How many UK companies seek to adopt U.S.-style executive remuneration — and how far they push traditional UK pay norms — is one of the biggest questions of the upcoming proxy season. The Investment Association recently updated its guidance to provide companies with more flexibility, particularly on bonus deferral and the use of non-performance-based equity awards, and the upcoming round of shareholder voting — and how companies respond to the results — will provide a clearer picture of the landscape going forward.
One sector to watch is the banks, many of which have abolished the EU-era bonus cap that previously limited executives’ incentive opportunity. HSBC Holdings plc, NatWest Group plc and Standard Chartered plc are all due to put forward their remuneration policies for shareholder approval in 2025, and based on initial conversations with various stakeholders, it would appear that a rebalancing of pay is coming.
While smaller, AIM-listed companies have historically been exempt from submitting their remuneration policy to a shareholder vote, the latest QCA Corporate Governance Code encourages them to do so. Although a transition period is still in effect, a growing number of companies have recently submitted their policy, and investors can expect more first-time policy votes this proxy season.
