Questions for your Manager - August 2016

The Pensions and Lifetime Savings Association publishes monthly topical questions to aid trustees in considering the effectiveness of their managers’ stewardship activity. We encourage funds to ask these questions during their regular manager reviews in an effort to understand their managers’ approaches and activities and to ensure that they are adhering to the stewardship policies.

AUGUST'S TOPICAL QUESTION FOR YOUR MANAGER

Background: The Investment Association recently published the findings of its working group on executive pay. The report proposes a number of different models for paying UK business leaders, such as a restricted share award for Chief Executives to be held for a fixed period of years. These models could expand pay structures beyond the established practice of payments comprised primarily of a salary, annual bonus and a share based ‘long-term’ incentive plan (LTIP) awarded annually based on performance over the preceding there years.

Question: Do you intend to encourage the uptake of any of the models for executive pay proposed in the Investment Association’s working group? Do you think this will result in a reduction in the size of executive pay awards, which have been such a subject of controversy in recent years?

Read previous questions here.