Executive pay, executive remuneration, say on pay, bonus or LTIP. Whatever it is called, CEO pay has become one of the most talked about issues in corporate governance in recent years.

Executive Pay Guidelines

Over the past 30 years the Association of British Insurers (ABI) has been the primary investor body responsible for setting guidelines on pay.

The 2013 ABI Principles of Remuneration were the last set of principles issued by the ABI directly. Following the merger of ABI Investment Affairs with the Investment Management Association (now the IA) in June 2014, the Investment Association assumed responsibility for all shareholder guidance previously issued by the ABI. In 2015 The Investment Association Principles of Remuneration were published.

In addition to our own Say on Pay Governance Rating, Manifest’s  research reports take full account of the IA principles and investor best practice principles.

History of the ABI Executive Pay Guidelines

The following timeline marks the development of the guidelines over the years. [Copies of original documents will be uploaded in due course]

Source: The ABI Guidelines: compliance and performance in the FTSE-100. [Link]

Association of British Insurers (1987) Share Option and Profit Sharing Incentive Schemes. Summary of Revision to Guidelines to Requirements of Insurance Offices as Investors. ABI, 51 Gresham Street, London EC2V 7HQ (13 July, addendum 6 May 1988, and amended 14 August 1991). [Link]

Association of British Insurers (1991) Share Incentive Scheme Guidelines. Memorandum. ABI, 51 Gresham Street, London EC2V 7HQ.

Association of British Insurers (1993) Share Scheme Guidance. A joint statement from the investment committees of the ABI and NAPF. ABI, 51 Gresham Street, London EC2V 7HQ. [Link]

Association of British Insurers (1994) Long Term Remuneration for Senior Executives, (May) ABI, 51 Gresham Street, London EC2V 7HQ. [Link]

Association of British Insurers (1995) Share Option and Profit Sharing Incentive Schemes. (February) ABI, 51 Gresham Street, London EC2V 7HQ. [Link]

Association of British Insurers (1999) Share-Based Incentive Schemes – Guideline Principles. Interpretation and Application in the Context of Currently Evolving Practice. (19 July) ABI, 51 Gresham Street, London EC2V 7HQ.

Association of British Insurers (1999) Institutional Investment – Initiatives on responsible voting linking pay to performance. Press release, July 19. [Link]

Association of British Insurers (2001) Guidelines for Share Incentive Schemes. (1 March) ABI, 51 Gresham Street, London EC2V 7HQ.

Key Steps in Executive Pay Guidelines

Date:	Event:
April 1984	Finance Act 1984
Nov 1984	NAPF: ‘Share Scheme Guidelines’
April 1985	BIA Investment Protection Committee
July 1987	ABI: ‘Share Option and Profit Sharing Incentive Scheme’
March 1988	NAPF: ‘Share Schemes’
May 1988	ABI: ‘Addendum to Share Option and Profit Sharing Incentive Scheme Guidelines’
Aug 1991	ABI: ‘Second Addendum to Share Option and Profit Sharing Incentive Scheme Guidelines’
Dec 1992	Cadbury Committee Report
July 1993	Joint NAPF-ABI statement on Share Schemes
May 1994	ABI: ‘LT Remuneration for Senior Executives’
Sept 1994	ASB: ‘Urgent Issues Task Force Abstract 10’
Feb 1995	ABI: ‘Share Option and Profit Sharing Incentive Schemes’
July 1995	Greenbury Report
May 1996	ABI: ‘Long-term Incentive Schemes – note of emerging good practice’
Jan 1998	Hampel Report
June 1998	Combined Code
June 1999	ABI: ‘Share Option and Profit Sharing Incentive Schemes’
July 1999	DTI: ‘Directors’ Remuneration. A consultative document’
July 1999	ABI: ‘Share Incentive Schemes – a statement of principles’ and ‘Share-Based Incentive Schemes – Guideline Principles’
March 2001	ABI: ‘Guidelines for Share Incentive Schemes’
Dec 2002	‘Directors’ remuneration Report Regulations 2002’
Jan 2003	Higgs Report
June 2003	DTI: ‘Rewards for Failure. A Consultative Document’
July 2003	‘The Combined Code of Corporate Governance’
Dec 2003	ABI: ‘Principles and Guidelines on Executive Remuneration’
Dec 2004	ABI: ‘Principles and Guidelines on Remuneration’

 

 

Last Updated: 26 February 2017