The new tool, to be launched today and understood to be the first of its kind, is hoped to make schemes more transparent and deter companies from adopting excessive pay schemes.
Alan MacDougall, managing director of Pirc, told the FT: ‘By confronting them with an outside assessment, investors can undermine their [the companies’] simplistic justifications.
The service will only apply to new share incentive schemes and is made up of a two-letter rating. Under the new service, a new scheme would only be supported if it had a rating of not less than AB. If it came out with a C rating, Pirc would advise its clients to oppose the scheme.
The goal of the Pensions & Investment Research Consultants is to re-establish the balance between directors’ required performance and their potential reward.
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