Football, football teams, footballers, footballer’s pay… a comprehensive review of the case law on the taxation of termination payments… this one has got it all! The match… the case (HM Revenue & Customs v Tottenham Hotspur Limited) concerns termination payments made to Peter Crouch and Wilson Palacios. The facts are relatively straightforward. Both player’s contracts with Tottenham … Continue Reading
Alongside the almost complete reversal of recent cuts in the main rate of corporation tax (returning it to 26% by 2020-21 – a rate not seen since 2011 or, rather, the time of the last Labour government), the proposal to introduce a so-called ‘Robin Hood’ tax on financial derivatives (a proposal mired by its own complexity … Continue Reading
Three publications over the last few weeks are particularly relevant for companies preparing their new remuneration policies for 2017 (including most of the FTSE100). Hermes Investment Management recently published its “Remuneration principles: clarifying expectations”. This is its first solo effort – it previously was part of a group of large investors who jointly published their … Continue Reading
Legal & General Investment Management (LGIM) recently published its Corporate Governance & Responsible Investment Policy – UK and backed it up with a letter to the chairs of the FTSE350. Looking at the section on remuneration (the largest part), there is a strong sense of déjà vu. Not surprising really, since LGIM is a member … Continue Reading
The Business, Innovation and Skills Committee has launched a corporate governance inquiry, which includes a focus on executive remuneration. The chair of the committee, Ian Wright MP, said: “Whopping pay awards to senior executives are not only vastly bigger than workers could ever expect to receive but often seem to have very little relationship to … Continue Reading
The GC100 and Investor Group have recently published updated directors’ remuneration reporting guidance to reflect the changes in practice since their original guidance in 2013 and the voting patterns of the 2016 AGM season. The large majority of the FTSE100 will be putting new remuneration policies to a shareholder vote next year on the expiry … Continue Reading
Aside from the few companies with later year-ends, the last couple of AGMs of the FTSE 100 were held last week, so now would seem an opportune time to summarise the outcomes and trends from the 2016 season. One hallmark of the season was that it appeared to be a re-run of the “shareholder spring” … Continue Reading
With the news today that Theresa May will become prime minister this Wednesday, we note with interest reports that she intends to make large companies more accountable by having consumers and employee representatives on boards. This resurrects an idea put to consultation by BIS during Vince Cable’s watch in the run-up to the introduction of … Continue Reading
Although we’re not in the business of crystal ball-gazing, here are some possible issues relating to Brexit and executive pay, particularly share-based remuneration, that we’d like to throw into the pot (unless that’s too much of a mixed metaphor). It seems unlikely that post-Brexit the UK would impose restrictions on overseas issuers offering their shares … 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
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
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
On August 5, 2015, the Securities and Exchange Commission (SEC) adopted a final rule that requires a public company to disclose the ratio of the compensation of its CEO to the median compensation of its employees. Companies will be required to provide disclosure of their pay ratios for their first fiscal year beginning on or … 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
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
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
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
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
As the dust settles on the eagerly awaited HMRC v Martin decision (see our previous blog post), thoughts are inevitably turning to how that decision impacts on an employer’s approach to clawback payments, particularly in the world of variable remuneration. Whilst the judge in the Martin decision was clear that his conclusion turned on the … Continue Reading
The pressure for companies and firms to claw back earnings paid to executives under various incentive plans has been steadily growing over the last couple of years. There was the clarification in the ABI guidelines on directors’ remuneration on which we reported last November, to PIRC’s two penn’orth on the topic in March, the Bank … Continue Reading
Despite it being only a couple of weeks since the December year-end FTSE100 companies’ AGM season finished (details on the results at that point were contained in our previous blog post), we have now begun the March year-end FTSE100 companies’ AGMs. Week one saw three FTSE100 companies hold their AGMs, with one of them resulting in our … Continue Reading
Last week saw the last three AGMs of 31 December year-end FTSE100 companies take place, namely for Coca-Cola HBC, RBS and WPP (and all received at least 80% shareholder approval for both parts of the DRR). There was one other AGM (Tesco, which has a February year-end), and two DRRs were released (by SABMiller and … Continue Reading
