LGIM dismisses the allegations at a high rate after finding that many were being ignored

Legal and General Investment Management, the UK’s largest asset manager, will suspend almost all direct responses to companies at their highest pay, having found that its responses have not been largely ignored.

The £ 1.33tn Asset Manager reported a system change in his annual letter to chairpersons of pay committees, which is in the process of sending to all 600 or more companies in the FTSE All-Share index.

“Most companies do not take action on the pay we provide,” Angeli Benham, ESG’s global chief executive at LGIM, said in an interview. “For example, they write to us to increase the boss’s bonus from 150 percent pay to 200 percent pay. Our comment is that LGIM may not agree with this, but it still does. ”

He added: “We are often in need of those who have a strong opinion on the growth of the bonus, because we do not support them. Companies tend to do what is right for managers rather than for ourselves.”

For the past decade, LGIM has responded to companies that consult with asset managers on changes that have been made to senior pay. However, he found that about 80 percent of the changes that have been made, “the answers have already been written in our detailed and comprehensive policy document,” Benham said.

From now on, LGIM will lead pay-per-view discussions to its policy statement, and address issues that appear to be exceptional, such as in the use of discretion or when the policy is unfamiliar or not specified in the policy statement.

“While we still consider it important to comment on companies’ changes in their pay structure. . . Our time is spent in educating the market on issues such as financial inequality and climate change, “said Benham.

LGIM voted against 37.5 per cent of new payments in the UK in 2020 and earlier this year it said it would take even a solid line on payment in 2021, due to the epidemic. In particular it looks to ensure that companies that took development funds or cut shares did not pay bonuses.

Earlier this year, it voted against pay and bonuses at Cineworld, Hollywood Bowl and Future, publishers of the magazine. The votes for the 2021 asset manager on pay have not been published.

The letter to the chairpersons of the remuneration committee also encouraged companies to offer free shares to all employees, to encourage them and to allow them to participate in a successful venture.

Schroders, a £ 717bn asset manager, has introduced a plan to give its employees about 5,500 5 percent of their salary in dividends.

Schroders CEO Peter Harrison told the Financial Times: “We want to build a deeper partnership and be one with everyone.” The move is “well received” internally, he said.

LGIM is currently asking all companies to pay their employees a fair wage, which is £ 9.50 per hour nationwide and £ 10.75 in London.

“We want them to focus more on their employees than on their supervisors,” said Karoline Herms, ESG’s global executive director at LGIM. “Many workers have to struggle to make ends meet, arguing between putting food on the table and burning down their homes. This can have a lasting effect on their health and productivity. ”