The Pensions and Lifetime Savings Association publishes topical questions to aid trustees in considering the effectiveness of their managers’ stewardship activity. We encourage funds to ask these questions during their regular manager reviews in an effort to understand their managers’ approaches and activities and to ensure that they are adhering to the stewardship policies.
TOPICAL QUESTION FOR YOUR MANAGER
Background: Excessive executive pay remains a contentious subject, with recent research highlighting the weak link between pay and performance, while a PLSA survey of our pension fund members revealed that 85 per cent are concerned by pay gaps between executives and the wider workforce. Following this research, we published our updated Corporate Governance Policy and Voting Guidelines, with a new recommendation that investors who vote against companies’ remuneration practices should also vote against the re-election of their remuneration committee chair.
Question: How will you exert downward pressure on executive pay at the 2017 AGM season, and will you be following the PLSA’s specific guidance to vote against the remuneration committee chair when you vote against a remuneration policy?
Read previous questions here.