Landsec, a leading British property firm, has announced a number of changes to its executive pension offerings in response to guidance from the Investment Association (IA).

The firm confirmed that, in order to comply with “recent corporate governance developments”, its incoming CEO, Mark Allen, will receive a pension allowance of 10.5 per cent, in line with the wider workforce.

Allen will be taking a reduction in his pension allowance compared to his predecessor, Robert Noel, who received £202,000 pension allowance in 2019/20 on a £812,000 base salary.

Landsec property managing director, Colette O’Shea, has also received a reduced pension allowance of 10.5 per cent from 1 January 2020, having benefited from a £53,000 pension allowance in 2019/20 on a £444,000 base salary.

The companies policy on pensions now states that unless directors choose to take membership of the occupational pension scheme, they will receive a pension contribution in line with the wider workforce, at 10.5 per cent.

Despite this, chief financial officer, Martin Greenslade, has seen his pension allowance fall by just 5 per cent to 20 per cent as of 1 June 2020.

Furthermore, although the report stated that Greenslade's allowance would be “subject to further consideration as part of the policy review in 2021”, no specific plans were outlined as to how this might be bought in line with the 10.5 per cent rate received by the broader workforce.

According to The Guardian, this lack of detail has now seen the firm's financial report issued a ‘red top’ alert from the IA's Institutional Voting Information Service (IVIS).

The 'red top' alert is the strongest possible warning given by the IA, and is reserved for firms who do fail to have a credible plan in place to reduce contributions to wider workforce levels by the end of 2022.

Executive pensions have faced increased scrutiny since September 2019, when the Investment Association cracked down on firms which had failed to align executive pension pay with their workforce.

The Landsec annual shareholder meeting will be taking place on 9 July.

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