Executive pay and clarity around incentive plans are the most important issues for investors attending AGMs this year

 
William Turvill
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Seven in 10 investors would systematically vote against incentive plans when specific and quantifiable performance criteria are not disclosed (Source: Getty)

Sir Martin Sorrell and Tidjane Thia, watch out: executive remuneration is the top priority for investors attending AGMs this year - and there has been an increase in those willing to vote against incentive plans.

Some 70 per cent of institutional investors surveyed by Capita Asset Services said they would systematically vote against incentive plans when specific and quantifiable performance criteria are not disclosed.

This is up from 50 per cent when the same survey was carried out by Capita in 2014.

Read more: How long would it take you to earn Sir Martin Sorrell's £70m?

The investors quizzed by Capita represented more than $5 trillion in assets under management.

Six in 10 of the investors said they would vote against the remuneration report if retrospective performance criteria were not disclosed for bonus payments.

Board composition was found to be the second most important issue, with director independence, experience and qualification levels all significant.

Read more: Former Prudential boss Tidjane Thiam earned £1m a month in 2015

Justin Cooper, chief executive of Capita Shareholder Solutions, said: “The results unsurprisingly show that remuneration is the top priority of investors for 2016, with other areas of focus being board compositions and capital increases.

“Knowing what is at the forefront of investors’ minds will help companies ensure they are addressing the key issues and help them understand the motivations behind voting outcomes.”

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