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New Executive Pay Guidelines for listed companies

New Executive Pay Guidelines for listed companies

The Investment Association (IA) has updated its executive pay guidelines ahead of the 2019 AGM season.


Partner – People Services, Reward

KPMG in the UK


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The Investment Association is concerned that some companies and their remuneration committees have been unresponsive to investor concerns on executive pay.

The Investment Association (IA) has updated its executive pay guidelines ahead of the 2019 AGM season.

The review took place against a backdrop of a new UK Corporate Governance Code, another lively AGM season and even greater scrutiny of executive pay.

The new Principles and the annual covering letter to the Chairman of FTSE 350 Remuneration Committee Chairs reflects the growing frustration that some companies are ‘still not understanding or listening to the views of their shareholders on remuneration’.

The updated Principles include guidance on:

  • Malus and Clawback - including investors expectations of the enforcement processes companies should have in place to implement these provisions
  • Pensions – pension rates for executives should be reduced over time to be aligned with that available to the majority of the workforce
  • Restricted Shares – expanded guidance for those companies looking to introduce restricted shares

The role of Remuneration Committees once again comes under the spotlight with concerns being raised that some committees have been ‘unresponsive’ to investor concerns and have been ‘very considerate of the management perspective.’

Whilst the vast majority of listed companies pay very close attention to the IA and other investor guidelines, the updated Principles and Chairman’s letter does underline the growing frustration with executive pay both from shareholders and wider stakeholders.

How KPMG can help

KPMG’s Reward Consulting practice regularly advises clients on wide range of remuneration issues including policy design, pay benchmarking and shareholder consultation exercises.

If you have any queries, please get in touch with your normal contact or e-mail

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