ABI updates guidelines on executive remuneration

The Associate of British Insurers (ABI) has published the annual update of its guidelines on designing and operating executive director remuneration.

The 2013 version of its Principles of remuneration are intended to apply for 2014 annual general meetings and annual reports.

The updated version includes:

  • Performance adjustment/malus and clawback: The update provides a clearer definition of performance adjustment and clawback, and asks remuneration committees to disclose the circumstances in which performance adjustment or clawback could be used.
  • Executive shareholdings: This has been updated to clarify which shares would qualify as meeting the guideline. 
  • Performance-on-grant schemes: The update provides the conditions shareholders expect these schemes to meet, such as genuinely long holding periods, significant shareholding requirements, lower overall amounts and the disclosure of targets or performance achieved. 
  • The new reporting and voting regime: ABI includes its view on various practical aspects of the new reporting arrangements, which came in from October 2013.

Robert Hingley, director of investment affairs at the ABI, said: The ABI’s Principles of remuneration are reviewed annually.

Last year, we made significant revisions to the content and structure of the guidance. Given this, we have made only minor amendments and clarifications in 2013.

“With the introduction of the reporting regulations and voting legislation, the coming year will see significant changes in the way companies report, and shareholders vote, on pay.”