Friday 27 April 2012
IMA SUPPORTS SHAREHOLDERS HAVING BETTER SAY ON EXECUTIVE PAY
Responding to the Department for Business, Innovation and Skills’ consultation, the Investment Management Association (IMA) welcomes the proposals which will improve engagement between companies and shareholders on executive pay.
The binding votes proposed have merit in principle but there remain some practical issues which require further consideration. Implementing a binding vote will have resource and cost implications for both companies and shareholders. It is likely to divert shareholders’ resources from issues such as strategy and performance that more often directly impact value. Furthermore, the binding vote on future remuneration could mean that companies are left unable to offer the incentives needed to attract high calibre executives, especially for companies competing in a global market.
Liz Murrall, IMA Director of Corporate Governance and Reporting said:
“Incentive schemes can impact the way a company operates and its success. Shareholders have a key role to play.
“However, there are some practical difficulties with the binding votes as currently proposed and we are keen to work with BIS to resolve these.”
Read the IMA’s full response here.
For further information please contact:
Mona Patel, Head of Communications, IMA, 020 7831 0898 or 07834 089332
Christina Bridge, Press Assistant, IMA, 020 7831 0898
About the Investment Management Association
The IMA is the trade body for the UK's £4 trillion asset management industry. The money its members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs. Our purpose is to support and promote a commercially successful and growing UK investment management industry as we seek to improve the financial outcomes for customers - savers and investors.