At RLAM we recognise the important role of stewardship, whether in preserving or improving returns, or for urging boards to be proactive in managing and leading on ESG opportunities and risks. Amidst the reckoning of a global pandemic, we recognised the need to shift our stewardship efforts and concentrate on areas most pressurised by Covid-19. For 2020 this meant a greater emphasis on executive pay, both during company and engagement and when voting on behalf of our clients.
Engaging on pay Typically, RLAM targets six key themes when engaging with portfolio companies and issuers, reviewing the themes every two years to amend priority areas. Themes must address the most material risks to our investments, align with our company's culture and values, and be important to our clients. In 2019, after reviewing academic evidence on engagement, assessing external research, and consulting RLAM employees and clients, we selected the six key themes from a long list of potential priorities.
• Climate risk
• Financial and social inclusion
• Innovation technology and society
• Circular economy
With the onset of the Covid-19, governance, and more specifically remunerations, became the focal theme for engagement. Calls for the alignment of pay with the workforce and for improvements to other existing pay practices have been circulating for many years but really came to the fore in 2020 due to the pandemic.
About us: Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, managing assets on behalf of a wide range of clients. Our experienced team of investment specialists manages around £148 billion of assets (as at 31.12.2020), investing across all major asset classes. Our funds are aimed at meeting a broad range of investor needs.
Contact details: [email protected] and 0207 506 6500