Investors call for greater clarity over executive pensions

16 June 2010

Two major groups of institutional investors have called on companies to show more transparency over the pension perks enjoyed by leading executives.

According to the National Association of Pension Funds (NAPF) and the Local Authority Pension Fund Forum (LAPFF), overgenerous pension terms risk rewarding bosses for failure.

The groups said pension awards should be subjected to shareholder scrutiny in a similar way to bonuses, as part of a company's overall executive remuneration package.

A letter from the NAPF and LAPFF has been sent to the chairman of every firm in the FTSE 350, requesting the release of more information on boardroom pension plans.

"Shareholders need to see what's going on under the bonnet if they're to hold management to account," said chief executive of the NAPF Joanne Segars.

"We hope that companies heed our call for greater transparency."

The Financial Times noted that the subject has been a particularly high-profile "bone of contention" between shareholders and boards since details of Sir Fred Goodwin's controversial pension award were released by Royal Bank of Scotland last year.