The IA updated Principles of Remuneration for 2023

On 9th November 2022, The Investment Association (IA) published its updated Principles of Remuneration for the 2023 AGM season, together with a letter to Remuneration Committee Chairs that sets out expectations for them. Key elements of this include:

·         Show restraint when considering 2022 pay outcomes and setting remuneration for 2023. Consider granting pay awards for executives below the level given to all employees.

·         2023 will be a Remuneration Policy review year for many companies and there is an expectation for restraint on any increases to incentive opportunity levels.

·         Consideration to be given to any windfall gains that may arise from 2020 Long Term Incentive Grants.

·         Many IA members expect companies to incorporate material ESG risks and opportunities into executive pay arrangements.

·         The Principles continue to encourage NEDs to own shares.

Companies that don’t have executive pension contribution levels aligned with the wider workforce should expect an automatic Red Top from IVIS.