Executive pay: The IA continue to urge restraint in updated guidelines

Many FTSE companies are likely to seek shareholder approval for new pay policies in 2020. With that in mind, the Investment Association’s updated Principles of Remuneration emphasise that remuneration committees must consider the wider employee pay and fairness of executive pay when setting remuneration levels and deciding on pay outs.

The updated guidelines revise certain features of executive pay, focussing on fairness and restraint. These include monetary caps, approach to leavers, pensions, remuneration structures, and performance conditions.

Click here for details and commentary.

Click here for a version of the guidelines showing the changes from last year, and here for the IA’s letter to RemCo chairs.

What next?

As the IA point out, the focus on executive pay from shareholders, employees and other stakeholders as well as politicians and the media, shows no sign of abating. In preparing new policies and reviewing potential vestings, RemCos need to ensure, more than ever, that they have the appropriate powers. We can help with this. We will shortly issue our updated online Directors’ Remuneration Report guide for the 2020 AGM season. In the meantime, if you’d like assistance with your pay disclosures or policy review, please contact Alex Beidas, Mirit Ehrenstein, Neil Sharpe, or your usual Employment and Incentives contact.