Ashtead slashes pension entitlements for top execs
FTSE 100 plant hire firm Ashtead has axed pension entitlements worth up to 40 per cent of salary for its senior executives as pressure grows on UK public companies to cut excessive pension packages.
Ashtead has cut pension perks for its senior staff from up to 40 per cent of salary to a maximum 15 per cent of salary. New directors’ pension contributions will be aligned with the average UK employees contribution, the Sunday Telegraph reported.
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The move follows pressure from advisers such as the Investment Association and Glass Lewis to cut the disparity between pensions awarded to bosses and average staff members.
The Investment Association has campaigned for firms to limit pension contributions for top executives to 25 per cent of salary.
Glass Lewis has calling for payouts to be limited to 16 per cent of salary.
Companies awarding large salary entitlements to their bosses include holiday company Tui whose chief executive Friedrich Joussen received 51 per cent last year, and materials supplier CRH which awarded boss Albert Manifold pension contributions worth 47 per cent of his salary.
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In March, Lloyds Banking Group chief executive Antonio Horta-Osorio agreed to cut his pension package to 33 per cent of salary from 46 per cent of salary in the face of criticism.
Appearing before the Work and Pensions Committee, he was asked by Frank Field MP, to justify his “greed”.
Horta-Osorio responded: “It is very difficult to accept the word ‘greed’ when my total fixed compensation is lower than the group chief executive of HSBC.”
In its annual report, Ashtead said it recognises “the desire of shareholders to see the alignment of pension contributions with that of the average employee”.