The Investment Association (IA) has issued a ‘red-top’ to WH Smith after it revealed its chief executive, Carl Cowling, is receiving a pension contribution of 12.5 per cent of his salary.

Initially reported by Sky News, the IA issued its strongest possible notice following the retailers renumeration report ahead if its monthly annual general meeting, as it said the contribution rate was not in line with the average WH Smith worker.

In its 2019 annual report, WH Smith noted that Cowling, who was appointed in October 2019, does not earn as much as his predecessor, Stephen Clarke.

Clarke reportedly received double the pension contribution rate that has been given to Cowling, while Cowling also receiving a contribution rate of 25 per cent of salary when he became a director in February 2019.

Its annual report also stated that the IA’s guidance “was still evolving” when it made the decision on executive pensions and that the pensions of new executive appointments “will be aligned with the then average rate available to UK employees more generally”.

The IA has been stepping up its efforts in tackling executive pensions that are more beneficial that the average worker, with it warning that it would issue red-top warnings to those paying unfair executive pension contribution rates.

It also issued guidelines on aligning contribution rates, which has resulted in firms including Santander, Lloyds and Barclays cutting their executives’ pension rates.

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