BusinessCompany NewsShareholders’ pensions clash looming

Shareholders' pensions clash looming

KPMG is predicting a new clash between institutional shareholders and company directors if plans for a new 'executive' pensions tax go ahead.

Link: KPMG employees warned over pension benefits

The government is planning to bring in a 60% tax on pension savings above £1.4m from 2005. KPMG is expecting the real tussle to be between institutional shareholders and company boards, because of the inevitable remuneration increases to compensate for the massive tax change. The new levy would tax contributions on pensions savings over £1.4m, which KMPG calculates will hurt executives earning more than £300,000 a year.

Unless companies compensate senior staff, many are expected to retire early to avoid the tax. Sean O’Hare, head of executive compensation for KPMG, said: ‘They’re going to have discussions with their employer to seek compensation. There are many ways of doing it. It could be salary, bonus plans or share options scheme.’

It means the pension disclosures and remuneration of top executives in the annual accounts will become even more of a flash point between company boards and institutional shareholders.

‘The issue is whether they will put something in for a select group of employees. I think shareholders will raise objections,’ said O’Hare.

The scheme will leave partners in accountancy firms unscathed because of their self-employed status.

Email James_Hester@vnu.co.uk

Related Articles

M&S business rate liabilities based on £570m rateable value

Company News M&S business rate liabilities based on £570m rateable value

4m Emma Smith, Managing Editor
BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

8m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

12m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

1y Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

1y Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

1y Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

1y Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

1y Emma Smith, Managing Editor