TPC-Deferred Shares Study Full Report final - web version

As a point of disclosure, the Remuneration Committee Chair of Weir is on the Steering Committee of The Purposeful Company and is one of the authors of the report. [...] Remuneration Committee chairs seeking to drive reform need to take the time fully to understand the evidence, issues, and trade-offs to be in the position to convince investors about the quality of their stewardship of the Committee’s decisions. [...] 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 aim of this analysis has not been to provide firm ‘answers’ but simply to show that a range of options can be used to achieve the desired objectives in terms of pay variability, and the fear of loss of such variability should not be used as a reason for retaining the traditional LTIP model over restricted shares. [...] 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.