Fidelity Sets Out New Requirements For Executive Remuneration

HONG KONG, 6 August 2012 – In a letter to all its investee companies Fidelity Worldwide Investment has set out changes to its voting policy on executive remuneration.


Fidelity believes that the remuneration and incentive arrangements for company executives have become too complex and insufficiently long term in perspective.  To address this, Fidelity has revised its Principles of Ownership to require a guaranteed period of at least five years between the date of the grant of a share award and the sale of any of these shares.  This requirement should apply irrespective of whether the grant of shares is subject to any performance hurdle.  Fidelity also believes that a portion of the shares awarded should be in the form of “career” shares which must be retained until termination of employment within the company.


Dominic Rossi, Global CIO Equities at Fidelity Worldwide Investment said “In recent years the pay of top executives has increased even as returns to shareholders have been poor and we believe that the majority of schemes are insufficiently long-term in their perspective.  This has given rise to pressure from shareholders and others to do more to restrain excessive pay awards.  Whilst we believe that the Remuneration Committee of the Board has the primary responsibility for determining board pay we have come to the view that these policies should be subject to shareholder approval.  This will ensure better alignment between the interests of owners and managers and critically will also reduce the temptation for external agencies to impose arbitrary limits on future pay practice.

We believe that it is in the interest of all parties to allay concerns about corporate pay which has become a major distraction for investors and Boards alike.  We have no objection to outstanding pay for outstanding performance but the interests of managers and owners need to be fully and transparently aligned and we hope that our revised guidelines are a step in this direction.”


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About Fidelity Worldwide Investment

Fidelity Worldwide Investment is a global leader in asset management, providing investment products and services to individuals and institutions in the UK, continental Europe, the Middle East and Asia Pacific. Established in 1969, the company has over 5,000 staff in 24 countries and manages or administers client assets of US$270.5bn. It has over 7 million customer holdings and manages more than 720 equity, fixed income, property and asset allocation funds. The company’s fund managers receive research from one of the largest proprietary research teams, based in 12 countries around the world. Fidelity Worldwide Investment is an independent asset management company which is privately owned.

Data as at 30 June 2012

Media Contact:

 

Rowena Kwok 

Kate Cheung

Head of Corporate Communications, Hong Kong

Corporate Communications Manager

Tel: +852 2629 2782

Tel: +852 2629 2641

Email: rowena.kwok@fil.com

Email: kate.cheung@fil.com