Voting Guidelines 2017
Following on from the publication of our latest Stewardship Report[1] we have now published our Voting Guidelines. We think by disclosing how we consider and decide to vote on the proposed resolutions of our investee companies we give our clients a better understanding of how we vote on their behalf.
One of the key points is how we tackle excessive remuneration of executives. In our 2016 Stewardship Report we wrote of the difficulties in arriving at a solid definition of what is the “tipping point”. We have decided that the use of pay ratios is a good way to decide what is an egregious pay packet. Where executive base salary is in excess of between 30-35 times the UK median salary and/or 60-65 times that of the lowest paid employee, executive pay should be deemed excessive and we will vote against the remuneration report. We will use our discretion where remuneration falls between the upper and lower limit but will enforce the lower multiple where the company in question is not a real living wage employer. By this we mean the independently-calculated wage based on what people need to get by. This is different from the national living wage because it is not just a government minimum[2]. The Living Wage campaign encourages employers to ensure their employees earn a wage that meets the costs of living and the High Pay Centre have reported on the exponential growth of pay at the top and the detrimental effect this has on investors and society as a whole[3]. We feel that considering both of these factors when looking at remuneration reports brings these two narratives together to challenge inequality.
We hope that publishing the guidelines we adhere to when voting indicates our commitment to being good stewards of client assets. We intend to regularly revisit these guidelines to ensure that they continue to reflect client views. You can view the guidelines here.
by Kate Hewitt
References
[1] http://www.castlefield.com/media/1736/stewardship-report-2016.pdf
[2] http://www.livingwage.org.uk/what-is-the-living-wage
[3] http://highpaycentre.org/files/HPC_42_WEB_amend_- Restoring_Responsible