BOC executive remuneration plan under fire

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The BOC’s annual meeting is pencilled in for next week, and The Financial Times (FT) reports that shareholder activist group Pirc, a group advising several local pension funds, has been very vocal in its criticism of the BOC’s new management incentive plans ahead of the meeting.

Pirc expressed particular concern over BOC’s moves to increase the maximum award within its long-term incentive plan to two-and-a-half times a director’s salary. Pirc also claimed that the group’s 3% growth target above inflation was not challenging enough given stock market predictions.

Although not as critical as Pirc, at least one other shareholder advisor has also raised their concerns on the matter.

The FT quoted the Association of British Insurers, whose membership represents 20% of managed funds in the UK, as saying that shareholders ‘will need to consider carefully whether the proposed changes to remuneration are correctly balanced’ and question ‘whether the performance targets are significantly challenging’.

BOC, meanwhile, told the FT it was disappointed with the Pirc recommendation because it had been compared with much smaller rival UK chemicals companies. BOC added that its growth target was in addition to growth in the retail price index and above the industry average.