So just a few weeks ago before the World Cup started, the news was not about the football scores or who was playing well or potential upsets. The news was all about the wider context of the World Cup being held in Qatar. Football commentators like Gary Lineker were being questioned about their views on the tournament being held in a country not known for its footballing history and potentially dubious record on human rights. Rightly, much focus was put on the fate of migrant workers building the stadiums and how gay supporters might be treated in a country where homosexuality is illegal.
However-- and I am as guilty of this as anyone-- now that the football has started, the focus has been on the games themselves. We've got really brought in to the detail-- will Harry Kane's ankle injury impact his ability to play, the surprise upset of Saudi Arabia beating Argentina, and working out who might qualify to the knockout stages. It doesn't want me to move on from the football.
As with the World Cup, the same is true for executive compensation in 2023. So it'll be really important that the details of executive pay don't obscure the wider context. We know that half of the FTSE 100 are expected to table a new policy for approval next year, and it will be really important that executive pay is considered against the background and the wider context. So we know the war in Ukraine is having an impact on energy prices.
We heard Robert Peston talking about inflation and the cost-of-living crisis, and we know that there's also a continued climate emergency. UK households are continuing to feel the effects of a 30% increase in their energy bills. They might be cutting back because of the impact of inflation on mortgages, their rents, and food prices. And this is all against a backdrop of the contraction of the UK economy.
The UK also remains at the forefront of the climate debate, and further progress was made at COP 27 in terms of carbon emissions. And those of us based in London-- and I don't know if this has affected anyone today, but you may have been directly aware of the climate activists associated with Just Stop Oil who kicked off a two-week campaign around London yesterday with protests stopping traffic in Shepherd's Bush and Aldwych.
So for companies considering changes to remuneration policy and executive pay, it will be really important not to forget about all of that context when they're thinking about the detail of the different components of executive pay. So I thought I would talk to you about some of the questions we're hearing from our clients across some of the detail and then thinking about it against that context.
So one of those questions is whether companies should adjust executive pay to reflect the inflationary workforce pay increases. So in recent years, proxy agency and investor expectations have been that executive director salary increases are aligned with those offered to the wider workforce. However, as you just heard in the last section, current inflation levels in the UK and median wider workforce salary increases are forecast to hit 5%. And therefore, there's going to be a growing debate about whether this alignment should continue.
It's worth keeping in mind that because executive salaries flow through to other pay elements, such as bonus, long-term incentives, any inflationary increase has a much greater impact on total comp than for other employees. Both the investment association and ISS have raised this point in their recent updates, and they've been encouraging remuneration committees to consider salary increases for executives below the rate given to all employees.
Now, I don't want to go too far away from the football, so our footballing comparison here is to the salaries received by FIFA executives. Infantino may feel like a migrant worker, but his multi-million-pound salary sets him apart from the migrant workers building the stadiums on their 45 p an hour, 10 pounds a day.
Another question we've been receiving is about the latest shareholder reaction on ESG. We've seen a rapid increase in the prevalence of ESG metrics and executive incentive plans over recent years. In principle, this has been positively received by most proxy agencies and investors. However, just as Qatar hosting the World Cup has been accused of sportswashing, or giving Qatar the veneer of respectability from hosting an international sporting tournament to allow potential business associates to overlook its practices that don't necessarily align with Western values, so investors are increasingly wary of greenwashing or companies implementing ESG metrics simply as a tick box exercise.
Investors are also linking ESG remuneration disclosures with the global energy crisis, and companies should be mindful about whether they can explain any recent events and the impact they have had on their net-zero strategies. The energy and cost-of-living crisis is also raising questions as to whether or not changes should be made to in-flight awards. So this would be where economic conditions mean that financial targets set for outstanding LTI awards are unlikely to be achievable in the current climate.
In our experience, changes to in-flight awards are generally viewed very negatively by investors apart from in specific circumstances like M&A or a change of accounting standards. There is also the question of the wider optics of adjusting executive awards upwards where the broader workforce is under considerable financial pressure. Investors take a similar view of any windfall gains, and that hasn't changed in terms of their view from the pandemic with the low share price grants and where those may be vesting in the next couple of years.
So our image from the World Cup for windfall gains and changes to performance conditions to make things easier to satisfy is David Beckham as our Qatari ambassador. So his involvement is potentially out of step with his earlier image as a gay icon, and he's been accused here of putting money before his principles.
So my final comparison to the World Cup-- and you may feel I've shoehorned some of these in, but it's important to keep with a theme. So my final comparison between the World Cup and executive compensation for next year is between Gareth Southgate and non-executive directors. This is not just because traditionally, both have favoured the waistcoat. This is because Gareth Southgate has to balance the detail-- whether to play Phil Foden-- with the wider context. So he had to have discussions with FIFA as to whether the England captain could wear the One Love armband at the World Cup.
So as you can see, it's a balance of the detail with the wider context. And that's what non-executive directors also have to do. So if your non-executive directors haven't received a fee increase recently, it might be worth looking at this area. We know that there are revisions anticipated to the corporate governance code. They're going to apply from the 1st of January, 2024.
And that will sit alongside the evolving ESG agenda such that non-executive director fees could be looked at to make sure that they reflect the reality of the time that they spend, their commitment, the complexity and the skill set required. The IIA is also encouraging non-executive directors to hold shares in the company. And we've seen a growing trend of shareholding guidelines for non-executive directors.
So to sum up, while FIFA is urging football fans to focus on soccer over politics at this year's World Cup, we would encourage companies not to separate executive compensation from the wider context next year such that it remains right for the business, its executive talent, as well as being appropriately aligned with investors, the wider workforce, and other key stakeholders. Thank you very much. I will hope that you enjoy the football this evening.
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