Investment Association publishes 2018 update of ‘principles of remuneration’

Investment Association publishes 2018 update of ‘principles of remuneration’
The Investment Association (IA) has published the 2018 update of its ‘principles of remuneration’ document (remuneration principles) and, in advance of the 2019 AGM season, highlighted certain items of focus.

The remuneration principles set out IA members’ views on the role of shareholders and directors in relation to remuneration and the manner in which remuneration should be determined and structured. They aim to provide a guide to shareholder expectations and good practice for companies with a main market listing but are also relevant to companies on other public markets, such as AIM, and other entities. 

The remuneration principles contains three principles (the principles), which concern remuneration policies, remuneration structures, and levels of remuneration. The principles are then supported by guidance to help remuneration committees apply the principles and ensure a proper level of shareholder protection. The guidance consists of sections which provide general guidance, guidance on fixed remuneration, and guidance on variable remuneration.

 

Changes for 2019

In the letter of introduction to the remuneration principles, Andrew Ninian (Director, Stewardship and Corporate Governance) sets out the key changes and highlights some items of focus for 2019. He explains that review of the remuneration principles took place against the backdrop of the introduction of the 2018 UK Corporate Governance Code and an increasing level of dissent on remuneration resolutions at FTSE 100 AGMs. He says that IA members have expressed frustration that many companies are not listening to investor views. As a result, investors have often felt forced to vote against companies' remuneration reso

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