Executive pensions & UK corp gov

Well over a decade ago, when I worked at the TUC, we started carrying out a survey of directors' pensions entitlements in the FTSE100. This was because we were aware that many directors still had DB pensions when these schemes were being closed for staff, and that exec schemes had preferential terms (accrual rates of 1/30th were common). As directors shifted into DC schemes, or started taking cash in lieu of a pension, it was clear that the rates available to them (often 20% or 25% of salary) were way above typical employer contributions to workforce DC schemes. As a result also argued that directors should be in the same schemes as their workforce and on the same terms.

Since then there have been various attempts to nudge companies to a) disclose more and b) adopt a fairer approach. Back in 2010 LAPFF and NAPF (as was) called for greater disclosure of directors pensions. A few asset managers now have a line in their policies on remuneration that directors shouldn't get preferential treatment.

The UK Corporate Governance Code now includes this (weak) blurb:

And more recently the Investment Association said that from this year it would "red top" companies offering differential provision. This is after years of telling companies that they should do this:

It's obviously a good thing that it is now recognised that giving directors another bung via pension contributions whilst keeping a lid on them for the workforce is not a good luck. But the reality is that it has taken a decade to get this far, that the Code is still very weak on this point, and we've still only got to the point where some shareholders might take a tougher voting stance (which they could have done at any time in the past decade). Even now we are not at the stage of corporates changing their approach.

It shows that left to its own devices the existing compact between corporates and asset managers takes a very long time to deliver limited change. Mainstream UK corp gov is a giant blob that stifles and slows any change. I'm not convinced many existing players have the orientation or capacity to challenge it.