Asset manager Fidelity celebrates more long-termism from FTSE firms, but European companies lag behind

William Turvill
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Some 65 FTSE 100 firms now have share retention periods of five years-plus, Fidelity found (Source: Getty)

Asset manager Fidelity International is celebrating a campaign milestone today as it releases data showing big UK firms are looking longer-term with their incentive schemes.

Some 65 FTSE 100 companies now have share retention periods of five years-plus in their long-term incentive plans (LTIPs).

This is up from four firms in January 2013, when Fidelity launched a campaign against short-term pay rewards.

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In order to win support from Fidelity, investee companies were required to extend holding periods for LTIPs to more than three years from 2014 and five years from 2015.

Four years into the campaign and 179 FTSE 350 companies now have LTIPs of more than five years, up from 118 this time last year, and six in 2013.

However, Fidelity has been disappointed by progress made in the rest of Europe. Looking at the continent’s top 64 companies, Fidelity found that 20 have holding periods of five years or more, level with 2016 and up from 12 in December 2012.

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“We have long argued that lengthening incentive schemes would change corporate behaviour for the better, reducing the temptation to maximise short term financial performance, and instead promote investment and growth,” said Fidelity’s chief investment officer Dominic Rossi.

“We now routinely vote against those with LTIPs of less than five years where we have the opportunity to vote on remuneration policies. Year to date, we have voted against 29 per cent of FTSE 350 remuneration policies and over 70 per cent of the remuneration policies in France, Germany and Switzerland where we have been offered a vote. We will continue to push forward as our experience in the UK shows that votes do matter and changes can be made.”

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