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British public companies should be encouraged to recruit a wider mix of people to their remuneration committees as a way of getting executive pay under control, according to an influential proxy agency.
PIRC said it wanted to see more employee and shareholder representatives involved in board-level pay decisions. Its call forms part of the agency's submission to a government review of short-termism and corporate governance.
“Various solutions have been tried over the years to address accelerating executive pay with little success,” said PIRC managing director Alan MacDougall. “It is time that we looked properly at the dynamics of remuneration committees.”
PIRC also argued that shareholders need a greater say on proposed mergers and acquisitions. Shareholders only have limited opportunities to vote on such deals under current UK laws.
“It can be more difficult to change a company's articles than to decide who owns it,” said MacDougall. “It seems entirely legitimate to question whether this is an appropriate balance.”
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