EUROPE - Angry trade unions across the UK, Germany and the Netherlands have appealed to the European Commission and local governments to formally crack down on excessive executive pay.
The move comes in the wake of a recent victory by shareholders in the UK against a £22m' golden parachute' deal for GlaxoSmithKline boss Jean-Pierre Garnier.
The UK’s Trades Union Congress (TUC) and its counterparts in Germany (DGB) and the Netherlands (FNV) issued a joint statement calling for the end of large payouts that are not linked to performance.
They also urged the EC to legislate for maximum transparency, limited stock options, employee representation on remuneration committees and mandatory shareholder voting and disclosure.
The statement read: “Too often in recent years it has seemed that executives regard companies as vehicles for self-enrichment rather than for the creation of wealth for all stakeholders.
“In this sense a company’s approach to executive pay is a key indicator of how focused the management is on its primary function. To get it wrong is a major failing of corporate governance.”
But the unions also challenged institutional investors to publicly disclose how they vote.
“We are currently seeing some response from institutional investors but too often the response is weak. This is due to a disconnection between the ultimate owners - for example the pension funds - and the fund managers they employ.
“As long as fund managers are not required to publicly disclose how they vote it is impossible to tell which ones are genuinely trying to address failings... .”
In the UK, the TUC is urging shareholders in banking giant HSBC to vote against the company's executive remuneration report at today’s in London.
Brendan Barber, TUC general secretary, said: HSBC shareholders have a chance today to show they are not prepared to subsidise enormous payouts to failing directors.
“A vote against this pay deal would show that investors are serious about tackling greed in Britain's boardrooms
Should it be approved, however, the deal will provide executive director William Aldinger with a target annual bonus of £2.5m, a year’s salary of £600,000 and various other bonuses which would be worth an estimated £18.3m if his contract was terminated.
PwC, KPMG, EY and Deloitte must break up their consultancy and audit businesses into distinct firms to provide greater focus on the "most challenging and objective audits", the competition watchdog has said.
The Department for Work and Pensions (DWP) has released its first batch of guidance setting out how the guaranteed minimum pension (GMP) conversion legislation may be used to resolve unequal payments.
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