UK shareholders active on remuneration consultation
Shareholders are increasingly engaging with companies on remuneration policies in the United Kingdom, signalling a period of consultation in 2014.
Standard Life Investments reported the 2014 UK Annual General Meeting (AGM) was not an "unqualified success" but did result in a binding shareholder vote on companies' remuneration policies.
"Although shareholders and large companies spent some time in 2013 developing remuneration reporting guidelines, the need for companies to get clarity on shareholders' view meant that consultation was their preferred method of preparing for AGMs," the report said.
But not all companies were able to get unanimous support from their shareholders for their remuneration policies.
Some remain unhappy at the use of wide discretionary powers for remuneration committees, secrecy over performance measurement targets, and unnecessarily generous rewards for threshold performance.
While this is a good outcome, the report noted shareholder engagement could plummet in the interim as AGMs happen only once in three years.
"We hope that this is not the case and, instead, it becomes an opportunity to focus on other aspects of shareholder concern such as values and business practices, audit quality and succession planning," the report said.
A similar trend is evident in Australia, where shareholder engagement exists at a much higher level, an AMP.NATSEM report found.
AUTHOR
Malavika Santhebennur
Recommended for you
Platinum Asset Management has announced co-chief investment officers Andrew Clifford and Clay Smolinski are to step down from their roles.
Reporting a half-year profit increase of 757 per cent following multiple divestments, Pacific Current Group is now exploring existing and new investment opportunities to accelerate growth.
Natixis Investment Managers has explored how financial advisers can leverage derivative income ETFs for their clients who are seeking to enhance income generation.
ETF provider Betashares has launched two ASX-listed ETFs investing in bitcoin and Ethereum cryptocurrencies.
