With most large companies reporting their annual reports in December and March each year, the bulk of the FTSE 350 and SmallCap companies with year-ends in 2020 and early 2021 are now published. As a result, in the last few months we have added information on around 200 large companies to our database. Excluding investment trusts, this includes 27% of the FTSE 100, around 25% of the mid-250 and about 40% of SmallCap firms. What emerges from these is that the pandemic continues to impact pay policies but also that a growing number of remuneration committees are beginning to look beyond the ongoing crisis.
This 120-page client report explores some of the recent trends, summarise all the latest policies as well as highlighting a number of case studies where firms have followed less traditional approaches. In addition to the case studies, this time we examine three specific trends in more detail: ESG performance metrics; annual bonus deferral trends; board and staff-level pensions.
E-reward’s Summit Executive Remuneration Database captures all the latest boardroom pay trends – both the headline remuneration figures as well as the substantial amounts of qualitative information contained in remuneration reports. While the numbers tell us a lot, sometimes remuneration reports are concealing other interesting developments that are not so apparent. For this reason – accompanying at least six vast database uploads a year – our researchers provide clients with frequent, in-depth commentary of all the emerging trends that they have pinpointed in the latest remuneration reports.
This update was issued to our clients in August 2021 as part of their annual subscription to our executive remuneration database and released more widely in November 2021.
By Steve Glenn, Head of Executive Remuneration Research, E-reward.co.uk
Accompanying at least six vast database uploads a year, our researchers provide clients with frequent, in-depth commentary of all the emerging trends that they have pinpointed in the latest remuneration reports. This update was issued to our clients in August 2021 as part of their annual subscription to our executive remuneration database.
Key findings
With most large companies reporting their annual reports in December and March each year, the bulk of the FTSE 350 and SmallCap companies with year-ends in 2020 and early 2021 are now published. As a result, in the last few months we have added information on around 200 large companies to our database. Excluding investment trusts, this includes 27% of the FTSE 100, around 25% of the mid-250 and about 40% of SmallCap firms.
Here, we focus on some of the more interesting examples our team pinpointed in the latest batch of remuneration reports published by eight companies.
The latest data on the prevalence of environment, social and governance (ESG) metrics as well as how the position has changed since our last analysis. We also set out a substantial list of individual company details where firms have signalled changes to this area of policy.
In total, our database records 24 different performance targets but we have chosen to only present the main metrics so the charts we feature are not overcomplicated with numerous, less common measures.
Another trend that has been clear from the latest batch of reports has been the growth of annual bonus deferral. This has been an ongoing trend for a number of years which
is viewed positively by shareholders. Changes fall into the three main categories: new deferral introduced; proportion deferred increased; and changes to deferral mechanism.
As well as these broad categories, an increasing number of companies are linking bonus
deferral to whether or not directors have fulfilled their shareholding guidelines.
Back in our December 2020 client report, we outlined the latest trends relating to pensions in the UK’s largest companies, both board and staff levels, and in this section we update this analysis. Director-level pension maxima found in the FTSE 100, mid-250 and SmallCap indices have all fallen quite significantly over the last five years.
Given that companies are focusing on aligning directors’ pension contribution rates with those paid to staff it is not surprising that many organisations have been disclosing the rates that the majority of their people receive.
We summarise some of the main elements of the latest remuneration reports focusing on any changes that have been proposed in the latest period.