Clifford Chance

Investment Bodies and Proxy Advisers: Covid-19 Guidance on Executive Pay

19 February 2021

Proxy advisers and other investment bodies have been particularly focused on the impact of Covid-19 on executive pay during the pandemic. They have given guidance on their expectations on pay decisions and are increasing their focus on effective disclosure and exercise of Remuneration Committee (RemCo) discretion.

Advisers’ statements acknowledge the significant challenges that boards are currently facing and the need for RemCos to carefully balance incentivising senior executives at a time where management is being asked to demonstrate increased strength and leadership. RemCos are also being reminded that executives should not be insulated from the impact of Covid-19 and that broader stakeholder interests, including those of shareholders, the workforce and society more broadly, should be taken into account in making decisions on pay.

This Guide sets out the pay-related key expectations of three of the main investor voices, the Investment Association (IA), Institutional Shareholder Services (ISS) and Glass Lewis (GL).

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