Four in ten FTSE 100 companies now make bosses wait five years before cashing in long-term bonuses

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More than four out of 10 FTSE 100 companies make top executives wait at least five years before allowing them to cash in their so-called ‘long-term incentive plans’ after a campaign by leading asset manager Dominic Rossi of Fidelity Worldwide Investments.

Rossi has been pressing companies to end short-termism in bosses’ pay for two years. He said ‘long-term incentive plans’ were inappropriately named: ‘You could argue that since they last for just three years it is an oxymoron.’

Until recently, executives in most FTSE 100 companies could cash in their long-term plans after three years. As a result of Fidelity’s campaign, however, the number insisting bosses must wait at least five years before taking their money has risen to 42 from four in 2013.

Short-termism: Until recently, executives in most FTSE 100 companies could cash in their long-term plans after three years

A further 18 businesses have holding periods of between three and five years and 40 still have a waiting time of three years or less. Rossi has warned companies that Fidelity will refuse to back their pay reports if they do not comply.

Asset managers have been accused of hypocrisy for paying themselves handsomely and for keeping their rewards under wraps.

Critics, including the Institute of Directors, have warned that their pay practices are ‘ripe for investigation’ and say this makes them ineffectual at cleaning up excess in the corporate sector.

Rival asset managers Aviva and Standard Life have signed up for Fidelity’s five-year holding periods but others, including Aberdeen Asset Management, have not.

Fidelity said its executives buy ‘career shares’ that they must hold until they retire or leave the firm, but admitted it does not disclose individual fund manager rewards.