On 14 February 2013, the Pensions Investment Research Consultants (‘PIRC’) published a new edition of its UK Shareholder Voting Guidelines to replace the 2012 edition. The new Guidelines, which reflect a shift in PIRC’s approach, place greater emphasis on the management of shareholders’ capital and take a firmer line on executive pay. Whilst the market does not generally feel compelled to adopt PIRC’s position, it is, perhaps, worth noting that the changes in the new edition include the following:

• Directors’ remuneration

- PIRC will oppose the introduction of all new long-term incentive schemes. PIRC is of the view that such schemes are fundamentally flawed in that they are not, in fact, long term, that they do not act as incentives, and that they are subject to change and manipulation by remuneration committees.

• Remuneration consultants

- PIRC will encourage greater shareholder scrutiny of the role of remuneration consultants and will no longer support the adoption of a company’s report and accounts, the re-election of the chair of the audit or remuneration committees, or the re-appointment of the auditors, where the reporting auditor is also the remuneration advisor to the company.

• Financial reporting

- Where PIRC considers that adherence to IFRS has led to a failure of the accounts to provide the true and fair view, PIRC will not support the adoption of the company’s report and accounts, the re-election of the audit committee and of the finance director responsible for the accounts in question.

The new PIRC Guidelines (the 17th edition) are available from PIRC’s web-site:

http://www.pirc.co.uk/publications