Europe: McCreevy calls on Member States to provide shareholders with 'say on pay'

At yesterday's Transatlantic Corporate Governance Dialogue conference, the theme of which was "Corporate Governance Standards and Financial Stability", Internal Market Commissioner McCreevy delivered a keynote speech in which he spoke about risk management, market transparency and remuneration. With regard to remuneration, Commissioner McCreevy observed:

I think that in the light of recent events, Member States that have not yet done so, should reconsider their policy and ensure that shareholders can vote on the remuneration criteria of board members. A say on this issue would go a long way towards increasing or restoring shareholder confidence. It would force boards to do a whole lot more explaining than is done at present. In particular, shareholders will then be able to understand whether executive pay is linked to performance, whether it should be linked to performance or indeed, express their disapproval at a compensation package.

What we currently have is a situation where shareholders behave too much like shrinking violets - unwilling, unable but most of all unequipped - to curb corporate excesses. Shareholders should push their Member States to have a vote on this issue as laid down in the Commission Recommendation".