By 24 March, 50 FTSE 100 companies had published their 2024 annual report and accounts. Just under half (46%) of these are putting their remuneration policies to vote this AGM season (2024: 28%). This update, the first in our 2025 series, provides an analysis of key insights so far.
Following on from the initial bold moves observed during the 2024 AGM season, and building on the updates to the Investment Association ('IA') Principles of Remuneration and ISS Voting Policy Guidelines in the final months of last year, there has been a continuation of atypical changes proposed: nine companies, which represent c. 40% of the 23 companies tabling a new policy for shareholder approval, are taking approaches that can broadly be categorised as follows:
Included in the category of changes to structure are companies that are reducing the proportion of required bonus deferral once share ownership guidelines (SOG) have been met [6 companies in total].
All bar one company increasing LTI opportunities are also increasing the SOG requirement for one or all executive directors (ED). These increases have led to the median SOG for FTSE 100 CEOs increasing from 300% to 375% of salary, and this may rise further during the year if others follow this trend.
Most of the above companies are citing the need for global competitiveness as part of their rationale for proposing these changes. Discussions held during our annual outreach exercise at the end of last year suggest that many investors will be open minded on such proposals, at least in theory – but they will expect each company to give a compelling and well-articulated rationale for any changes. We will report back on the outcomes of the AGM season later in the year.
In response to the removal of the 2:1 variable pay cap in October 2023, three of the largest UK banks have proposed a rebalancing of their ED remuneration. This has included removing fixed pay allowances (typically reducing fixed pay by c. 50%) and increasing maximum bonus and LTI opportunities as a percentage of salary (typically by c. 500% of salary).
Although median increases are a little lower than last year, around a quarter of CEOs have received salary increases for 2025 above 6.0% and over half of these are ≥15%. This marks a noticeable change in direction following several post-pandemic years of no or low ED salary increases.
We also observe the following themes compared to last year:
In the light of US Executive Orders 14151 and 14173, that seek to end DEI policies and programmes within the federal government and require contractors to certify they are not operating "unlawful" DEI programmes, it is a matter of practicality that most US companies are seeking to review, and mitigate risk from, their DEI programmes and policies. This includes incentive programmes. However, this represents a dilemma for global FTSE 100 companies as these sensitivities are not generally present across the UK or broader Europe, but some companies may still be exposed to a degree of risk if they have US businesses, and especially if they are federal US contractors. Companies will need to evaluate the risks between backlash from (1) their stakeholders (e.g., customers, employees, non-U.S. parties) by reframing or backtracking on DEI and (2) the reputational and litigation risks from continuing their DEI programmes. It is too soon to comment on how these developments will impact FTSE 100 market practice, although the latest data suggests there is currently a roughly 50:50 split between those maintaining DEI metrics in incentive plans and those reducing their weighting or removing them entirely. Our recent article: Are DEI metrics in executive incentive plans gone for good? explores the challenges in more detail and the implications for executive incentive plans.
Download our report to explore the full findings and gain a comprehensive review of remuneration outcomes for 2024 annual report and accounts thus far.
| Title | File Type | File Size |
|---|---|---|
| Early insights from FTSE 100 Directors’ Remuneration Report publications – 2025 | .4 MB |
