MPs to probe FTSE chiefs’ pay as top City investor demands reform

Sky News has learnt that the Business, Innovation and Skills (BIS) Select Committee will announce on Friday that it is to probe boardroom pay following a string of revolts this year by investors in companies such as BP and Smith & Nephew.

The MPs will publish the terms of reference of their inquiry on the same day that the City’s biggest institutional shareholder – Legal & General Investment Management (LGIM) – outlines its determination to secure sweeping changes in boardroom behaviour.

Sources said that LGIM wrote to all FTSE-350 chairs several days ago to highlight a series of changes to pay practices that it wants to see adopted in the coming months.They include a recommendation that remuneration committee chairs should have served on boards for at least a year prior to their appointment to the role; considering re-tendering remuneration consultancy contracts if more than 20% of investors oppose pay reports; and publishing the “pay ratio between the CEO’s total single figure and the median employee”, according to a copy of the guidelines seen by Sky News.

Source: MPs to probe FTSE chiefs’ pay as top City investor demands reform

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