An influential investor advisory group has called on British companies to totally suspend bonuses and all other non-salary pay as markets made a slight recovery.
PIRC, which advises shareholders, said that directors need to respond appropriately to their companies’ financial situations during the coronavirus outbreak.
“As part of an appropriate response, PIRC urges all companies to review their approach to pay, and amounts to be paid to their executives in the light of current events,” PIRC’s managing director Alan MacDougall said in a letter to companies.
PIRC therefore calls on companies to suspend all payments to executives other than basic salary from the 1st April, until the end of your financial year.Alan MacDougall
He said that “few if any” pay schemes are likely to be appropriate under the circumstances of a health crisis and market rout.
“PIRC therefore calls on companies to suspend all payments to executives other than basic salary from the 1st April, until the end of your financial year,” Mr MacDougall said.
It came just before markets ticked back into positive territory after the Bank of England announced it was cutting interest rates from 0.25% to 0.1%.
International markets had been subdued on Thursday compared to the rollercoaster rides of recent weeks.
Although London’s main index, the FTSE 100, dropped as much as 2.7% earlier in the day, it had regained most of those losses and was flat before the Bank announced its decision.
Investors had appeared unsure what to do next, waiting on decisions from the major governments and central banks around the world.
However, even the jump after the Bank’s decision was not emphatic, petering out at 0.9% up, at 5,126, not even managing to outdo the day’s high of 5,166.63 which was reached on Thursday morning.
It closed the day up 71.03 points, or 1.4%, at 5,151.61.
Parts of the travel sector, which have borne the brunt of the economic hit from the pandemic, came back fighting on Thursday.
Carnival, the cruise company that has been forced to dock many of its ships, rose by 19% while tour operator Tui put on 19%.
But it was a mixed bag as IAG, the owner of British airways, posted a 9% fall and Intercontinental Hotels fell by 8%.