Investment Association publishes updated Principles of Remuneration

  • Corporate Governance  Image

06 Nov, 2017

The Investment Association (IA) has published its updated Principles of Remuneration ("the Principles").

This remuneration guidance sets out its members’ views on the role of shareholders and directors in relation to remuneration and the manner in which remuneration should be determined and structured.

Updates to the Principles, which have been made due to the “ongoing debate surrounding executive pay as well as the Government’s Corporate Governance reform initiatives” include:

  • Updating the section on annual bonus to reflect members’ expectation that bonus targets are disclosed within 12 months of the bonus payment, and that deferral is expected for any bonus opportunity greater than 100% of salary.
  • Reorganising the section on long-term incentive schemes to give a clearer picture of members’ attitudes to specific examples of schemes.
  • Amending the section on relocation benefits

Additionally the IA has issued a letter to Remuneration Committee chairmen highlighting key aspects of the Principles that its members have asked to be re-emphasised to companies. These areas include:

  • Levels of remuneration;
  • Remuneration structures;
  • Shareholder consultation;
  • Pay for performance; and
  • Accountability of remuneration committee chairs.

The press release, revised Principles of Remuneration and letter to Remuneration Committee chairmen are available from the IVIS website.

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