Scottish & Southern Energy, 18 July 2019
Item 2: Approve the Remuneration Report The remuneration structure is unsatisfactory. First, the remuneration committee has the discretion to determine half of the bonus. Additionally, there is lack of disclosure of pension accrual rates and an excessive pension contribution was made in this year and the previous two years. Furthermore, dividend per share is used with both the STI and the LTI. Aside from being an overlapping performance condition, the use of dividend per share is not considered appropriate as executives have a certain level of control over the dividend payout and therefore can influence the level of their incentive pay. Therefore, although the quantum is not excessive and incentive pay is at acceptable levels, we recommend shareholders oppose this resolution.
Item 3: Approve the Remuneration PolicyThe changes proposed to the Remuneration Policy does not address the main concerns over the remuneration policy. In particular, while the performance criteria are being adjusted for both the STI and LTI, dividend per share will still be used, which does not meet best practice. Furthermore, there has been no change in the pension arrangements and pension contributions exceed guidelines.
SSE is engaged in producing, generating, distributing and supplying electricity and gas, as well as other energy-related services, across the U.K. and Ireland. Co. has three principal business areas: Wholesale, which uses turbines to convert energy from gas, oil, coal, water and wind to generate electricity, trading in wholesale energy markets, and managing energy contracts; Networks, which transmits and distributes electricity and gas to homes and workplaces; and Retail, which supplies electricity and gas and related services to households and organizations.
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