Executive Pay: Consultation on Enhanced Shareholder Voting Rights
Open date: 14 Mar 2012
Closing date: 27 Apr 2012
Response date: 27 Jun 2012
DIRECTORS' PAY: CONSULTATION ON ENHANCED SHAREHOLDER VOTING RIGHTS
On 20 June 2012, the Business Secretary, Vince Cable, announced the most comprehensive reform of the framework for directors' remuneration in a decade.
See link: press release - Government announces far-reaching reform of directors' pay
The announcement follows a consultation on enhanced shareholder voting rights, which closed on 27th April 2012. The Government has engaged extensively with businesses and investors to come up with a robust, workable and enduring package that helps shareholders to sustain their increasing activism.
A summary of the responses (PDF, 134 Kb) to the shareholder voting rights consultation can be viewed online.
Download the responses received:
Shareholder voting rights individual responses a-z (ZIP, 1.6 Mb)
Shareholder voting rights corporate responses (ZIP, 11.2 Mb)
Shareholder voting rights corporate responses (ZIP, 11.5 Mb)
Shareholder voting rights corporate responses (ZIP, 9.9 Mb)
Shareholder voting rights corporate responses
(ZIP, 12.8 Mb)
On 23 January, the Secretary of State for Business announced a package of measures to address failings in the corporate governance framework for executive remuneration. This includes:
• Greater transparency in directors’ remuneration reports
• Empowering shareholders and promoting shareholder engagement through enhanced voting rights
• Increasing the diversity of boards and remuneration committees
• Encouraging employees to be more engaged by exercising their right to Information and Consultation Arrangements
• Working with investors and business to promote best practice on pay-setting
Following this, the Secretary of State for Business has published a consultation which provides more details on a new model for shareholder voting. The main components of this are:
• An annual binding vote on future remuneration policy
• Increasing the level of support required on votes on future remuneration policy
• An annual advisory vote on how remuneration policy has been implemented in the previous year
• A binding vote on exit payments over one year’s salary
The purpose of the consultation is to seek evidence on the impact, costs, benefits and likely behavioural effects of the proposals.
This consultation is of particular relevance to companies and business organisations, shareholders and institutional investors, employees and employee representative organisations, academics, governance experts, lawyers and other advisors.
It builds on the evidence received in response to a discussion paper on executive remuneration, published last year. The discussion paper can be found at: Executive remuneration discussion paper . A summary of the responses can be found here.
The Department's press release can be found here
Download the consultation
Download the government response