New ABI Guidelines On Executive Pay Published

The Association of British Insurers ("ABI") has published updated guidelines on the structure of executive pay. The new "ABI Principles of Remuneration" are the first substantial update of the ABI guidelines since 2007. Although the guidelines are intended to be applied to companies listed on the Main Market of the London Stock Exchange, AIM companies will look to the guidelines as an indicator of best practice.

Many of the existing guidelines remain unchanged. This includes the 10% dilution limit on the use of newly issued shares for the purpose of employee share schemes and the 5% dilution on the limit of newly issued shares for executive (discretionary) schemes. However, the new guidelines omit the previous provision which allowed small companies to apply a 10% limit to discretionary schemes within certain levels. Many companies which consider themselves to be "small" even though they may not meet the strict test in the guidelines have, in the past, relied on