In last month’s newsletter, we explained why the Inclusive Ownership Fund (IOF), proposed in the September 2018 Labour Party Conference, may not be the best method of enabling workers to share in the wealth they create.  We agree wholeheartedly that employee ownership can help increase a company’s productivity and encourage employees to identify more closely…

October 23, 2018 Read more >

Value Creation Plans – genuine attempts at designing executive LTIPs or too complex to explain? Some years ago, I attended the AGM of one of the UK’s biggest supermarkets. A shareholder asked a question about the proposed new executive LTIP. After a pause, one of the non-executives stood up and replied “it is too complex…

October 23, 2018 Read more >

How do not-for-profits design their long-term incentives? MM&K investigated the LTIP policies for 59 of the largest not-for-profit organisations to answer this question. Our sample consists of Charities, Housing Associations, Co-operatives, Building Societies, Mutual Insurance companies and Education Establishments (Universities and College Groups). It is important to note that the vast majority of these organisations…

October 18, 2018 Read more >

Negative Feedback is Good for You It is curious how many technical expressions slip into the common language with a meaning entirely different from their true meaning – and often opposite. A couple of examples are “epicentre” and “lowest common denominator”.  People commonly use “epicentre” to mean the very heart of the centre.  The press…

October 18, 2018 Read more >

When is an employees’ share scheme not an employees’ share scheme? The answer is: when it’s an Inclusive Ownership Fund (IOF). Few would disagree that an engaged workforce delivers greater productivity or that offering shares to employees creates direct engagement with the financial and economic performance of the business. But proposals announced at the Labour…

September 27, 2018 Read more >

How will Remuneration Committees cope with their expanded remit? Changes to UK corporate governance guidance and disclosure regulations introduced this summer have expanded the remit of remuneration committees. The effects reach beyond quoted companies. We have designed a programme to help navigate through the added complexity. The UK Corporate Governance Code (UKCGC), applicable to companies…

September 27, 2018 Read more >

Commons Committee on the tail of the fat cats again The Commons Committee is chasing a myth again. Its chair, Rachel Reeves, has told the Mail on Sunday that the Committee is going to ramp up its attack on fat cats this autumn. She believes that executive pay is increasing at a rate that vastly…

September 27, 2018 Read more >

Governance landscape at a glance “the most eventful year in history” 2018 has been, probably, the most eventful year in UK history on remuneration governance. The year saw the culmination of the Government’s wide initiative on corporate governance reform, with a revised UK Corporate Governance Code published by the FRC in July and new corporate…

September 27, 2018 Read more >

SEC rescinds guidance providing regulatory support for using proxy advisors On Thursday 13th September, the SEC rescinded two guidance letters from 2004 in a move that will potentially reduce the influence that ISS has on, among other things, Say-on-Pay votes. These guidance letters informed investment managers that outsourcing their proxy voting decisions to proxy advisors…

September 17, 2018 Read more >

Investment Association register of AGM votes 2018 On 30 August the Investment Association published its analysis of voting in the 2018 AGM season. Company resolutions are added to the register if they fail to achieve an 80% vote in favour. The picture is rather confused. For all listed companies the number of resolutions not achieving…

August 30, 2018 Read more >

Pay Ratios Disclosure Regulations Which companies do the pay ratio requirements apply to? Quoted companies (not AIM companies) with >250 UK employees (average no. over the financial year). This includes all UK employees who have a contract of service with the company, regardless of hours worked, although it is the FTE pay figure that is…

August 29, 2018 Read more >

The Companies (Miscellaneous Reporting) Regulations 2018 On 11 June the Government put before Parliament a substantial and important statutory instrument, “The Companies (Miscellaneous Reporting) Regulations 2018” (2018  Regulations) which gives effect to a wide range of corporate governance reporting improvements that BEIS has been working on ever since its Corporate Governance Green Paper of 29…

July 16, 2018 Read more >