Almost one in five of the UK’s biggest companies have been “named and shamed” by being placed on a list of firms that pay their bosses excessive amounts.
The Investment Association, who compiled the list, said that the number of FTSE-100 companies on the list rose from nine in 2017 to 18 in 2018.
Chris Cummings, chief executive of the Investment Association said that the new figures were “deeply disappointing”.
Shareholder rebellions
Businesses are placed on the list if more than 20% of shareholders voice their disapproval at pay rates.
Chris Cummings said on shareholder rebellions: “Shareholders clearly remain unimpressed with the approach to pay last year, and are frustrated the message is not getting through to some boardrooms.
FTSE 100 companies must do more to ensure the pay packets of their top team align with company performance and remain at levels that shareholders find acceptable.”
Some of the biggest shareholder rebellions over pay include the Royal Mail, Russian gold mining company Petropavlovsk and housebuilding company Persimmon.
Jeff Fairburn, head of Persimmon was paid a total of £75m despite 48.5% of shareholders voting against this decision. They described it as “grossly excessive” and “totally and utterly unjustifiable”. Fairburn ended up giving up some of his bonus but was still the highest paid FTSE 100 executive on the list.
Government-backed register
Last year, Theresa May ordered the world’s first public register for companies who disregard shareholder complaints and awarded “pay rises to bosses that far outstrip the company’s performance”.
Kelly Tolhurst, business minister said, “shareholder revolts on pay fell this year but it is right that shareholders are able to send a strong signal when they aren’t satisfied that executive pay is in line with performance.
“This register is one of a package of reforms by the government to upgrade our corporate governance, including board diversity and CEO pay ratio reporting, to make our largest companies more transparent and accountable to their staff and shareholders.”
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