Standard Life Aberdeen would back pay policy extensions - letter

LONDON, April 22 (Reuters) - British fund manager Aberdeen Standard Investments said it is prepared to support companies seeking to roll over their existing executive pay plans for a further year, given the turmoil caused by COVID-19.

While many companies must put forward a new three-year plan at their forthcoming annual general meeting, the asset manager - part of Standard Life Aberdeen, one of the biggest investors in UK firms - said it was prepared to be flexible.

“If necessary we will support companies seeking approval of the continuation of their existing policy for a further year to allow the deferral of changes until a more normal business environment exists,” it said in an open letter posted on its website.

On dividends, Aberdeen Standard said companies should do “their utmost” to retain enough capital to meet their future needs, but that “we would also expect that companies who are well placed to maintain their dividend policy will do so”.

For those seeking its support to raise fresh equity capital, the letter warned they would need a strong business case and a detailed analysis of how the money would meet the company’s needs for at least the next year.

“This would take account of any reduction of dividend, re-negotiation of debt covenants and the use of emergency support from banks and the government,” the asset manager wrote.

“We stand ready to play a part in this process.”

Reporting By Simon Jessop, editing by Sinead Cruise