07 February 2018

Major institutional investors are becoming increasingly critical of excessive pay deals. Data from the Pensions and Lifetime Saving Association (PLSA), trade association for pension schemes, found the average vote against the re-election of remuneration committee chairs rose by almost half at FTSE 100 companies in 2017.

Luke Hildyard, PLSA stewardship and corporate governance policy lead, said voting against reports and policies had been ineffective.

“Voting against individual directors sends a powerful message. It will hopefully sharpen minds. High pay has risen up the agenda since the financial crisis. The concern is that chief executives’ salaries are out of step with the wider workforce.”

Investors traditionally only signal pay concerns by voting against remuneration reports and policies at annual meetings. However, PLSA updated its guidelines for members two years ago, advising a vote against the re-election of remuneration board chairs if the investor felt pay was too high.

Asset managers, including Schroders and Standard Life Aberdeen, are also targeting individual directors.

http://on.ft.com/2DZLWmT

Tags: pay, PLC