Our response to the FRC on their consultation document on Directors' remuneration.
Financial Reporting Council
London WC2B 4HN
5th December, 2013
Dear Ms Woods,
Investor Relations Society response to the Directors’ Remuneration Consultation
Thank you for giving us the opportunity to take part in the above consultation. I am pleased to enclose The Investor Relations Society’s response.
The Investor Relations Society’s mission is to promote best practice in investor relations; to support the professional development of its members; to represent their views to regulatory bodies, the investment community and government; and to act as a forum for issuers and the investment community. The Investor Relations Society represents members working for public companies and consultancies to assist them in the development of effective two way communication with the markets and to create a level playing field for all investors. It has over 670 members drawn both from the UK and overseas, including the majority of the FTSE 100 and much of the FTSE 250.
Following an annual survey of our members earlier this year, the majority of respondents felt that investor engagement was improving at all management levels. Furthermore we have found that remuneration continues to be a significant part of the conversation between IR teams and their investors; 59% of respondents indicated remuneration was one of the main topics of discussion in meetings.
We address all three areas from your proposals in our submission below, and our key points from our response can be summarised as follows:
• In principle, we think extending clawback provisions across larger companies and sectors is not practical nor desirable
• Deterring the appointment of executives to more than one committee could inhibit the talent of NEDs, reduce the spread of expertise and impact those smaller companies with smaller boards
• Setting criteria for companies to report when they fail to gain a majority in support of a resolution on remuneration is unhelpful and unnecessary
We hope you find these comments useful and please do not hesitate to contact me if you have any further questions.
Chair of The Investor Relations Society’s Policy Committee
020 7379 5151 / firstname.lastname@example.org
Published 5 December, 2013
Directors' remuneration IR Society Response