On 22 November 2018, the Investment Association (the IA) published an updated Principles of Remuneration (the Principles). In an accompanying letter to remuneration committee chairs, the IA outlines the key changes that have been made to the Principles and areas of focus for the coming year. The key changes are:

• malus and clawback: the Principles have been updated to be clearer on investors’ expectations of the enforcement processes companies should have in place to implement clawback and malus provisions;
• shareholding requirements and post-employment holding periods: the Principles have been updated to outline which shares can count towards the shareholding guidelines and the expectation of investors on post-employment holding periods;
• pensions: the UK Corporate Governance Code states that pension contribution rates should be aligned with those available to the workforce. IA members consider this to be the contribution rate given to the majority of the company’s workforce. Investors expect new executive directors and directors changing roles to be appointed on this pension contribution level;
• restricted shares: the Principles provide an update on investor expectations for those companies seeking to introduce a restricted share scheme; and
• leaver provisions: the Principles have been updated to reflect member expectations and current best practice.