TPC- Deferred Shares Study Key Findings Report Final - web version

It can be found here: 2 The state of the market The debate on alternatives to LTIPs continues to be active, not just in the UK • Since the Report of the Investment Association Executive Remuneration Working Group in 2016, a number of investors have publicly advocated a simpler approach to LTIPs. [...] o In the event of an AGAINST recommendation on a deferred share proposal, or on the implementation of a previously approved policy, the proxy adviser should offer a ‘review of learnings’ meeting after the AGM season to enable mutual understanding with the issuer. [...] • Insufficient variability may create issues on the downside, in terms of the risk of payment for mediocrity, and on the upside, in terms of lack of attractiveness to executives and incentive for exceptional performance. [...] The academic research tends to point towards simple packages consisting of cash and shares as being optimal, and so the question may be as much one of the package mix between cash and shares as the design of the incentive components. [...] The Purposeful Company was established in 2015 with the support of the Bank of England to identify changes to policy and practice to help transform British business with purposeful companies committed to creating long term value through serving the needs of society.