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6 November 2012
Robert Hingley, the ABI's Director of Investments comments on the IDS Executive Pay Report saying that company boardrooms are listening to shareholders on pay and performance.
Robert Hingley, Director of Investment Affairs, ABI comments:
“Although we cannot comment on the accuracy of the figures, it is clear there has been restraint over changes to base salaries and bonus payments and that awards made in the current financial year show a minimal increase.
This indicates that shareholders are positively scrutinising the remuneration packages of executives and reflecting the ABI's principles of remuneration.
This addresses investors' concerns over executive pay to ensure awards are linked to performance and shareholders' interests are protected.
Share grants made in 2008/09 are subject to three-year performance targets and were made during highly uncertain economic conditions.
At this time, the ABI urged restraint given the fall in share prices to avoid future “windfalls”.
Equally it was important to balance this with the need to incentivise a turnaround in the private sector, and shareholders believe that share ownership by executives creates alignment of interests.
Performance conditions vary across companies but over the last three years the FTSE 100 has rebounded by approx. 30%, as has the FTSE Allshare and this will be reflected in the value of awards vesting."