LEGAL and General Investment Management (LGIM), one of the biggest shareholders in the world, yesterday said it would withdraw support for generous share matching plans for company executives.
LGIM, which manages £383bn of money for large institutional investors, said remuneration committees should keep pay packages as simple as possible, with one headline pay figure in reports to improve transparency.
It also said it would try to eliminate abstention votes at company general meetings in an overhaul of its voting policy.
“We do not like matching plans anymore,” UK corporate governance manager Angeli Benham said yesterday. “Our new policy will set out that we do not support these matching rewards.”
Figures show the firm has voted against 77 UK remuneration resolutions so far this year and cast 12 votes against remuneration committee chairman at annual meetings. In 2011, it voted against 125 remuneration reports.
Since last June, the firm has also sought to minimise abstention from voting, driving down the number of abstain votes it makes to 0.1 per cent last year.
Corporate governance director Sacha Sadan said: “When the BSkyB vote happened, a lot of shareholders abstained, trying to be a protest vote. I can understand that point of view but you didn’t actually vote against, so you can’t count it as that.”
Sadan, who leads a corporate governance team at LGIM which has expanded from three to seven since 2010, predicted there would be less votes against pay resolutions next year due to more engagement from companies with shareholders.
“Hopefully we can do some pre-emptive strikes telling everyone in advance that performance matching – where you buy one share and get two free – doesn’t come on the table and make life a lot simpler,” he said. “It’s also transparency, making sure the remuneration is put as one number.”