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Company examples and trends in key areas of remuneration policy in FTSE 100, mid-250 and SmallCap companies - March 2023


Spring is the busiest time of the year in terms of annual reporting. The UK banks often emerge first and these reports give us an insight into how policy might be shaped in the coming year.

More broadly, we focus on 57 new companies that have either been added to the database or have published remuneration reports in the last few days. What we found was very similar to previous periods but a notable feature of the latest disclosures is the amount of attention dedicated to measures to support staff both in terms of pay and well-being initiatives.

Previously, we reported that the most pressing concern expressed by companies was retention and while many of the latest measures are a reaction to economic and cost pressures, they may also serve to ease any recruitment and retention concerns.

Despite this, it should be noted that in almost all cases the support has been targeted at the most junior staff so will probably not mitigate any concerns regarding the retention of more senior staff.

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Analysis of latest December 2022 banking reports

The latest annual reports from five of the UK’s largest banks are among the first that have December 2022 year-ends to be published so we have taken an in-depth look at what they contained. Some of the information that emerged that we collect foe our executive remuneration database included:

  • Most mentioned that they are currently considering the effect of proposed changes to the ratio of fixed to variable pay that could come into force in 2024;

  • Pay rises for staff tended to be historically large and focused on junior employees and areas with exceptionally high inflation;

  • Most of the banks provided special one-off payments to staff to support them during the current tough economic environment;

  • Many highlighted existing, extended and new well-being initiatives they operate and notable levels of ESG performance metric usage;

  • Bonus pools were higher in three of the banks and lower in the other two;

  • The latest vested LTIPs were granted at the depth of the pandemic but all the banks stated that no “windfall” gains were made.

  • In most of the banks, the majority of the vested amounts resulted from non-financial target achievement;

  • In terms of other changes, Lloyds and NatWest plan to increase bonus maxima to some or all directors;

  • Lloyds plans to move away from its restricted share plan back to a traditional LTIP in 2024 with a cap of 300% of salary.

Key findings

Are all remuneration structures the same?

There were significant differences across the FTSE 100, mid-250, SmallCap and AIM indices. A number of general findings emerged within the spectrum of practice:

  • Variable remuneration dominated potential earnings in all four indices
  • Most firms tend to favour long- over short-term incentives
  • As companies get larger, there is a greater level of leverage within remuneration structures with the proportion of incentives contained in FTSE 100 firms

Movements and magnitude of pay ratios
  • CEO pay ratios have increased over the last 18 months
  • By splitting reports into those that were published in 2022 and those with year-ends in 2021, the pay ratios were higher in the most recent year
  • Pay ratios were higher in the latest year than the previous one in both the 2021 and 2022 reports but the improvements were greater in the earlier year
  • There was some variation by FTSE index, with all the median and average pay
    ratios improving in the 2021 reports
Staff pay rises, well-being and special payments

An examination of the latest staff pay rises shows they are historically high and tend to be greater than those made to more senior staff. Many of the firms covered said that they have targeted pay awards towards junior staff that require the most help.

Many of the companies featured in this report also published details of the well-being initiatives they had either introduced or extended to provide support to their employees.

ESG developments

The trend of new and developing ESG performance measures continues and we have outlined all the latest examples disclosed. One noticeable trend is that companies are refining their approaches and introducing new measures such as food and waste reduction.

Each time we produce a report of this type there are usually a number of examples that warrant further attention. On this occasion, a few examples stood out including:

  • A new one-off revenue-growth incentive plan at Abcam with large potential rewards for its CEO and finance director;
  • Multimedia company Future has decided it wants to travel in the opposite direction moving away from a value plan back to a traditional LTIP but not until the prior plan has run its course;
  • Mitchells and Butler missed its LTIP underpin but its committee argued that this was due to reasons out of its directors’ control so it plans to extend the condition;
  • The pub company also made changes to its in-flight bonus targets but at the same time reducing the potential reward available;
  • Travel company On the Beach introduced a new restricted share plan due to the volatile environment.
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Case studies

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.

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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.

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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

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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

Read more

Knowledge Hub

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2023 CEO Value Index and Shareholder Voting

By ranking CEO’s ‘value for money’, and then looking at shareholder voting patterns, we wanted to find out whether shareholders simply focus on how much CEOs are paid, or whether they focus on the value delivered.

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