Shareholders get rights to define directors pay
17 March, 2017
The Parliament gave last Tuesday its approval to a revised EU shareholders' rights directive, giving shareholders a say on directors' pay and making it easier for firms to identify their shareholders, the EP press service reported. The new tools are intended to sharpen the big EU firms focus on their long-term performance, by fostering their shareholders' commitment. “The measures agreed upon will help to steer investments towards a more long-term oriented approach and will ensure more transparency for listed companies and investors,” rapporteur Sergio Gaetano Cofferati (S&D, IT) said.
The agreement will empower shareholders to vote on remuneration policy for company directors, thus enabling them to tie it more closely to the company's performance and long-term interests. They will also enable companies to identify their shareholders more easily and thus facilitate dialogue with them, as well as making it easier for shareholders to exercise their rights, including the right to participate and vote in general meetings.
In addition, certain potentially prejudicial transactions will have to be publicly disclosed and approved through procedures guaranteeing the protection of the interests of companies and their shareholders. The rules also introduce new transparency requirements for institutional investors, who are often important shareholders of listed companies in the EU.