14-Mar-2017 @ 13:30
The European Parliament has passed plans to give all shareholders the right to vote on company directors’ pay, bringing the EU in line with UK shareholders’ rights.
The UK Government has already introduced reforms giving shareholders the power to challenge what they regard as excessive pay. This vote brings the EU in line with the UK by granting shareholders the right to vote on their company's remuneration policy.
Sajjad Karim MEP, Conservative Legal Affairs spokesman, said: “I welcome this move to give shareholders a say in company directors’ pay.
“After two long years of negotiations the EU has finally caught up with the UK in promoting a culture of performance-related pay. This will start to rebuild public confidence in large companies who have been seen to reward directors' with no clear link to performance.”
In addition, the Directive aims to encourage rewarding directors who contribute to the long-term performance of the company, while also creating greater transparency on loans and investments to promote a long-term view. The increased transparency is balanced with a "comply or explain" approach as used in the UK; where if the company does not provide information publically it must explain why they have withheld it.
Mr Karim added: “It is important that we do all we can to encourage long-term thinking in companies as well as improve transparency wherever we can. These provisions will go a long way to improve the sustainability of our businesses and restore public confidence.”« Back