FTSE 100 executive pensions cut after pressure

Executive pension contributions are being pushed into line with those of the workforce following calls from shareholders as an issue of fairness and to foster good employee relations.

The Investment Association (IA) data on the 2020 AGM season shows that 98per cent of FTSE 100 companies have now either aligned the pension contributions of new directors with that of the workforce or committed to doing so and 14 FTSE 100 companies reduced pension contributions for existing directors during the year.

Ten FTSE 100 companies were, however, issued a red-top by the IA’s Institutional Voting Information Service (IVIS) service for having at least one existing director receiving a pension contribution of 25 per cent or more with no commitment to align this with the rest of the workforce by the end of 2022. A further two companies were issued a red-top for not committing to align the pension contributions of new directors with that of the workforce.

Chris Cummings, CEO of the Investment Association, said: “Providing directors with the same pension contributions as the rest of the workforce is fundamentally an issue of fairness. Both companies and shareholders have risen to the challenge of this unprecedented AGM season to ensure robust and effective governance of the UK’s largest companies. Shareholders have continued to hold companies to account on the executive pay and director re-election, while recognising the additional pressure companies have been under.”

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