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Press Release

Tuesday 2 October 2012


The Investment Management Association (IMA) supports the Department of Business, Innovation and Skills (BIS) in seeking to improve transparency in the reporting of directors’ pay, but puts forward a number of considerations.

The IMA believes that having two parts to the remuneration report, setting out the remuneration policy and then how it has been implemented, will help investors hold companies to account. However the regulations are complex and prescriptive, meaning reports could become even longer and include more standardised language. The IMA therefore recommends that the detail should be in the guidance being developed by the Financial Reporting Council. It also suggests disclosures should be reviewed by BIS after two or three years to ensure the policy objectives have been achieved.

The IMA supports a table outlining the key elements of remuneration and supporting information on pay as it will help improve comparability between companies. But there should be a table for each executive director, as remuneration varies according to individual directors’ responsibilities, which should be published every year – even when there has been no change in the remuneration policy. The IMA also highlights a number of additional areas which should be included:

  • Policy towards remuneration of new executive directors, including the approach to buying out existing packages
  • The extent to which the company takes environmental, social and governance issues into account when setting its policy
  • As there may be commercial sensitivities around disclosing performance targets in advance, the policy on disclosing, or not disclosing, performance targets achieved retrospectively

Furthermore, the IMA suggests that the single figure as to what each director has earned should be explained in terms of its various components. Consistency in how each component is measured is essential to be able to compare the figure year on year and between different companies.

Liz Murrall, IMA’s Director of Corporate Governance and Reporting, said:

“Asset managers are major investors in companies in both the retail and institutional space. Incentivising directors is a key driver of company behaviour and our members recognise the need to address any excesses in executive remuneration.

“We welcome the BIS consultation as it seeks to improve transparency such that a company’s future pay policy will be clear and more easily understood, and makes a clear link between pay and a company’s strategic objectives and performance.

“However it is important that any revised remuneration reports fit within any new framework – for example we are still waiting for the outcome of the Government’s consultation on reporting – it is important that the disclosure of a company’s objectives and measures of performance are consistent.”


The full IMA response is available here.

For further information please contact:

Mona Patel, Head of Communications
020 7831 0898 or 07834 089332

Navdeep Sidhu, Press Officer
020 7831 0898 or 07843 517 618

Christina Bridge, Press Assistant
020 7831 0898

About the Investment Management Association

  • The IMA is the trade body for the UK's £4.2 trillion asset management industry (retail and institutional) which is one of the world's leading investment management centres.
  • Our role is to represent the interests of the asset management industry to government and regulators both in the UK and internationally.
  • The money our members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.

Investment management association