Shareholder support for remuneration reports dips – Deloitte

The number of FTSE 100 companies receiving less than three-quarters of votes in support of their remuneration reports so far this year is already higher than during the ‘shareholder spring’ of 2012, according to Deloitte’s annual FTSE 100 report. Just over a quarter of the top 30 companies had their remuneration reports approved by 95% or more of shareholders, compared with 52% receiving this endorsement last year.

Other key findings include:

• The median salary increase for chief executives in top companies remains at around 2%, a similar figure to each year since 2012.
• Annual bonuses and long-term incentive plan awards have also remained fairly steady, prompting the survey’s authors to conclude that ‘pressure from investors has, to some extent, put the brakes on board pay’.
• Remuneration structures are simplifying down to one long-term plan in general and participants are increasingly required to wait for five years or more before receiving any of the shares awarded.

Stephen Cahill, Partner in Deloitte’s remuneration team, said:

‘The spread of payouts from long-term plans appears to demonstrate a stronger link to performance than payouts from annual bonus plans. Median bonus payouts have consistently been between 70% and 80% of the maximum every year for the last ten years.’

‘15th Annual Guide to Directors’ Remuneration in FTSE 100 Companies’, Deloitte, September 2016. For more information, please visit: www2.deloitte.com/uk/en/pages/press-releases/articles/deloitte-ftse-100-report-2016.html