PIRC UK Shareholder Voting Guidelines 2014

The Pensions Investment Research Consultants ("PIRC") has published the 18th edition of its UK Shareholder Voting Guidelines, replacing the version published in February 2013. The guidelines contain a number of significant revisions in light of recent regulatory developments, including several revisions to the area of directors' remuneration.

Key changes in the most recent edition include:

• advice to shareholders on the new binding vote on remuneration policy;
• new recommendations and guidelines in relation to the disclosures required in the directors' remuneration report;
• revised guidelines on the balance between executive pay and financial performance of the company. In formulating its assessment PIRC will compare the percentage change in CEO pay over the last five year period against the percentage change in total shareholder return. PIRC will also apply a threshold of 200 per cent. of salary in informing its view of whether variable pay is excessive;