According to information obtained by News, the Investment Association (IA), a significant trade association for the industry, will release an updated set of compensation guidelines for the largest listed businesses in the UK on Wednesday.
The revised rules include a streamlined framework for company boards that have previously expressed dissatisfaction with the lack of clarity surrounding investor expectations about executive compensation packages.
According to sources close to the city, the IA decided to take a more practical stance on a matter that has often become a cause of contention in the relationship between boards and shareholders after receiving input from members.
The importance of long-term value creation in compensation practices will continue to be emphasized by the IA’s updated principles, which specifically link pay levels to business performance.
According to someone acquainted with the revised principles, it will also emphasize the necessity of “supporting individual and company performance within the context of sustainable long-term financial health of the business and sound risk management.”
Eight months after acknowledging in a letter to the chairs of the compensation committees of FTSE-350 companies that London-listed companies were finding it more difficult to compete due to the pay gap with their US rivals, the IA has published amended recommendations.
