Following the recent spate of shareholders flexing their muscles and batting out plans for high level executive remuneration, the EU’s Internal Market Commissioner Michel Barnier outlined on Wednesday new plans empowering shareholders in Europe’s listed companies and investors in the continent’s banks.
Commenting on Barnier’s plans to give shareholders in European companies a binding vote on pay, Dominic Rossi, Global Chief Investment Officer at Fidelity Worldwide Investment said:
“We firmly believe that shareholders should be able to exercise a much greater influence over executive pay. Reward needs to be in proportion to results and relative to the prospects for growth. So we fully support Commissioner Barnier in this initiative and believe that a binding vote will in itself go a long way to reining in some of the excesses which are currently resulting in shareholders like Fidelity Worldwide Investment voting against Remuneration Committee reports.
In addition, we support the Commissioner’s view that the level of bank executives’ bonuses should be a matter for shareholder engagement rather than external regulation. Giving shareholders an effective say on pay will ensure better alignment between the interests of managers and owners and removes the need for the imposition of arbitrary limits on future pay practice.”
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