Veon Limited
VEON Ltd. is a Dutch-domiciled Nasdaq-listed multinational telecommunication services company. It predominantly operates services in the regions of Asia, Africa and Europe.
Overview
Autumn is one of the quieter times of the year in terms of annual reporting but there were still a number of prominent companies publishing their remuneration statements in the latest period.
This time, 35 new companies were added to the database and while it might be unwise to make wider generalisations from a relatively small number of company reports, many of the developments observed seem likely to continue into next year.
This is because many of the trends detected are being driven by both the current economic turmoil and the corporate governance environment and neither is likely to change anytime soon. In addition, most of the latest developments also represent continuations or refinements of previous ones we have reported on and are part of longer-term shifts in policy.
In-depth look at developments
With the ongoing cost-of-living pressures facing everyone in the country it is perhaps unsurprising that in the latest period there were more details on how companies were helping their employees weather the current storm.
Many firms have put in place initiatives to support their employees which fell into five main categories:
- One-off payments.
- Wellbeing initiatives.
- Living or minimum wage-related increases.
- Benefits enhancements.
- Enhanced salary rises.
Pensions aligning at different levels
The alignment of directors’ and staff pension levels is nothing new with the trend having continued
for the last few years. As we reach the end of December 2022, the pension levels for directors in
most companies will be equal to those of the majority of their staff with just a few exceptions. Now
that we are reaching the endpoint of the alignment process, it is clear that staff rates (and therefore
the newly-aligned director rates) exhibit quite a high degree of variation across companies.
For example, some directors’ pensions are now as low as 3% of salary, as at Rank while, on the other hand, rates at other firms can be over four times higher as at Diageo where the rate is 14%. As a result, by focusing on internal alignment, investor guidance implies external misalignment.
Whether or not these differentials are likely to pose problems in the future remains to be seen but given that directors themselves often keep a keen eye on what their peers are earning, possible unforeseen consequences could emerge.
ESG developments
Over the last few years, ESG measures have become more and more prominent within UK
remuneration policies so the E-reward database has evolved to keep pace with the changes.
Currently, we record 24 different performance measure categories and the list of ESG targets
includes:
-
Safety-related
-
Customer-related
-
Employee-related
Other ESG targets (environment, climate, diversity, culture etc).
It is this last category where most of the growth has come from in the last few years.
One question that remuneration committees seem to be asking themselves in relation to this area is how to incorporate such targets. Some companies believe progress is likely to be quicker if they are included in their annual bonus plans while others believe the long-term nature of many ESG targets means it is more appropriate that they are part of longer-term incentive plans.
Of course, there are arguments in favour of both these viewpoints which is why some organisations use ESG metrics in both their long- and short-term incentive plans. By contrast, some companies are yet to include ESG performance measures within their incentive arrangements although often they mention that it is an area that they are considering.
Case studies
Martin Baker Aircraft
Martin Baker make the ejection seats for installation in many of the world’s air forces globally. They remain an ‘old fashioned’ family-owned engineering company despite being the world leader in their field.
Trufin plc
London Team were selected to act as ‘neutral independent advisors’ on the divestment of assets by a major Fund Management Partnership to form a new company: ‘Newco’, eventually TruFin plc, the listed fintech business
Hawk-eye Innovations
A private company with unique sports technology IP, developed in the UK. The IP had wide applications globally, and huge growth potential. The company was acquired by a world-scale corporation
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