Third of UK's top companies to cut executive pensions - investor body

By Lena Masri LONDON (Reuters) - Nearly a third of the companies in Britain's FTSE 100 index of blue chip firms have agreed to cut pension payments for executives, the Investment Association said on Wednesday, amid increasing scrutiny of the gap between bosses' and ordinary workers' pensions in Britain. In February, the Investment Association, which represents big asset managers, said a company would be 'red-topped' if it did not explicitly state that any new executive director would have pension contributions set in line with the majority of employees.

Reuters August 28, 2019 06:05:43 IST
Third of UK's top companies to cut executive pensions - investor body

Third of UKs top companies to cut executive pensions  investor body

By Lena Masri

LONDON (Reuters) - Nearly a third of the companies in Britain's FTSE 100 index of blue chip firms have agreed to cut pension payments for executives, the Investment Association said on Wednesday, amid increasing scrutiny of the gap between bosses' and ordinary workers' pensions in Britain.

In February, the Investment Association, which represents big asset managers, said a company would be "red-topped" if it did not explicitly state that any new executive director would have pension contributions set in line with the majority of employees.

A red top is the highest level of warning used for companies where shareholders should have the most serious concerns, though the Investment Association has no formal power over how investors vote on company policies.

The aim is to stop pensions being used as a mechanism for increasing total pay.

A total of 30 FTSE 100 companies have made significant changes as a result of the campaign, the Investment Association said.

"Shareholders will continue to focus on bringing executive pensions in line with majority of the workforce over the next 12 months," Chris Cummings, the Investment Association's CEO, said in a statement.

"Companies that do not take on board shareholder concerns risk facing yet more shareholder rebellions next year."

Of the 30 companies that have made changes, 17 have said that any new director will be given a pension contribution that is in line with the one given to the majority of staff, the Investment Association said in a statement.

Three companies have appointed new directors with a pension contribution in line with the majority of employees, six other companies have reduced contributions for existing and future executives and four companies have also reduced pension contribution for incumbent directors immediately, the Investment Association said.

"There is now more transparency than ever around the UK’s biggest companies and these results show that important issues of excessive executive pay and diversity on boards are starting to be taken seriously," British Business Secretary Andrea Leadsom said in a statement.

The Investment Association has also said that Britain's top companies will face a red warning if they do not have more than one woman on their board, adding to pressure for more female representation at top levels of management.

Ratings on all aspects of a company's governance are done three weeks before its annual shareholders' meeting.

(Reporting by Lena Masri. Editing by Jane Merriman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Survivor recalls horror after Congo mine collapse
World

Survivor recalls horror after Congo mine collapse

By Crispin Kyala KAMITUGA, Democratic Republic of Congo (Reuters) - Kinyenye Furaha passed out from shock when he realised a mine collapse in eastern Congo had buried more than 50 fellow miners including his brother, he said on Sunday, as the hunt continued for bodies two days after the disaster. Miners searching the site near the town of Kamituga in Democratic Republic of Congo have so far recovered 18 bodies, after heavy rains on Friday caused the artisanal gold mine to cave in, burying those working below ground.

Kremlin set for election wins, but Navalny supporters make rare gains in Siberia
World

Kremlin set for election wins, but Navalny supporters make rare gains in Siberia

By Tom Balmforth and Maria Tsvetkova MOSCOW/TOMSK (Reuters) - The ruling United Russia party looked set for an array of local election wins on Sunday, but was also on course for some setbacks as stricken Kremlin critic Alexei Navalny's supporters made rare gains in city politics in Siberia. The local elections were closely watched for signs of protest voting against the ruling party that backs President Vladimir Putin amid frustrations over years of falling wages and the government's handling of the pandemic. The votes also followed the suspected poisoning by a rare nerve agent of opposition politician Navalny who had promoted a tactical voting strategy to hurt United Russia and fielded dozens of candidates for city councils in Siberia

Japan's Suga poised to win party race, headed for premiership
World

Japan's Suga poised to win party race, headed for premiership

By Linda Sieg TOKYO (Reuters) - Japanese Chief Cabinet Secretary Yoshihide Suga, a longtime loyal aide of outgoing Prime Minister Shinzo Abe, was poised to win a ruling party leadership election on Monday, virtually ensuring that he replaces Abe this week in the nation's top job. Suga, 71, who has said he would pursue Abe's key economic and foreign policies, is expected to get the bulk of votes from 394 Liberal Democratic Party (LDP) lawmakers and is likely to win a majority of 141 votes from the party's local chapters.