Shareholders fight back on boardroom pay
This week we saw shareholders from Tesco and Marks & Spencer decide to fight the "large remuneration" packages on offer to company directors. This is just the latest in a long line of friction between institutional shareholders in some of the UK's largest companies and company directors themselves. So will his friction continue into the future?
It would be wrong to suggest there has been no friction in the past between institutional shareholders and directors although historically many of these disagreements have been aired in private. However, over the last few months we have seen a number of institutional shareholders step forward with public criticism of remuneration packages and bonuses which has led to an increase in friction. Many believe we are now entering a new stage of shareholder power and the shareholder movement is now growing in stature. Gone are the days when shareholders would rather come to an agreement behind the scenes and when you see the likes of Tesco and Marks & Spencer suffering in public then we can readily expect this new movement to grow in strength in the months and years ahead.
Directors will now be forced to justify payments which would historically have been waved through with no issues, especially in these very difficult economic times.
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