UK - Some consultants are encouraging companies to complicate or dilute remuneration reports to dissuade shareholder involvement in the firm, corporate governance advisers claim.
The fears were raised ahead of new legislation that will require listed companies to give copies of their remuneration report to shareholders for voting.
Insight Investment director of investment strategy Tim Rees said this was unacceptable and would not deter shareholders from voting on remuneration issues.
“We don’t want to have to look at every single issue under a microscope. I fear certain parties advising companies in various aspects know and understand this and they wish to muddy the waters by complicating issues.”
He added that companies needed to find a balance between the interests of shareholders, the board and employees.
Isis Asset Management corporate governance director Richard Singleton said any attempts by remuneration consultants to complicate or dilute reports would be likely to result in their dismissal.
He said: “The reports would get a lot of votes ‘against’ and employers would ask why - a very good way for remuneration consultants to get themselves sacked.”
Singleton said he favoured remuneration reports which clearly articulated a policy that appeared reasonable as well as how the remuneration committee was involved in formulation and operation.
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