Changes announced in the Budget to the rules for entrepreneurs’ relief and their impact on employee incentives Entrepreneurs’ relief reduces the rate of capital gains tax from 20% to 10% on the first £10 million of an individual’s qualifying lifetime gains. It is available on the disposal of shares in a trading company (or shares…

October 30, 2018 Read more >

Are chief executives overpaid? In October 2018, Deborah Hargreaves published a new book, under the title “Are Chief Executives Overpaid?”. The question, of course, is rhetorical. Hargreaves is an ex Guardian business editor and FT journalist who has made it her life’s work to attack fat cat pay, which she believes is having a corrosive…

October 24, 2018 Read more >

Irish salaries beat UK salaries MM&K recently compared data from the Willis Towers Watson cross industry databases to find out how salaries compare between Ireland and the UK. The chart below compares UK and Irish employees’ salaries to their ‘Global Grade’ (the Willis Towers Watson Global Grading system assigns a job size to employees’ roles).…

October 24, 2018 Read more >

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 >