July 24, 2014
Impact of UK’s “Shareholder Spring” on Executive Pay
– Broc Romanek, CompensationStandards.com
As noted in this blog by Manifest, “the Shareholder Spring has clearly had an effect on remuneration committee thinking. This has been galvanized by regulatory intervention to reinforce investors actions. However, the single figure “accounting for pay” approach has created more uncertainty for shareholders.” This is among the information provided in the blog:
– Shareholder Spring effect has reduced CEO pay awards by 7%, following a 5% reduction in the previous year.
– Regulatory intervention has had a galvanizing effect. Vince Cable’s efforts and threats of further legislation have helped in the reduction in CEO pay.
– The accounting-based ‘Single Figure’ of total remuneration is not a true and fair view of pay. It dramatically understates the real amounts of remuneration that will be earned and should be revised.
The latest survey hows that top pay awards have reduced for two consecutive years: by -7% in 2013 and -5% in 2012. The findings are from research and analysis of the latest annual reports of FTSE100 companies.