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Managing Your Remuneration Policy, Report And Shareholder Vote

Thursday, 9 February 2017

Report from our breakfast briefing

In January, Equiniti hosted its first breakfast briefing of the year with speakers from Equiniti, Prism Cosec and Willis Towers Watson.

Discussions covered a range of subjects looking at how to avoid pitfalls when revising your remuneration policy, writing the remuneration report and also how to manage shareholding voting.

In 2014, 436 out of 505 companies surveyed put a remuneration policy to shareholders for approval. With a requirement that these are voted on at least once in every three years, we are set to see a large number being put forward for approval at AGMs during 2017. Lisa Graham, Registrar, Equiniti highlighted the importance of liaising with investors and predicts that companies will be closely monitoring votes received in the run up to the AGM. With registrars often receiving votes just prior to the deadline and with an increase in the number of votes being changed, Lisa’s message was to make sure you understand the vote amendment process and don’t relax until all the votes have been received and validated!

Chris Stamp, Director, Prism Cosec talked through the remuneration report structure and reporting guidance. Again, engagement with investors is important with a need to focus on the strategic rationale for pay structures, the process for setting bonus targets and the use of discretion by the Remuneration Committee.

There was a reminder that the Institutional Shareholder Services voting guidelines apply to shareholder meetings after 1 February 2017. Looking at future changes in this area and the theme that Theresa May started last year, Chris highlighted a section within the Department for Business, Energy and Industrial Strategy green paper on corporate governance reform: "The Government want to explore whether there is additional information which companies could provide which would make shareholders more effective in holding boards to account on their executive pay arrangement".

Commenting on the morning’s discussions, Phil Ainsley, Managing Director, Employee Services said, "It’s been interesting hearing about these three important areas of remuneration: strategy; reporting structure; and voting. The message throughout these discussions has been the importance of explaining the link between strategy, performance and remuneration in effectively ‘telling the story’. Thank you to our speakers for such an engaging and insightful briefing and discussion".

For further information follow the links to the full set of slides and Equiniti’s Annual Review of Trends during the 2016 AGM Season. Our next topic for discussion will cover The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, and information about this event will be sent out shortly. Please let your Equiniti Client Relationship Manager know if you are interested in attending.

For further information on this subject, please speak with your Equiniti relationship manager.