Standard Life pushes for departing executives to keep shares longer

LONDON Thu Dec 12, 2013 9:19am EST

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LONDON Dec 12 (Reuters) - One of Britain's biggest fund managers has issued new guidelines for evaluating companies in which it invests, demanding executives hold on to shares in a former employer for at least a year.

Standard Life Investments (SLI) released a revised set of policy guidelines for fund managers on Thursday, outlining what they should look for when deciding whether to invest in a stock or use votes with companies in which they already hold shares.

The new guidelines emphasise the investment manager's support for pay arrangements at companies which require senior executives to retain an "appropriate" proportion of the shares they own in a company after leaving.

This, SLI believes, will encourage a more long-term approach by people running companies, as it would expose them to the effects of their decisions even after leaving.

SLI, which manages around 180 billion pounds ($294.6 billion), is an enthusiastic supporter of efforts by regulators and governments since the financial crisis to make investors pay closer attention to how companies are run.

Earlier this year SLI, one of the UK's largest investors with significant stakes in many European and British blue-chip companies, came out in support of plans to give shareholders greater powers to block executive pay plans.

"Our new ... guidelines provide our investment team with a global framework to help enhance our evaluation of the governance of companies, which is an increasingly important component in our stock selection process," said Guy Jubb, SLI's global head of governance & stewardship.

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