BlackRock, the world’s largest asset manager, wants the UK’s biggest companies to rethink how much they pay their top execs, according to a letter that was first leaked to The Financial Times.
In the letter, written by the head of BlackRock’s investment stewardship team in Europe, Amra Balic, Blackrock states that pay increases for top executives should reflect those given to the broader workforce.
“In the case of a significant pay increase that is out of line with the rest of the workforce, BlackRock expects the company to provide a strong supporting rationale,” said Balic.
The letter, which comes as many UK firms start to think about pay packagers, was sent last week to the chairmen of all companies in the FTSE 350 index.
It was accompanied by a set of guidelines that are designed to assist boards as they put their pay policies together.
The letter also calls on the chairmen to reduce the generous pension packages that are often given to top executives.
BlackRock declined to comment.