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Prime Minister Teresa May has said she wants to improve the way
companies are run, reining in the pay of top bosses after the
country's vote to leave the European Union, which was in part
put down to anger at growing social inequality.
In a list of seven recommendations to the government's Business,
Innovation and Skills Committee inquiry on corporate governance,
the group backed plans by May for a binding vote on a firm's pay
report.
It also backed disclosure of pay ratios between a chief
executive and the average worker, but said the data should be
tracked over 10 years and that the CEO's pay should also be
measured against the second-highest earner in a company.
ShareSoc, which advises individual private investors in British
companies, said it supported plans for a shareholder committee
to oversee payouts, and reiterated its calls for average FTSE
100 CEO pay to be reduced by around half.
It also wanted the government to back groups such as ShareSoc to
educate individual shareholders on their rights, even if their
shares were held in nominee accounts, and to toughen up
regulation of the smallcap AIM market.
"Individual investors do not have effective power to curb
directors' pay. Fund managers, who are merely intermediaries in
the ownership chain, have usurped this power: but have patently
failed to provide effective stewardship," ShareSoc said.
"It is time for a strong input from Government and regulators of
the London Stock Exchange to change the framework in which we
are currently operating. The goal should be to get more power
back to the ultimate investors."
(Reporting by Simon Jessop Editing by Jeremy Gaunt)
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