BusinessPeople In BusinessInvestors get say on pay.

Investors get say on pay.

Plans to give shareholders more influence over directors'remuneration given thumbs up

Plans to allow shareholders to vote on boardroom pay deals have received a thumbs up from the accountancy profession despite fears directors may take fewer risks as a result.

Under proposals announced last week by trade secretary Patricia Hewitt, investors will be given the right to an annual vote on directors’ pay in a bid to strengthen the link between pay and performance.

However, the vote will only be ‘advisory’ – it will only enable shareholders to ‘express a view’.

The move follows increasing shareholder unrest over directors’ remuneration, such as at Vodafone, where shareholders challenged directors on the issue at July’s AGM. Vodafone chief executive Chris Gent is one of the UK’s highest paid executives.

But one senior accountant warned the move could dampen risk-taking by directors. Roger Davis, head of professional affairs at PricewaterhouseCoopers, said: ‘The nature of risk is that sometimes it doesn’t come off. You don’t want to discourage people from taking these jobs.’

But Gerry Acher, senior London partner at KPMG, said: ‘Risk needs to be managed – so long as everyone is clear on their responsibilities this won’t make one iota of difference.’

John Davies, head of company law at ACCA, said: ‘This could make the agm a much more meaningful exercise.’

More at www.dti.gov.uk

Related Articles

Women in Finance ranking 2018

People Business Women in Finance ranking 2018

2m Alia Shoaib, Reporter
Shortlist announced for British Accountancy Awards 2017

Accounting Firms Shortlist announced for British Accountancy Awards 2017

9m Emma Smith, Managing Editor
Pimlico Plumbers to take employment case appeal to Supreme Court

Legal Pimlico Plumbers to take employment case appeal to Supreme Court

9m Alia Shoaib, Reporter
HMRC appoints new director generals

HMRC HMRC appoints new director generals

10m Alia Shoaib, Reporter
Submit your entry for the British Accountancy Awards!

People Business Submit your entry for the British Accountancy Awards!

11m Emma Smith, Managing Editor
BDO appoints two non-executive directors as advisers to leadership team

Accounting Firms BDO appoints two non-executive directors as advisers to leadership team

11m Emma Smith, Managing Editor
Ex-HMRC chief to join ICAS council

HMRC Ex-HMRC chief to join ICAS council

1y Emma Smith, Managing Editor
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

1y Stephanie Wix, Writer