A few snippets

1. The NAPF put out a survey of pension scheme members' views on issues relating to stewardship last week. There's an interesting finding in there about what they think pension funds ought to be talking to investee companies about. Employee pay and conditions ranks above exec pay, environmental issues and so on. In practice I reckon it's near the bottom of the list of stuff that actually gets talked about. Here's the blurb:

If the primary fund of your pension provider were taking an active role in the companies they invest in, what do you think are the most important issues for them to consider?
Understandably the issue considered most important was the recent financial performance of the company (57%) with pay and conditions of employees (36%) and level executive pay (30%) a distance behind.
Notably despite the significant attention given to issues of executive pay, diversity and environmental impacts – all of which the NAPF agrees are important and material issues for many companies – these do not on the whole feature very highly for respondents.
Recent financial performance of the company57%Pay and conditions of employees36%Level (and structure) of pay for management30%Worth noting are the relative weightings given to the issues by the younger cohort. It is these employees with whom it is most important to engage with pension saving and whom will also be bearing the investment risk for the longest period of time. Given this context, it is worth noting that amongst 18-34 year olds the issue of pay and conditions of employees is considered on a par with the company’s recent financial performance (44%); in addition issues related to human rights and environmental impact are also considered significantly more important than they are amongst the wider population (28%). 

2. There's a been quite a lot about the motivational limits of financial incentives. I've said it before, but I do think there is a shift in opinion underway here, though the corporate governance mainstream seems absolutely determined to keep redesigning performance-related reward.

Anyway, Simon Wong has a good bit in the FT, and he's more optimistic than me that a rounder view of executive motivation is emerging. I completely agree with his ideas too - downplay financial incentives in the CG Code and make companies explain their approach to motivation. I would only add that we should make investors explain their motivational assumptions, especially when proposing another new idea to companies involving financial incentives.

There was also a bit in the NYT last week co-authored by Barry 'Paradox of Choice' Schwartz. And going back a bit, Katherine Birbalsingh gave some good comments on why performance related pay is a bad idea in teaching.

3. There was a bit in the Indy on Caledonia not donating to the Tories.