Asset manager Fidelity urges ministers to get tough on executive pay committees
Fidelity International wants ministers to back a proposal for boardroom pay committee chairs to be forced out if a large minority of shareholders do not back remuneration plans.
The suggestion is included in the asset manager’s submission to the government’s consultation on corporate governance reform.
Read more: Fund managers plan executive pay crackdown to avert government intervention
Sky News first reported that the firm’s head of corporate finance, Trelawny Williams, had written to the Department for Business, Energy and Industrial Strategy to say an annual binding pay policy vote would make boards more accountable.
In addition to increasing the frequency of the binding votes on pay policy, from once every three years to once a year, the chairs of the remuneration committees should be held personally accountable and step down if less than 75 per cent shareholder approval is won, Fidelity said.
Read more: Henderson shares hit as fund manager reports £4bn outflows
Earlier this month, it emerged that a group of fund managers had agreed to club together and combat excessive executive pay to avert the need for a government intervention.
And it was reported last weekend that fund manager body the Investment Association will submit proposals to urge ministers to consider imposing an automatic binding vote for companies whose pay deals were voted against by more than a quarter of shareholders the year before.
The corporate governance reform consultation closes on 17 February.