The Advisors' Blog

– Broc Romanek, CompensationStandards.com

Here’s news from this Towers Watson blog (remember that Netherlands, Norway and Sweden already have binding votes):

On March 14, the Department of Business, Innovation and Skills published a detailed consultation document on enhanced voting rights for U.K. shareholders, including the proposal to require binding say-on-pay votes in the U.K., pursuant to Vince Cable’s policy announcements in January. The main components covered in the consultation document are:

– An annual binding vote on future remuneration policy (If a company fails the vote, it will have to revert to the last approved policy and cannot implement any proposed policy changes, whether contentious or not.)
– Increasing the level of support required on votes on future remuneration policy from 50% up to 75% (or a level in between)
– An annual advisory vote on how remuneration policy has been implemented in the previous year
– A binding vote on individual directors’ exit payments over and above an amount equivalent to one year’s salary (regardless of the circumstance of termination and including any amounts in respect of in-cycle incentive payments, benefits and pension).

Comments on the consultation document are being accepted until April 27, 2012, and the government expects to publish draft legislation on this and the narrative reporting requirements over the next few months. The new voting regime, as finalized, is due to come into effect for reporting years ending on or after October 2013.