Barclays : UK investors tell companies to rethink bonuses if scrapping dividends

Britain's investment managers would expect banks and other companies to rethink bonuses if they are scrapping payouts to shareholders, the Investment Association said on Wednesday.

Top UK banks have scrapped dividends for 2019 and interim dividends for 2020 after being asked to do so by the Bank of England, with other firms also stopping payouts as the economy remains in lockdown.

The current situation should, however, not be used to "rebase or reduce" dividends unneccesarily, IA Chief Executive Chris Cummings said in a statement.

"Shareholders would expect companies to restart them as soon as it is prudent to do so," Cummings said.

Companies that stop paying dividends to shareholders should also consider how this impacts on executive pay for this year and for the year the dividend had been intended for, Cummings said.

The Bank of England has also asked top lenders not to pay bonuses this year.

(Reporting by Huw Jones)