How UK Shareholders Voted on Executive Pay: Remuneration, Quantum Increases and Incentive Plans

Key Takeaways:

• In this year’s U.K. proxy season, average shareholder support for FTSE 350 remuneration policy proposals remained strong (91.9%). But there were nearly twice as many instances of significant opposition compared to 2024.
• Most of this opposition was in response to a significant quantum increase for executives, or the proposed introduction of a hybrid incentive plan.
• 61.3% of FTSE 350 remuneration policy proposals included a quantum increase, up from 32.4% in 2024.
• Approximately 11% of these listed companies specifically highlighted the challenge of maintaining competitiveness with U.S. peers, down from 30% last year. 
• Ten FTSE 350 companies proposed hybrid plans this proxy season, up from six in 2024, receiving just 76% shareholder support on average.
• The rationales for adopting hybrid plans focused on retention, competitiveness, strategic alignment, and U.S. and global peer practices.

Concerns about the competitiveness of U.K. public equity markets continue to drive the debate around FTSE 350 executive pay and the “Transatlantic Pay Gap.”^1,2 Last year, the Investment Association published updated Principles of Remuneration,³ emphasizing the importance of flexibility and encouraging companies to tailor pay structures to their specific needs. This proxy season saw several companies make quantum⁴ and structural updates to their remuneration policies to more closely align with international peers. Against that backdrop, this article provides an overview of pay issues from this year’s U.K. proxy season, covering shareholder voting on remuneration policy proposals, common policy updates, and scrutiny over hybrid incentive plans.

Shareholder Voting on FTSE 350 Remuneration Policy Proposals

During proxy season 2025, 80 companies listed in the FTSE 350 put their binding remuneration policies to a vote. Overall, shareholder support for FTSE 350 remuneration policy proposals in 2025 was in line with 2024, with average votes in favour falling slightly from 92.2% to 91.9%. While no proposals were defeated, 11 received more than 20% opposition (representing 13.9% of total, see Figure 1), up from six in 2024 (representing 8.5% of total). This increase in dissent was largely associated with proposals to raise quantum or introduce hybrid incentive plans.

Figure 1. Shareholder Support for FTSE 350 Remuneration Policy Proposals

Consistent with 2024, most proposals involving quantum increases were endorsed by a significant majority of shareholders. Support was typically stronger where proposed increases were modest, intended to provide additional headroom, or accompanied by clear and persuasive rationales.

By contrast, as shown in Figure 5 below, all but two of the proposed hybrid plans faced opposition exceeding 20%. This may have reflected concerns about an accompanying increase in quantum opportunity under the plans, rather than the hybrid structure itself.

Quantum Increases Common Among Remuneration Policy Updates

Of the companies that submitted proposals in 2025, approximately 81% proposed a material update to their policy (up from 70% in 2024), with the proportion seeking to increase remuneration opportunity effectively doubling year on year.

As shown in Figure 2 below, quantum adjustments were the most common policy change this year, with 49 companies proposing increases. Other notable developments include the relaxation of annual bonus deferral provisions and the continued adoption of hybrid incentive plans.

Figure 2. Breakdown of FTSE 350 Remuneration Policy Changes

Breakdown of Quantum Increases

Rationales for proposed quantum increases varied, with benchmarking, recruitment and retention challenges, and increased company size and complexity being the most prominent.

Figure 3. FTSE 350 Companies Proposing Quantum Increases

Approximately 11% of companies specifically highlighted the challenge of maintaining competitiveness with U.S. peers, down from 30% in 2024. As shown below, incentive plan increases were slightly more common among long-term incentives (35.4%) compared to short-term incentives (29.2%).

Figure 4. Quantum Increases by Type of Plan

Hybrid Incentive Plans Draw Scrutiny

Building on developments from last proxy season, a key trend this year was the continued adoption of hybrid incentive plans. These long-term incentive structures utilize time-based⁵ restricted shares, which are not subject to performance conditions, along with traditional performance shares. Ten FTSE 350 companies proposed such plans this proxy season, up from six in 2024. The rationales for adopting these plans typically centred on retention, competitiveness, strategic alignment, and U.S. and global peer practices.

When we asked about replacing performance-based awards with time-based awards in our 2024 Policy Survey, a majority of investors said that award sizes should be reduced to reflect the reduced risk of forfeiture. As one asset manager put it, “There should be an appropriate discount to the more leveraged nature of performance-based pay, given the increased certainty of reward.”⁶

Figure 5. Shareholder Support for Hybrid Incentive Plans

However, nine of the ten FTSE companies proposing hybrid plans this year also proposed to increase maximum opportunity, even though part of the awards were no longer subject to performance or at-risk. These companies averaged just 73.9% shareholder support, while the only proposal that did not also include a quantum increase, at Aston Martin, was much more well received (94.4% support).

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Notes and References

1. This article also includes contributions from Troy McKeown, Lead Analyst, U.K. and Ireland.
2. Zagoroff, D. Glass Lewis. 2025. “Explaining the Transatlantic Pay Gap.” March 21, 2025. https://www.glasslewis.com/article/explaining-the-transatlantic-pay-gap‍
3. The Investment Association. 2024. The IA’s Principles of Remuneration. Accessed October 1, 2025. https://www.theia.org/sites/default/files/2024-10/Principles%20of%20Remuneration%202025%20-%20Final.pdf‍
4. Quantum refers to the amount an executive is paid, including monetary and/or equity value, as opposed to the structure or components of the pay package.
5. Time-based awards are not dependent on the achievement of performance-conditions, typically vesting after completion of a duration of employment. While they form a standard component of equity compensation in the U.S., until recently they were extremely uncommon for UK public company executives.
6. Glass Lewis. 2024. Policy Survey 2024: Key Findings and Results. Accessed October 1, 2025. https://resources.glasslewis.com/hubfs/2024%20Policy%20Survey/2024%20Glass%20Lewis%20Policy%20Survey%20Results.pdf