New service letting savers email City institutions to demand action on executive pay follows protest vote at Barclays
A new service has been launched aimed at mobilising public anger over executive pay.
Building on the protest vote against remuneration policies at Barclays on Friday, a new website will allow savers to email the major City institutions that manage their investments and demand they take action on executive pay.
The rebellion at Barclays came amid signs that institutional investors are beginning to take action against underperforming companies. Last week the pay policies of Central Rand Gold were voted down when 75% of investors voted against the remuneration report of the South-Africa-based company, which is listed in London. The pay policies were also rejected last year after a period of underperformance by the company, which was worth £300m at its flotation in 2007 but has sunk to just £15m now.
The new website – www.yoursayonpay.org.uk – is intended to give people a say on pay and is run by FairPensions. Mike Darrington, the former managing director of the bakers Greggs, is a supporter.
Darrington said: “It’s high time that we get a handle on excessive executive pay. For too long now many of those at the top of Britain’s biggest companies have continued to reap enormous rewards while profits and share prices fail to impress. I … urge anyone who cares about excesses at the top to take their online action.”
Even though investors have had a vote on pay since 2002, only 18 remuneration reports have had more than 50% of votes cast against them in 10 years, FairPensions said. This has sparked mixed responses to Vince Cable’s proposals to introduce new votes on pay policies that would be binding on directors, rather than advisory as they are now.
Catherine Howarth, chief executive of FairPensions, is also attempting to highlight the fact that institutional investors do not have to disclose how they vote at annual meetings.
“Until now scrutiny of high-paying companies has been left to big investors, who have shown themselves reluctant to take a strong stance on spiralling pay awards. It’s high time the public had a chance to influence this debate and have their say on pay,” Howarth said.
Speaking after the Barclays annual meeting on Friday, the bank’s chairman, Marcus Agius, said shareholders were increasingly keen to show they were taking action.
“The institutions … are also very keen to be seen to be exercising stewardship and that I completely respect,” said Agius. “The sentiment of shareholders is being heard everywhere. It’s not a Barclays-specific issue.”
Neither does it appear to be happening only in the UK. More than a third of investors protested against the pay of bankers at Credit Suisse last Friday, while in the US more than 50% of investors voted against remuneration at Citigroup.