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MPs call for investors to crack down on high pay
A cross party group of MPs has tabled an Early Day Motion in support of ShareAction's campaign on excessive executive pay. The Early Day Motion (EDM), led by Martin Horwood and signed by 41 other MPs, coincides with the so-called ‘shareholder spring' which has seen high profile votes against excessive top pay at a number of companies including Aviva and WPP. However, it notes that such defeats are still a rarity and calls on investors to do more.
The motion also coincides with an announcement from the Business Secretary, Vince Cable, that shareholders will be given a binding vote on top pay every three years.
The MPs are backing ShareAction's ‘Your Say on Pay' campaign which has seen over two hundred pension funds and ISA providers receive emails calling on them to vote down excessive pay packages at company AGMs. The motion - which notes that these providers have historically been reluctant to clamp down on excessive remuneration - calls on them to take a ‘robust attitude to excessive remuneration'.
With the AGM season far from over and high profile AGMs such as BT and Vodafone still to come, the EDM also calls on investors to publicly disclose how they vote, thus making them more accountable to the people whose money they manage.
Christine Berry, Policy Officer at ShareAction, said:
"MPs are absolutely right to call on investors to take a tough stance on remuneration and to publicly disclose how they vote.
"The Business Secretary indicated on Wednesday that he would consider further action if investors do not become more transparent. Institutional investors manage the pension savings of millions and should be accountable for their exercise of shareholder rights on our behalf."
With Chief executives of FTSE 100s enjoying an average pay package of £4.8m this year the EDM has caught the attention of MPs from across the political spectrum.
Martin Horwood MP, lead sponsor of the motion, said:
"This campaign couldn't be more timely. Shareholder power has been grabbing the headlines but many people don't realise that, if they have a pension or stocks-and-shares ISA, it is their money being invested in these high paying companies.
"I'm very pleased to support this initiative and would urge people to use the online action tool to make their voice heard."
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Notes to Editors:
1) Text of Early Day Motion 45 (http://www.parliament.uk/edm/2012-13/45)
That this House notes with concern the 49 per cent mean rise in the pay of FTSE 100 chief executives in 2011, compared with a 2.7 per cent rise for the average employee; further notes the trend in recent decades for executive remuneration to rise out of all proportion to company performance; believes that excessive top pay does not serve the interests of business or the economy; further notes that shareholders are coming under increasing pressure to crack down on excessive pay; further notes that, since the introduction of the advisory vote on pay, only 19 remuneration reports have been voted down by shareholders; therefore supports the ShareAction's Your Say on High Pay campaign in empowering individual savers to hold their pension funds and ISA providers to account for their exercise of voting rights on executive pay; and calls on investors to respond to the campaign by taking a robust attitude to excessive remuneration and by publicly disclosing their voting records.
2) For more information on the ‘Your Say on Pay' campaign please see www.fairpensions.org.uk/highpay