NAPF warns banks against bonus culture
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The National Association of Pension Funds has warned the biggest financial institutions to keep control of pay or risk shareholder revolts.
According to the Times, the NAPF has written to all FTSE 350 chiefs to warn them that bonuses and excessive pay must be controlled in the interests of shareholders.
The letter sent by NAPF chief executive Joanne Segars and head of corporate governance David Paterson, which has been seen by the Times says: “Pay increases ought to be earned, as is the case for most of the rest of us. There is also the question of ensuring a recognition that bonuses are essentially a share of the profits.
“If profits are down, bonuses should be down,” it says.
The fund association warned bosses that any remuneration should be geared to long-term shareholder profit and minimum risk.
The letter also says the NAPF is hoping to create guidelines on the issue of remuneration that funds could use when deciding which way to vote.
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