LONDON (Reuters) - The Investment Association stepped up a campaign on Monday to persuade Britain's top companies to address concerns on boardroom pay by publishing a new set of principles it hopes will shape the way businesses remunerate bosses.
In an open letter addressed to constituents of the FTSE 350 index, the trade body called on companies to disclose pay ratios between the CEO and the median employee salary and to provide investors with greater context to understand the scale of pay and bonuses.
The IA, members of which manage more than 5.7 trillion pounds of assets, hopes its new principles will pave the way for simpler, more flexible remuneration structures and "clear justification" around CEO pay.
The renewed push follows recommendations from the industry-led independent Executive Remuneration Working Group and a pledge by Prime Minister Theresa May to crack down on excessive executive pay as part of a plan to tackle growing social inequality in Britain.
"Issues surrounding executive pay are a growing concern for investors, politicians and society as a whole," Andrew Ninian, the IA's director of corporate governance and engagement, said in a statement.
"It is vital that companies have the opportunity to choose the right structure for their business and this must be done in close partnership with their shareholders."
The IA has also called for improved shareholder consultation on remuneration issues and demanded that businesses focus on demonstrating to investors how their pay plans fit with company strategy.
To aid compliance, the IA said that its corporate governance research unit, IVIS, will monitor companies against the new principles and highlight areas of concern to investors ahead of voting at company meetings.