A FTSE100 Company Secretary writes...
Should companies require their NEDs to have a shareholding in the company – and if so, at what level should the shareholding be set?
We currently require our NEDs to use a portion of their fees to purchase shares. Our current practice is that we deduct £10k per annum (post tax & NI, representing approximately 11.5% of average gross fees), on a monthly basis and shares are purchased and held in a nominee account on their behalf. The NED is not permitted to sell them during their tenure.
Are we in line with practice elsewhere? What (if anything) are other companies doing?