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
The UK’s National Association of Pension Funds (NAPF) has rebranded itself as the Pensions and Lifetime Savings Association (PLSA). Why the change? The PLSA says it better reflects changes to the way retirement provision is made, with people working longer and funding retirement in new ways, as well as having new rights to access their … 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 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
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
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 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
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
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
