Make it pay to rise and revolt
Investors need wages clout, says IoD
BIG firms should be forced to rethink fatcat bonanzas if a sizeable number of shareholders revolt, says a top business group.
The Institute of Directors will today call on the next government to hand investors more power to clamp down on boardroom excess. Under its proposals, if 30% of shareholders vote against a company’s pay plans then it must hold a second vote.
The IoD hopes this will make big firms tackle investor unrest.
At the moment, the majority of executive pay plans are waved through with little opposition.
Just 3% of FTSE 100 companies saw their remuneration reports rejected by a majority of shareholders last year. The IoD also wants a code of governance drawn up for large companies not listed on the stock market.
It comes in the wake of the collapse of BHS, when billionaire Sir Philip Green sold the chain to a two-times bankrupt for £1. It went to the wall a year later.
Oliver Parry, head of corporate governance at the IoD, said: “There is a pressing need to rebuild trust in big business.”
A damning House of Commons report last month called for the biggest shake-up of company oversight in a generation.
However, the Tories have watered down their pledge to give shareholders binding votes on executive pay.
Barclays is braced for a rough ride at its AGM today, with boss Jes Staley facing a fight to survive as chief executive.
The US banker was slammed for trying to unmask a whistleblower and his involvement in a business dispute linked to his brother-in-law.
Meanwhile, Royal Bank of Scotland shareholders are being urged to vote against bosses’ potential bonuses when its AGM is held tomorrow.
Under a new pay plan, the bank’s chief executive Ross McEwan will be eligible to receive a long-term award worth 175% of his salary.