Tag Archives: Executive remuneration

Carillion and the “failure” of clawback

The collapse of Carillion has raised many issues relating to public procurement, the actions of the board and the role of the auditors. But a press release by the Institute of Directors suggesting that in 2016 Carillion relaxed the clawback conditions that applied to bonuses has raised questions over remuneration governance. The change seems to … Continue Reading

The FRC puts the UK Corporate Governance Code on a diet

The Financial Reporting Council has published for consultation its review of the UK Corporate Governance Code.  This follows a fundamental review, with the proposed revised Code being a slim shadow of its former self (13 pages instead of 32).  The FRC describes the result as “shortened and sharpened” but the outcome isn’t radical, with the … Continue Reading

Investment Association sets bar for 2018 AGM season

The Investment Association (IA) has published its annual letter to Remuneration Committee chairs and updated its Principles of Remuneration (the “Principles”), and many companies will need to take action before their 2018 AGM. The IA is encouraging voluntary disclosure of CEO pay ratios in 2018 Directors’ Remuneration Reports, has introduced a new requirement to defer … Continue Reading

And so it begins … the 2017 shareholder spring

As we recently reported, 2017 is the year when most FTSE100 companies will be putting their new remuneration policies to a shareholders’ binding vote, against an increasingly hostile background of criticism of the size and complexity of directors’ pay packages. For the early starters in the FTSE100, there have already been casualties.  Imperial Brands withdrew … Continue Reading

Bringing UK “big business” into line: corporate governance reform

As trailed in our recent blog post, the green paper on the reform of corporate governance was published today by the Department for Business, Energy and Industrial Strategy (formerly BIS).  The paper sets out 14 questions for consultation. The consultation covers three main areas: executive pay, “which has grown much faster over the last two … Continue Reading

Great Expectations: Hermes joins the fray on UK executive pay

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

A brake on executive pay? More on employee representation on boards

Tucked away right at the end of Prime Minister’s questions yesterday, immediately before the Autumn Statement, was a very short question: “Does the Prime Minister believe that big companies should put a worker on the board?”  Given recent headlines such as “Theresa May backtracks on putting workers on company boards” (The Telegraph, 21 November) and … Continue Reading

Board games: Employees to be fairly represented on the boards of UK companies?

Originally mooted by Theresa May during the hustings for the leadership of the Conservative Party (see our report), the proposal to enable employee representation on the Boards of UK companies finally assumed the status of formal government policy on Wednesday (5th October 2016) with the measure being specifically mentioned in the Prime Minister’s closing speech to … Continue Reading

Because they’re worth it? More scrutiny of UK executive pay

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

Board stiff? – employee representatives on UK plc boards

As we reported previously, one of Theresa May’s promises at the hustings for party leader was to introduce employee representation on the boards of big businesses, as part of the drive to control executive remuneration. The feasibility and potential pitfalls of this idea are considered in this thought-provoking post on our Employment Law Worldview blogsite.… Continue Reading

Game-changer on boardroom pay in the UK?

The Executive Remuneration Working Group (ERWG), set up last year under the auspices of the Investment Association, has published its much-anticipated final report on simplifying and re-aligning executive pay in the UK.  The ERWG hopes that this report will have a major influence on how executive remuneration in FTSE companies is structured. The remit of … Continue Reading

Culture Club: FRC strengthens link between company values and executive remuneration

The UK Financial Reporting Council (the FRC) has just published a report entitled “Corporate Culture and the Role of Boards“. This is the result of a mammoth project kicked off in early 2015 by a round-table with FTSE100 chairmen.  Content for the report was produced by a survey of 44 chairmen and 33 company secretaries … Continue Reading

May or May not? Further proposals to get tough on UK executive pay

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

The “Brexited” share incentive plan: yet another unknown

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

New dealing rules for executives of UK quoted companies: implications for share plans

The EU Market Abuse Regulation (MAR), which contains new rules about dealing in shares by directors and “persons discharging managerial responsibilities” (PDMRs), will come into force on 3 July 2016.  Unlike the current rules, which are different for companies on the full list and those on AIM, the MAR will apply to all quoted companies. … Continue Reading

Shareholder Spring 2: Rabbit Emerges From The Hat

After weeks of media headlines criticising FTSE 100 executive remuneration, the Investment Association have finally pulled their rabbit from the hat!  The nattily entitled “Executive Remuneration Working Group” set up last year under the auspices of the Investment Association (see our previous blog post) has published its Interim Report (which can be downloaded from the … Continue Reading
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