04.28.2020

IA Outlines Shareholder Expectations On Executive Pay

The IA has today outlined shareholder expectations on executive pay in light of COVID-19 in its latest guidance to companies.

Shareholders recognise that Remuneration Committees will need to sensitively balance the need to continue to incentivise executive performance at a time where management teams are being asked to demonstrate significant leadership and resilience and ensure the executive experience is commensurate with that of shareholders, employees and other stakeholders.

The impact of COVID-19 will be different for each and every company, whilst there are minimum expectations for every company, shareholders expect Remuneration Committees to take account of their individual circumstances particularly considering the impact on their stakeholders.

Chris Cummings, Chief Executive of the Investment Association said: 

“Investment managers expect executive remuneration to be linked to long term company performance and aligned with the experience of its employees, stakeholders and shareholders. During this exceptional period we expect companies to adopt an approach that is appropriate to their business and the specific impacts of COVID-19, being careful to ensure that executives and the general workforce are treated consistently.”

Source: IA

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