The pay of top executives remains a major concern for pension scheme shareholders, according to the Pensions and Lifetime Savings Association.
Each year it reviews the voting behaviour at annual general meetings of FTSE firms, and it that shows that remuneration-related dissent has grown over the last five years.
It says 55 resolutions for remuneration-related dissent at FTSE 350 annual general meetings were submitted in 2019.
This is the same number as 2018 – across 43 different companies – and shows the continuing importance of executive pay to pension plans.
The PLSA points out these results show remuneration-related dissent remains at a five-year high.
The report notes the average pay for FTSE 100 chief executives has increased from around 40 or 50 times that of the average UK worker in the mid-1990s to 117 times the average worker today.
But there is evidence FTSE 100 firms have begun to take note of dissent levels amid growing investor frustration at the lack of progress.
For the financial year ending 2018, the median FTSE 100 chief executive pay was £3.46m; a fall of 13 per cent from the previous year’s figure of £3.93m.
This has been accompanied by a number of companies deciding to head off investor dissent by proactively reducing bonuses, executive pension entitlements or overall salary in advance of the 2020 AGM season.
PLSA policy lead on investment and stewardship Caroline Escott says: “The PLSA has long argued that pension funds should use their votes to encourage companies to behave responsibly on issues like executive pay, or to consider the implications for their business models and strategies of climate change.
“As long-term investors, pension funds are ideally placed to encourage companies to behave in a way that ensures sustainable business success. We would also urge scheme investors to use the 2020 AGM season to hold directors individually accountable on issues of continued concern – doing so can be a powerful tool to effect change.”
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