Far fewer FTSE 100 companies made changes to their remuneration arrangements for top executives this year, according to an analysis of data published under the new disclosure requirements by professional services firm, Deloitte. Only 17% substantially changed arrangements, compared to more than three-quarters doing so in 2014. The Deloitte research counters that of the recent study by National Association of Pension Funds (NAPF) into shareholder dissention in suggesting that the scale of shareholder rebellions is low; 82% of companies received more than 90% votes in favour of their annual remuneration report, Deloitte suggests.
Stephen Cahill, partner in the remuneration team at Deloitte, comments:
‘This year’s report provides evidence that companies are listening to shareholders. This has led to the overall level of support for remuneration reports remaining steady and high, demonstrated by a median of 97% votes in favour. These positive results are due to an increased dialogue between companies and their shareholders as well as the new disclosure regime. We have seen a better quality of information disclosed and remuneration policies which incorporate many of the best-practice features shareholders expect to see.’
There has been a noticeable move to simplify remuneration arrangements. The number of companies operating more than one long-term plan is decreasing and now 21% of FTSE 100 companies operate more than one long-term plan, compared with 29% last year. A number of companies no longer operate a bonus matching plan and a straightforward bonus deferral is now in place in 69% of FTSE 100 companies.
Cahill adds:
‘Shareholders have been encouraging companies to move towards clearer and simpler remuneration arrangements and we have seen a significant move in this direction in recent years. Companies are removing deferred bonus matching arrangements and moving to a simple bonus deferral alongside just one long-term incentive plan.’