A majority of the U.K.'s largest listed companies have either aligned directors' defined benefit pension contributions with those of employees or committed to do so in the coming years, according to research by the Investment Association.
The IA published its latest register tracking shareholder dissent at listed companies. It gathers data from 2020 annual general meetings and found that 98% of FTSE 100 firms had made changes or committed to.
Fourteen FTSE 100 companies reduced the pension contributions of existing directors as of the 2020 annual general meetings season, while 43 firms committed to reducing contributions in the future, the register showed. Six FTSE 100 companies chose to increase their employees' contribution rates to bring figures into alignment.
The IA represents money managers with £8.5 trillion ($10.99 trillion) in assets under management.
However, directors at 10 FTSE 100 companies still receive at least 25% more than employees in terms of pension contributions from their employers. These companies also did not specify plans to align director pension contributions with the rest of the workforce by the end of 2022, the IA said. In 2019, the IA called on companies to put credible plans aimed at equalizing pension contribution of directors and employees in place by 2022.
In 2020, shareholders of 46 companies voted against director re-election because directors sat on an excessive number of boards; due to a lack of staff diversity; or for decisions made by remuneration committee chairmen, according to the register. Investors also questioned executive pay at 45 new FTSE All-Share companies.
During the AGM season, 43 FTSE All-Share companies also withdrew AGM resolutions related to dividend payments, as investors asked companies to consider it was appropriate to issue them during the pandemic.
"Providing directors with the same pension contributions as the rest of the workforce is fundamentally an issue of fairness. Given the economic difficulties many people across the U.K. are facing, it is only right that the majority of FTSE 100 companies are now aligning their executive pension contributions with their workforce," Chris Cummings, CEO of the Investment Association, said in a news release.
Lord Martin John Callanan, the U.K. business minister, added in the release: "I am really pleased to see the progress the vast majority of FTSE 100 companies have made towards bringing their executive pension contributions in line with the wider workforce, and would urge each and every business on the list to ensure plans are in place by 2022."
