UK - The NAPF has launched an executive share scheme assessment kit to give pension schemes and directors guidance on firms' processes of remuneration.
The kit provides a multiple choice questionnaire which can be used by directors to check that their remuneration scheme will pass muster with institutional shareholders.
Initially the kit was designed for use by the NAPF voting services, in deciding on voting recommendations to its members. But the service has been made available to directors in the hope that it will encourage good practice.
NAPF director of voting issues services John Rogers said: “We are trying to empower nonexecutive directors to be able to challenge remuneration proposals put to them.
“What has happened on occasions is that either the nonexecutive directors haven’t really understood the various aspects of the scheme or they may have been told by remuneration consultants that this worked fine for other companies. They may not really have thought about whether the proposals fit in with achieving corporate strategy.”
Alongside the assessment kit will be a shorter checklist of questions that remuneration committee members can use as a quick test to the suitability of any remuneration plan.
The NAPF’s action follows government efforts to make executive remuneration more transparent. The ABI has issued guidance on the principles that should be adopted by its members with the principles endorsed completely by the NAPF.
The NAPF said that the kit is backed by large remuneration consultants, companies and institutional investors and is being constantly updated to provide a more accurate voting tool.
NAPF voting services currently makes recommendations to its members for all resolutions of every annual general meeting for the top 400 companies in the UK.
The assessment kit is available on www.napf.co.uk
By Jonathan Stapleton
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