Corporate governance – IA updated Principles of Remuneration

The Investment Association has published its Principles of Remuneration for 2025, following an in-depth review.

The IA updates its guidance and writes to Remuneration Committees annually to highlight the key areas of focus it expects Remuneration Committees to consider when approaching remuneration. 

The 2025 Principles have been substantially rewritten and are significantly less prescriptive than before. There are several changes that listed companies should be aware of ahead of the 2025 AGM season, including:

• the 5% dilution limit applicable for discretionary share schemes, that capped the use of new issue or treasury shares over rolling 10-year periods, has been removed;
• the section on treatment of share awards on a change of control has been deleted;
• the IA confirms that it considers one times the annual LTIP award to be an appropriate benchmark for the minimum shareholding requirement; and
• it acknowledges that “hybrid schemes”, under which executives receive a combination of performance-based and service-based share awards, may be appropriate for some companies.

For more details on the revised Principles, see this blog post prepared by our Incentives team.