Minerva’s stewardship support team has reviewed the new investor guidelines of the Investment Association in the context of Minerva’s current Say on Pay research reports, ratings and voting guidelines to identify the potential impact of the proposals.
The UK’s main investor body, the Investment Association hosted in November 2018 a public Stewardship and Governance conference focused on “Building Trust and Delivering Value”. Keynote speaker, Alex Chisholm the lead civil servant for the Department of Business, Energy and Industrial Strategy (BEIS) outlined the UK government’s vision for good governance and how it contributes to economic success and serves society. A central theme of the UK’s reforms has been the need to re-build trust in business, particularly as it relates to executive pay. As Secretary Chisolm noted, “executive pay remains an issue of public concern. It is actually the biggest barrier to UK public trust in business according to Edelman’s latest Trust Barometer, with 58% citing it as a problem”.
In a wide-ranging speech, Secretary Chisholm also welcomed the Investment Association’s updated remuneration guidelines. The guidelines have been mailed in an open letter to the Chairs of Remuneration Committees of FTSE 350 companies in which the IA expressed their members’ growing frustration that many companies were not listening to investor views.
The 2018 Principles of Remuneration cover seven policy areas:
• Malus and Clawback
• Shareholding Requirements
• Post-employment holdings
• Pay Ratios
• Leaver Provisions
• Restricted Share Plans
Minerva’s current approach substantially addresses the material bulk of new guidance. The IA Remuneration Guidelines 2018 briefing identifies where the IA Remuneration Principles match Minerva’s approach and where any adjustments may be needed. The only notable exception relates to Restricted Share Plans (RSPs) where it’s fair to say that investor opinion is still divided.
IA Remuneration Guidelines 2018 briefing is available to download now!
Pricing: £ 00.00 for non-subscribers | £00.00 for subscribers
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Minerva’s regulatory briefings look at new and emerging issues from the UK and Continental European perspective. Available from Minerva’s shop:
• UK Regulatory Roundup 2018 (Governance Reforms)
• Board Gender Diversity 2018
• Investment Association Remuneration Guidelines
• Employee Board Representation in Europe
• Board evaluation practices
• Board independence
• Climate-change disclosures