Pirc rejects all ‘flawed’ incentives

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A SHAREHOLDER advisory group plans to take the “radical” step of opposing all long-term incentive plans (LTIPs) introduced during 2013.

Pensions & Investments Research Consultants (Pirc), which advises fund managers and pension funds that together control more than £1.5 trillion of assets, branded LTIPs for directors as “fundamentally flawed”.

The move is part of Pirc’s “tougher approach on remuneration issues” in its latest shareholder voting guidelines.

Alan MacDougall, managing director of PIRC, said: “Our conclusion regarding LTIPs is simple: they are not long term and they do not incentivise.

“They are also ineffective due to amendments and manipulation by remuneration committees. We believe superficial reform, trying to redesign the same flawed model, is not good enough.

“So we’re taking the radical step of opposing all new LTIPs.”