, 2015, the Securities and Exchange Commission (SEC) voted 3 – 2 to approve proposed rules regarding pay-for-performance in the wake of the Dodd-Frank Act. The proposed rule is intended to require companies to show, typically in their annual … Continue Reading
In our blog posts last week we reported on the Labour and Liberal Democrat manifesto pledges affecting executive remuneration. The Scottish National Party has now published its manifesto, which picks up similar themes. The SNP has a number of policies relating to strengthening the position of trade unions in the workplace, with part of the … Continue Reading
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
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
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
