The Pensions and Investment Research Consultants Ltd (PIRC) in the UK has published the 2014 UK Shareholder Voting Guidelines. According to PIRC, executive remuneration, gender diversity, shareholder access to financial accounts on key decisions and governance of investment trusts all face tougher scrutiny under the 2014 Guidelines, which are the 18th Edition of this publication.
The Guidelines advise shareholders to vote against excessive remuneration packages based around three new key assessment measures, namely:
- CEO bonuses or variable pay exceeding 200% of CEO fixed salary;
- the balance of CEO pay levels against Total Shareholder Return (TSR) at publicly listed companies over a five-year period; and
- the alignment of fixed CEO pay against a 20-1 ration with average employee remuneration elsewhere in the organisation.
PIRC also states that it has maintained the impetus to build greater diversity and depth at the highest corporate decision making levels, with a policy to no longer base its recommendations solely on company disclosure of progress towards the Davies goal. PIRC states that it will also seek evidence that the organisation advocates explicit targets for representation and place further accountability on nomination committee chairs to carry new policy through.