The Investment Association has outlined areas of company remuneration that its members will focus on during next year's annual general meeting season.
The industry body for the U.K. money management industry wrote an open letter to the chairs of remuneration committees of FTSE 350 companies. The letter outlines its 2018 principles of remuneration, which the IA revises annually to reflect current best practice for listed companies when they set executive pay.
The letter also outlines areas that the IA's 250 U.K.-based money manager members, which represent about £7 trillion ($9.2 trillion) in assets under management, will focus on next year.
Among their considerations include levels of executive pay, where the IA said its members expect to see a continuing trend of companies reducing future variable pay awards, such as bonuses; greater transparency on financial and non-financial bonus targets to ensure pay is in line with performance; and disclosure of pay ratios between CEOs and the average employee.
The 2018 principles have been updated to include two new requirements for listed firms: that relocation benefits should now be disclosed at the time of appointment and only be paid for a limited period; and that annual bonus targets should be disclosed within 12 months of payment, while a portion of any bonus should be deferred if the bonus is greater than 100% of salary.
The letter and principles are available on the IA's website.
