Diversity, Equity & Inclusion: Fair reward framework

Executive pay is a highly contended topic that attracts a range of opinions from corporate stakeholders. Pay design, structure and implementation continue to be areas of great investor interest and concern. We believe that the appropriateness of executive pay should not be determined in isolation but in the context of how a company is creating and distributing value to shareholders, workers, and society, more broadly.

Working alongside a steering group of asset owner members, Brunel is involved in developing the Fair Reward Framework. In its pilot year in 2024 the project will launch a dashboard of indicators for FTSE 100 companies that will provide investors with greater insight on how those contributing to a company’s value creation are rewarded.

Following public consultation in September and October 2023, the indicators covering company characteristics, pay setting processes and engagement with stakeholders, and reward outcomes were finalised. The tool is intended to enable the assessment of individual companies in these areas, drive better practice and contribute to investors’ stewardship efforts.

Although executive pay is not a standalone RI priority for Brunel, there is a strong connection with themes such as social and human rights and diversity and inclusion. We also think it is of systemic relevance as it can be one of the critical ways, we can address inequality. More informed and holistic conversations bringing together multiple stakeholders can instigate better practices across industries – and ultimately bring benefits to the company, economy, and society as a whole.