Fidelity has written to the boards of more than 400 companies and warned them it will start voting against remuneration packages for bosses from January unless changes are made which lead to more long-term incentive plans.
In a letter, seen by The Sunday Times, Fidelity's global chief investment officer Dominic Rossi (pictured) said many schemes are still too complicated and do not ask bosses to hold share awards for long enough.
As a result, from January, Fidelity will vote against remuneration reports that do not require heads of companies to hold shares awarded under bonus schemes for at least three years.
Looking further ahead, Fidelity is pushing for bonus schemes that have five-year lock-ins for senior executives, as it moves to combat short-termism.
Fidelity has been arguing the case for change for some time, and was a key player during the 'shareholder spring' revolts seen at companies such as Aviva and WPP.
The company recently conducted a review of remuneration practices, looking at the adoption of long-term incentive plans (LTIPs) among FTSE 350 companies (excluding ITs and other non-operating companies).
It found, of the 304 companies remaining, 238 had either no equity-based incentive scheme or an equity-based plan that vests for three years or less.
Only 14 companies (versus six last year) had LTIPs that extend to five years. A further 52 companies (versus 35 last year) sat in the middle, with plans of between three and five years.
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