LAPFF COMMENTS ON REMUNERATION AT AVIVA, BAE SYSTEMS
(The following press release from the Local Authority Pension Fund Forum was received by e-mail. It was not confirmed by the sender.)
LAPFF continues push for remuneration reform
The Local Authority Pension Fund Forum (LAPFF) has recommended that its members oppose the remuneration reports of both Aviva and BAe Systems ahead of their AGMs dues to concerns about the scale of executive reward.
At BAe Systems, which has its AGM on 8th May, the Forum notes that Ian King, BAE’s chief executive, had combined remuneration valued at £4.18m for 2012 compared to a salary of £963,000. This includes bonuses, other emoluments, share option and long-term incentive plan gains as well as a pension increase. In future years, his total remuneration levels could be even higher due to awards granted under the share option plan equivalent to 300% of his salary in 2012.
Ahead of Aviva’s AGM on 9th May, LAPFF has highlighted both the remuneration of former chief executive Andrew Moss, and the potential for higher payouts in future. The Forum acknowledges changes that have been made by the company, but believes total remuneration could be higher in future as the bonus and long-term incentive plans allow a grant of five times salary at the maximum level.
The Forum’s policy is that companies should assess the quantum of total awards of pay packages in determining what would be considered ‘reasonable’ by shareholders and other stakeholders. In particular, the Forum considers all elements of remuneration should be taken into account in order that the actual amount granted is considered as a whole. This policy was set out in LAPFF’s recent ‘Expectations for Executive Pay’ document which was sent to all FTSE350 companies in March. Since Aviva and BAe Systems have breached this policy, LAPFF has recommended that its members oppose both remuneration reports.
Forum chairman Cllr Kieran Quinn said: “In our view, there has been perhaps too much emphasis in the recent past on the structure of pay, rather than scale. We think it is important that companies carefully consider how the overall scale of reward will be viewed. Where we consider the potential rewards available are too great, as with these two companies, we will advise our members to oppose.”
-END- For further information contact: Tessa Younger Engagement Services Manager PIRC Limited Research & Engagement Partner to the Local Authority Pension Fund Forum (LAPFF) Tel: +44 (0) 7507 844 561 TessaY@pirc.co.uk
Tom Powdrill Head of Communicactions PIRC Limited (LAPFF research and engagement partner) Tel: 020 7392 7887 Mobile: 07764 200896 TomP@pirc.co.uk