The ABI today launched a new and simplified version of its remuneration guidelines.  The new format is based on five key principles and provides greater clarity, while still containing the technical guidance that specialists require. 

Peter Montagnon, the ABI’s Director of Investment Affairs, said:

“Over the years the guidelines have become too focused on the needs of specialist consultants and advisers.  We have chosen the new format to give them broader reach.  In particular, we hope they will help Boards understand how shareholders feel remuneration can be more effectively aligned to performance”.

Key updates include:

• the introduction of an invitation to remuneration committees to consider performance periods of longer than three years for share-based incentive schemes
• an extension of the guidance to include option grants or awards of shares in subsidiary companies
• encouragement to remuneration committees to review pensions arrangements that may give rise to large payments on severance.

Peter Montagnon commented:

“As before, the ABI urges remuneration committees to keep increases in overall remuneration in line with improvements in performance.  We are particularly concerned about any increase in bonuses made to compensate for the failure of share incentive schemes to pay out.  We rely on remuneration committees to maintain a close watch on the link between remuneration and performance and we urge them to do so”.

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Notes

1.            The ABI remuneration guidelines can be found at www.ivis.co.uk

2.            Enquiries to:       

         Lucy Butler        020 7216 7411 (Mobile: 07712 841 184)

         Alan Leaman    020 7216 7440 (Mobile: 07957 482 330)

         Malcolm Tarling    020 7216 7410 (Mobile: 07776 147 667)

         Jonathan French   020 7216 7392 (Mobile: 07958 330 480)

         Kelly Ostler        020 7216 7415 (Mobile: 07968 364 302)      

3.            The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

4.            An ISDN line is available for broadcasts.        

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