BIS Consultation – Executive Pay: Shareholding Voting Rights consultation – March 2012

BIS Consultation Document issued on 14 March 2012 relating to Executive Pay and shareholder voting rights. The proposals follow the announcement on 23 January 2012 of a package of measures to address failings in the corporate governance framework for executive remuneration including :

  • 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; and
  • Working with investors and business to promote best practice on pay-setting.

The consultation document provides more detail on a proposed model which will give shareholders greater influence on the issue of executive remuneration through enhanced voting rights. 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; and
  • A binding vote on exit payments of more than one year’s base salary.
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Keywords: Annual Report, Corporate Governance, Disclosure rules, Remuneration Committee, Remuneration report
Categories: Company Law, Document archive