UK - Executive remuneration is set to remain firmly in the spotlight, following the Government's proposals for an annual shareholder vote on executive remuneration, according to research by New Bridge Street Consultants.
Whilst these proposals are still subject to consultation – the government has invited comments by 15 March 2002 – they are almost certain to come into effect, probably for accounting periods ending on or after 31 December 2002.
New Bridge Street Consultants surveyed the views of 100 FTSE 350 companies and 14 leading institutional shareholders.
Of the 100 FTSE 350 companies:
*97% thought the vote should be advisory only and not legally binding.
*58% welcomed the proposed greater level of disclosure to shareholders.
*38% of FTSE 100 and 24% of mid 250 companies said they would probably put directors’ remuneration to a vote at the 2002 AGM (before legislation requires it).
Of the 14 institutional investors:
*64% did not welcome the government’s proposals; most preferred self-regulation.
*86% thought the vote should be advisory only.
*84% said the proposed level of disclosure was sufficiently detailed.
*70% intend to publish their own guidelines on directors’ pay.
*Only 54% believed that the proposals would help curb excessive executive pay.
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