IA Issued Principals of Remuneration and Shareholder Expectations for 2023

This is an annual update to capture institutional shareholder good governance views on executive compensation and related matters (some twenty-one detailed pages, much of which is not new)

Below is a CORPGRO summary of the main changes under five headings: with a few words as a taster.

To view or download Damian Carnell's summary of the changes, plus the updated IA Principles of Remuneration and a letter to Remuneration Committee Chairs setting out IA member expectations for the 2023 AGM season, click the box below. 

Cost Of Living, Inflation and Stakeholder Experience

• Executive compensation must be sensitive to the wider scene, and salary rises BELOW those for the general workforce might be appropriate.

2020 LTIP Grants and “Windfall Gains” 

• LTIPs vesting in 2023 might contain "Windfall Gains" from grants at a low 2020 share price.

• Adjustment downward of vesting is appropriate if so.

• But what is a Windfall Gain and what is not is less clear, so care is needed.

ESG Metrics Executive Remuneration 

• This is now common, some investors expect it to be universal, others have more specific views.

• Good disclosure is required, but also the story of your "journey" and the expected future direction, which might be tricky (see More, Better and New CORPGRO blog on that).

 IA Principles of Remuneration 2023 (Including NED Fees) 

• But beware, the principles also require disclosure of the rationale for any proposed rise.

• The timing of any NED fee rise needs care. First it should be sensitive to the wider scene, and second it is probable that an "NED New Normal" fee expectation will emerge in future months.

Approach To Pensions In 2023 

• As long expected, the HARD STOP 31st Dec 2022 date for director pensions alignment with the general workforce has arrived.    

• RED TOP vote against IVIS recommendation will apply to all non-compliant remuneration policies or reports 

Thank you for your time. We would be delighted to discuss how we can help you and your business with any of these issues.

Damian Carnell - [email protected]         +44 (0) 7989 337118

VA Bec Bostock - [email protected]

Please share this CORPGRO information with your board or your colleagues.