similar to those available under normal circumstances. We will vote against any severance payments or retirement bonuses when the amount paid is not disclosed or the recipient is moving to another position within the company. AllianzGI expects disclosure of a policy addressing possible hedging of the company’s stock by its executives, where such activity is permitted. Using hedging instruments to protect management against negative share price movements undermines the purpose of equity incentive plans and reduces alignment with shareholder interests. We note that, in some markets, companies seek approval of a so called “budget” to pay its directors, without disclosing details of the remuneration policy or approach. In such cases, AllianzGI will review past remuneration of directors and management, as well as proposed pay levels. We may not approve significant increases in board remuneration that are not linked to material changes in the business, or in the number, roles and responsibilities of directors. We would like to see all remuneration related proposals to be sufficiently detailed to allow shareholders to assess the structure of and approach to director remuneration. Employee Remuneration Remuneration structures and frameworks for employees should help reinforce corporate culture and foster performance. In this respect and in accordance with applicable laws AllianzGI encourages companies to provide shareholders with information on the ratio between senior management compensation and that of the wider workforce, including calculation methodology and changes over time. Performance measurement for staff remuneration should incorporate risk considerations to ensure that there are no rewards for taking inappropriate risks at the expense of the company and its investors. AllianzGI supports all-employee equity plans as we generally consider these beneficial in aligning employee interests with shareholders. However, we may not be able to support employee share plans, which appear to be excessively dilutive for shareholders. Remuneration of Non- Executive Directors AllianzGI believes that compensation of non-executive directors should be structured in a way that aligns their interests with long-term interests of shareholders, does not compromise their independence from management or from controlling shareholders of the company, and does not encourage excessive risk-taking behaviour. In particular, AllianzGI believes that non- executive board members should not receive variable remuneration, equity incentives or retirement benefits as these could compromise their independence and ability to hold management accountable. AllianzGI believes that non-executive directors’ fees should be sufficient to attract directors of appropriate calibre and experience, while all notable differences in board members’ fees should reflect their responsibilities and time commitment and be clearly explained and justified. We expect all non-executive directors to share their expertise and offer advice to the board and management as part of their role. We therefore find any chargeable consultancy services provided by directors inappropriate, as they compromise directors’ objectivity and ability to hold management accountable. AllianzGI cannot approve a substantial increase in directors’ fees without a robust justification by the company. Remuneration Committee and “Say on Pay” The company’s remuneration policy and the structure/quantum of pay for each director should be determined by the Remuneration Committee and fully disclosed to shareholders in a Remuneration Report. AllianzGI supports annual votes on executive remuneration, which provide the most consistent and clear communication channel for shareholder concerns about companies’ executive pay programs. AllianzGI encourages moves to give shareholders a vote on executive remuneration. AllianzGI will vote against remuneration related proposals – either on policy or the report – where insufficient information has been provided to allow investors to make an informed decision. AllianzGI expects all companies that received high levels of dissent on their remuneration proposals to understand the rationale behind negative votes and address investor concerns. We may vote against the Chairperson and members of the Remuneration Committee where shareholder concerns remain unaddressed despite significant shareholder dissent or where we remain unsatisfied with the remuneration policy following engagement with the company. AllianzGI expects all plans that allow grants of shares to executive directors to be put to a shareholder vote, regardless of whether the shares are newly issued or purchased on the market. We also believe that all incentive plans should be of a limited duration and require shareholder approval prior to renewal. AllianzGI believes that the Remuneration Committee should have discretion to adjust pay levels under the remuneration policy to reflect shareholder experience and help avoid reputational and other risks to the business. However, we do not approve of unlimited discretion. Global Corporate Governance Guidelines 18