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National Grid, 29 July 2019

National Grid locked out over 1,200 United Steelworkers (USW) workers in Massachusetts, USA on June 25, 2018 after their contracts expired and an agreement on issues such as pensions, healthcare and contracted work was not reached. The workers went without pay, and many without healthcare as well, until re - instated in January 2019. The dispute at large was over the change of pension from defined benefit plans to defined contribution and 401(k) plans. The lockout cost the Company £1 million a day. Please see the attached report for further details. The Company is also facing litigation regarding UK defined benefit plans and Guaranteed Minimum Pension (GMP) equalisation. The UK High Court has determined that the GMP benefits need to be equalized for men and women. Please see the attached report for further details.

 Item 17: Approve the Remuneration Policy

The Company has been making substantial annual increases to the CEO's salary, which serves to ratchet up pay over all. This is especially concerning as total incentive pay is excessive. The other changes proposed to the Remuneration Policy are uncontroversial, but they do not address the main concerns that worsen the alignment between pay and performance. The annual bonus, benefits, total incentive pay and use of qualitative criteria all exceed guidelines. Both the STI and LTI use ROE as a performance metric. Additionally, the Value Growth metric used to determine half of the LTI may incentivize acquisitions as it includes goodwill. Accordingly, we recommend that shareholders oppose this resolution.

 Item 18: Approve the Remuneration Report

The structure is unsatisfactory and the quantum for the year was excessive. Accordingly, we recommend that shareholders oppose this resolution.


National Grid

National Grid is a holding company. Through its subsidiaries, Co. owns and operates regulated electricity and gas infrastructure networks in the U.K. and the U.S. Co. operates through five business segments: U.K. Electricity Transmission, U.K. Gas Transmission, U.K. Gas Distribution, U.S. Regulated, and Other Activities, primarily relating to non-regulated businesses and other commercial operations not included within the above segments, including: the Great Britain-France electricity interconnector; U.K. based gas metering activities; U.K. property management; a U.K. LNG import terminal; U.S. LNG operations; and U.S. unregulated transmission pipelines, together with corporate activities.


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