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Legal & General - AGM 23 May 2019

Item 16: Approve the Remuneration Report

The structure is considered unsatisfactory as the use of qualitative criteria for the bonus exceeds guidelines and accelerated vesting is possible.  The quantum is not considered excessive for the year. However, there are concerns over the performance measures for the LTIP as it is currently overly reliant on EPS, though we welcome that it is no longer linked with dividend payouts.  EPS also determines 12.5% of the bonus. Over-reliance on EPS could result in management making decisions to maximize profits for the short term, often at the expense of long term shareholder value. EPS can be positively influenced through share buybacks, fluctuations in foreign exchange, or amendments made to accounting rules & regulations. Performance is not measured against a peer group or other relevant benchmarks. On balance, we recommend shareholders oppose.

Legal & General Group PLC

Legal & General Group is a holding company. Through its subsidiaries, Co. operates in five business segments: Legal & General Retirement, which includes pension risk transfer business and individual retirement and lifetime mortgages; Legal & General Capital, which represents shareholder assets invested in direct investments, and traded and treasury assets; Legal & General Investment Management, which represents institutional and retail investment management and workplace savings businesses; Legal & General Insurance, which includes business in retail and group protection written in the U.K.; and General Insurance, which comprises short-term household and other personal insurance.


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