UK: Remuneration Principles for Building and Reinforcing Long-Term Business Success

Hermes EOS, the National Association of Pension Funds, BT Pension Scheme, RPMI Railpen Investments and USS Investment Management, have published guidance for boards titled Remuneration Principles for Building and Reinforcing Long-Term Business Success: see here (pdf). The guidance contains four high-level principles:

1. Management should make a material long-term investment in shares of the businesses they manage.
2. Pay should be aligned to long-term success and the desired corporate culture throughout the organisation.
3. Pay schemes should be simple, understandable for both investors and executives, and ensure that rewards reflect long-term returns to shareholders.
4. Remuneration committees should fully explain and justify how their decisions operate to deliver long-term business success.