05 September 2014
FTSE 100 companies are responding to the new disclosure regulation and voting regime, and are changing their board practices for the better, according to a Deloitte report.
Deloitte’s 2014 report on remuneration in FTSE 100 companies has found that more than three quarters of FTSE 100 companies have made changes to their remuneration arrangements in the past 12 months, to better align the interests of directors and shareholders by focusing more on the longer term, increasing the shareholding requirements for directors and introducing simpler remuneration structures.
Stephen Cahill, partner in the remuneration team at Deloitte, comments: ‘This year we have seen an unprecedented amount of change to remuneration structures, undoubtedly prompted by more dialogue between companies and their shareholders following the new requirements on disclosure and voting.’
Most companies received a high level of support for both the remuneration policy and the annual remuneration report. 79% of companies received more than 90% of votes in favour of the remuneration report, compared with 80% of companies last year.
Cahill adds: ‘Shareholders are taking a robust position where policies and practices are not considered to be in line with best practice.’
The report also found that 35 companies have implemented new long term incentive plans in the past 12 months, which is more than at any time in the last ten years.Additionally, there has been no change in the median potential bonus that may be paid in FTSE 100 companies generally but the median has decreased in the top 30 companies and actual bonus pay out amounts are continuing to decrease.