LONDON (Reuters) – Executive pay should take into account any government support, capital supplied by shareholders or furloughing of staff during the pandemic or companies risk damaging their reputations, Britain’s Investment Association said on Monday.

The IA represents investment managers in Britain and said it was asked by remuneration committees of UK listed companies about how shareholders want the fallout from the pandemic reflected in executive pay.

“Where a company has sought to raise additional capital from shareholders, or has required Government support such as furloughing employees, shareholders would expect this to be reflected in the executives’ remuneration outcomes,” the IA said.

“The Principles of Remuneration are clear that executive remuneration should be reflective of the pay and conditions in the wider workforce.”

Failure to be mindful of how staff are affected by the pandemic, such as by having to take pay cuts, may have “significant reputational” ramifications for companies, the IA added.

(Reporting by Huw Jones)