ShareSoc Launches New Director Remuneration Guidelines

PRESS RELEASE 80 20/05/2016

ShareSoc (the UK Individual Shareholders Society) has published today its new remuneration guidelines.

In summary:

 FTSE100 CEO pay is too high. It should be less than half of current amounts.

 FTSE 100 CEO’s maximum bonus should be 100% of salary (currently 200% is common) and the LTIP maximum normal annual award should be 100% of salary (currently 300% is common).

 Remuneration creep needs to be reversed.

 Share Options have a role to play in Directors’ remuneration.

 ShareSoc has specific guidelines for smaller companies. Small companies will find these simple guidelines helpful. We suggest companies should follow these guidelines.

 ShareSoc Members will criticise companies who do not follow the ShareSoc guidelines and will raise questions at AGM’s on compliance.

The full Guidelines are present in this document on the ShareSoc web site:https://www.sharesoc.org/ShareSoc-Remuneration-Guidelines.pdf

Commentary

Mark Northway, Chairman of ShareSoc, said “Members of ShareSoc, The UK Individual Shareholders Society, have a right to expect a fair return on their investments. We are deeply concerned by the continuing trend towards excessive and unnecessary CEO remuneration. ShareSoc has therefore developed simple, equitable guidelines, which we would like to see adopted by listed companies as an integral component of their governance framework.”

The ShareSoc guidelines contain broad best-practice principles for larger companies and specific guidance for smaller companies (defined as those with a market capitalisation of less than £200 million).

Mark Northway added “We hope that, as a result of our initiative, ShareSoc members will be even more vocal about poorly designed and overly generous remuneration policies. We will continue to question remuneration reports at AGMs, placing further pressure on the directors of underperforming companies.”

Sarah Wilson, Chief Executive of Manifest, the corporate governance experts, said “Manifest welcomes ShareSoc’s remuneration guidelines. Retail shareholders are an important but often overlooked constituency in the governance debate having been significantly marginalised by the broker nominee arrangements in recent years which make voting unduly burdensome. We are delighted to be able to support their active ownership and very much value their thoughtful contribution.”

Tim Ward, Chief Executive of The Quoted Companies Alliance commented “The ShareSoc guidelines provide detailed guidance on levels of salary, incentives and the percentage of equity dilution. These guidelines give companies an insight into what private shareholders expect to see regarding the remuneration of directors in public companies.

We are pleased that the ShareSoc guidelines reflect the principles set out in the Quoted Companies Alliance’s Remuneration Committee Guide for Small and Mid-Size Quoted Companies, reflecting mutual support of remuneration disclosures that build trust between investors and companies.“

Oliver Parry, head of corporate governance at the Institute of Directors said, “We welcome ShareSoc’s report, which represents an important intervention in the debate on executive pay. Companies do need to listen to shareholders more and respond in a constructive manner. Today’s report highlights a number of ways to simplify pay in large companies. The guidance for smaller companies is also very practical and applicable to both quoted and unquoted companies.”

For further information, please contact:

Roger Lawson

Deputy Chairman, ShareSoc

Telephone: 020-8295-0378

Post Date: May 20, 2016

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Group description:	A new in person group coming soon! Keep and eye on our Events page to register for the launch meeting.
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Group description:	Our group is a broad church that contains investors of varying age and experience. We discuss stocks and investment trusts that we have bought, sold or are interested in and the reasons behind our decisions, and try to make sense of the ever changing investment environment. Our members backgrounds are diverse and include corporate banking, engineering, teaching and the leisure industry. Discussions are robust and challenging but tend to be to be informal, and do not generally involve agendas, presentations or detailed preparation. We are a friendly and approachable group who welcome investors of all levels – we just ask that you contribute, at whatever level you can.
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ShareSoc Launches New Director Remuneration Guidelines

PRESS RELEASE 80 20/05/2016

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