26/11/2013
Fidelity campaigns against short-termist corporate policies
The asset management group Fidelity has written to the boards of director of more than 400 businesses to alert them to its intention to vote against proposed management pay scales from the month of January 2014 if no changes are made, as an incentive to promote long-term vision, Investment Week reports. In a letter seen by the Sunday Times, the global CEO of Fidelity, Dominic Rossi, says that incentive programmes affecting directors are still far too complex and do not require directors to hold onto shares for a sufficiently long time. According to Fidelity, shares awarded to directors as part of bonus programmes should have to be held for at least three years. In the longer term, Fidelity, which is campaigning against short-termism, is militating for share awards to directors to be subject to a five-year lock-in clause. According to a survey carried out recently by Fidelity of practices on the FTSE 350 concerning remuneration, only 14 companies (compared with 6 in 2012) have incentive plans which extend for as much as five years. And 53 companies (compared with 25 previously) are in an intermediate position, with plans that run for 3 to 5 years.
