Investors are to be given a binding vote on executive pay and bank bonuses under plans being drawn up by senior European officials seeking to build on recent momentum behind shareholder activism.
In an interview with the Financial Times, EU commissioner Michael Barnier said investors should have the voting powers to curb ‘morally indefensible’ executive pay growth.
‘I like that expression – the shareholder spring – or even a regulation spring, a rule-making spring,’ said Barnier, EU commissioner responsible for internal markets.
‘I’m very attentive to this movement which I see as very positive. It corresponds with what I have been doing for the last two years. We need to put responsibility and transparency everywhere.’
Barnier said he would support defined maximum bonus to salary ratio, as well as maximum ratio of pay between the top and bottom earners within a company.
He did not refer to a minimum threshold for shareholder support to pass the measures however. The proposals correspond to policies suggested by UK business secretary Vince Cable.