The Pensions and Lifetime Savings Association (PLSA) has today (Tuesday) published an updated edition of its Corporate Governance Policy and Voting Guidelines, calling on investors to take a tougher stance on those who set executive pay policy.
The guidelines aim to: promote the long-term success of the companies in which the PLSA’s members invest; and ensure that the board and management of these companies are held accountable to shareholders, such as pension funds.
The new guidelines recommend that if shareholders vote against a company’s remuneration policy, they should also oppose the re-election of the remuneration committee chair as a company director.
The PLSA recently published research revealing that 85% of pension funds were concerned by the pay gap between executives and ordinary workers. The research also showed that while there were significant votes against pay practices at a number of FTSE 350 companies, there was little opposition to the re-election of the remuneration committee chairs.
Luke Hildyard, Policy Lead: Stewardship and Corporate Governance, Pensions and Lifetime Savings Association, said:
“Provocative levels of executive pay are doing great damage to the reputation of British business. The failure of some companies to recognise stakeholder concerns on this issue is a major worry for pension funds as investors.
“Our new guidelines are designed to ensure the individuals responsible for a company’s executive pay practices are held to account. We hope that this can at last deliver meaningful progress on excessive top pay.”
The guidelines also call for companies to explain what steps they are taking to bring diversity, in all its guises, to their boardroom and suggest that annual reports should include better information about a company’s corporate culture and employment practices.
The Corporate Governance Policy and Voting Guidelines can be found on the PLSA's website.
NOTES TO EDITORS:
We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.
Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.
Lucy Grubb, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073 023, E: [email protected]
Babak Mayamey, PR Manager, Pensions and Lifetime Savings Association
T: 020 7601 1718, M: 07825 171 446, E: [email protected]
Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007 713, E: [email protected]