WPP: did shareholders look before the LEAP?

WPP Martin Sorrell pay

WPP, whose chief executive Sir Martin Sorrell last year caused headlines for a £70m pay package, has announced its final investment performance figures for its controversial long term incentive scheme, LEAP.

The WPP figures show that Sir Martin Sorrell would receive £41.5m from the LEAP scheme for 2016 – compared with their value of 20.69m when the shares were granted in 2012.… Read the rest

Board gender pay gap revealed in Singapore

Singapore board diversity

More evidence of board gender diversity challenges were recently revealed, this time in Singapore. Female directors at companies listed on the Singapore Stock Exchange (SGX) are paid 56.8% of male directors’ remuneration on average indicating a 43.2% pay gap according to research by the National University of Singapore’s (NUS) Business School.… Read the rest

Thomas Cook: joined up voting on pay

Thomas Cook pay

Travel company, Thomas Cook received a warning on pay this week at its AGM when the voting results showed that some investors at starting to take a joined up approach to remuneration-related voting. This is a signal to all companies seeking approval for their remuneration policies and new incentive plans this year that shareholders do not want the potential for excessive awards under these schemes.… Read the rest

UK Church Investors Group warn on CEO pay

Church Investors Group CEO pay warning

The Church Investors Group (CIG) has written to all FTSE 350 company secretaries outlining its revised voting policy for 2017 which includes a tough stance on executive pay. The CIG brings together the major church-based institutional investors and with their combined assets of approximately £ 17 billion aims to increase their impact through the joint voting policy.… Read the rest

Engagement fail: Imperial Brands pay policy stubbed out

Imperial Brands Pay Proposals Stubbed Out

Despite attempts at investor engagement, tobacco firm Imperial Brands has withdrawn the resolution amending its policy at its AGM next week (1st February). The company said that that the decision followed consultations with shareholders, and that the existing policy  approved by shareholders at its 2015 AGM  will continue to apply.… Read the rest

Tougher investor stance on executive pay signalled for 2017

The UK’s Pension’s and Lifetime Savings Association (PLSA) has advised its pension fund members to act more strongly on executive pay. It is advising funds oppose the re-election of the remuneration committee chair as a company director if they decide as shareholders to vote against a company’s remuneration policy.… Read the rest

Labour’s Jeremy Corbyn speaks out on executive pay

Jeremy Corbyn

Jeremy Corbyn, leader of the UK’s opposition Labour Party has outlined his party’s agenda for governance reform focusing on CEO pay ratios. In a speech in Peterborough last week (10th January) Corbyn added his voice to the current debate surrounding Theresa May’s governance green paper proposals.… Read the rest

CFA UK-backed study reveals continuing rising CEO pay

Research commissioned by CFA UK has examined the alignment of chief executive (CEO) pay and company value creation between 2003-2014/15 and found that total pay for the median CEO increased by 82% in real terms over the period. However, the median FTSE-350 company generated little in the way of a meaningful economic profit over the period 2003-2009 , and although performance improved from 2010 onwards the median firm generated less than 1% economic return on invested capital.… Read the rest

BlackRock set to vote against RemCo Chairs

Charlotte Villiers

Investment giant, BlackRock, has indicated it will be toughening its stance on executive pay after giving evidence to the House of Commons’ Business, Energy and Industrial Strategy (BEIS) select committee. In future it will now hold remuneration committee chairmen to account for the decisions they have made; a move which Manifest recommended to the Committee at the previous session.… Read the rest

UK’s corporate governance green paper widely welcomed

The UK government’s widely trailed corporate governance green paper has focused, as expected, on executive pay and stakeholder representation at companies as well consulting on corporate governance rules for large privately owned companies. Manifest welcomed the consultation particularly the Government’s questions in relation to proxy advisors and other shareholder advisors who support investment managers and asset owners in their stewardship activities.… Read the rest

UK #corpgov #execpay Green Paper widely expected this week

The British press were this weekend widely tipping that the publication of Theresa May’s flagship corporate governance reforms will be published this week. The BBC, GuardianTelegraph, Sunday Times, and Scotsman have all run more or less the same articles over the weekend highlighting the key features of a proposed Bill:
  • A requirement for companies to publish pay ratios showing the difference in pay between the chief executive and average employee;
  • Improving the effectiveness of remuneration committees and the extent to which they must consult shareholders and the wider company on pay;
  • Employee advisory representation on remuneration committees;
  • A binding annual shareholder votes on executive pay packages; and
  • Private company directors will be subject to a new code of conduct on behaviour and transparency.
Read the rest

Executive pay: UK fund managers trade group speaks out

Theresa May UK PM

UK fund managers members take executive pay reform seriously according to the UK’s Investment Association, which this week responded to the recommendations of the Executive Remuneration Working Group. In its new Principles of Remuneration, the IA suggests that rather than opting for the default Salary/Bonus/Long Term Incentive Plan (LTIP) pay structure,  firms should consider pay structures which fit their business and strategy.… Read the rest