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Updated 2020 Glass Lewis UK Proxy Voting Guidelines

Glass Lewis has released a formal update to its UK Proxy Voting Guidelines for 2020. On the whole, there is little that has changed compared to last year, although a few noteworthy additions in relation to executive remuneration are summarised below. These include updated guidance on salary increases, pension, threshold vesting under LTI plans, incentive plan limits, post-exit shareholding guidelines, and Remuneration Committee discretion: Salary increases

Glass Lewis expects any proposed salary increase to be justified and appropriate when compared to increases awarded to the wider workforce. The rationale for exceptional increases should be fully disclosed. This aligns with the provisions of the Investment Association’s Principles of Remuneration .


Glass Lewis expects pension provisions for executive directors to be in line with those available to the majority of the wider workforce, in line with provision 38 of the revised UK Corporate Governance Code. However, Glass Lewis recognises that pension rates for incumbents may need to be reduced over time.


Where a company suffers an exceptional negative event, Glass Lewis will expect the Remuneration Committee to consider exercising downward discretion, even if formulaic performance targets are met, e.g. reducing an annual bonus payout and/or the size of an LTI grant following a significant decline in share price.

Threshold vesting under long-term incentive plans

Glass Lewis specifies a view that long-term incentives should vest at no more than 25% of maximum for threshold performance (and for no payout for below-median performance unless fully justified by compelling rationale).

Incentive plan limits

Glass Lewis expects companies to set clear and transparent limits to incentive awards expressed as a multiple of salary.

Post-employment shareholdings

In line with the 2018 UK Corporate Governance Code, Glass Lewis expects companies to introduce post-employment shareholding guidelines at the next Remuneration Policy update. However, Glass Lewis does not appear prescriptive on the design of this requirement in terms of the level or timeframe (unlike the Investment Association).

Moreover, Glass Lewis expects restricted share plans to be accompanied by meaningful shareholder requirements, including for a period post-exit of at least two years.

Mercer | Kepler commentary and next steps

Many of the proposed revisions in the guidance from Glass Lewis reflect recent developments in the UK’s remuneration governance landscape generally, and some of the Investment Association’s Principles in particular. Companies will likely welcome this clarity from Glass Lewis, and also the flexibility afforded by a principled – rather than prescriptive – tone.

This briefing is for general guidance and does not necessarily cover all areas of the topics included in this briefing. It is not designed to give legal or other professional advice.

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