A couple of weeks ago, I mentioned that it was my view that the various pensions funds, such as Calpers, as major shareholders in many large businesses would soon start to act against the outrageous salaries presently being paid to CEOs as a result of the dotcom telecom mania of the last few years.
The headline story in today's FT is interesting in this respect. Here's a condensation: <<<< ARGUMENT FOR TOP PAY IS 'HOOEY' Simon Targett and Tony Tasell Leading institutional investors have concouded that there is no real internaitonal market for top business executives, throwing doubt on one of the main arguments used by companies to justify huge boardroom pay packets. The International Corporate Governance network, whose members control US$10,000 billion of assets, is set to publish a new report questioning why executives' salary, bonus and share options packages are being stuctured rto stop them being poached by overseas competitors. "That is so much hooey," said Alastair Ross Goobey, chairman of an ICGN committee that has drawn up new corporate governance standards, and a former chief exeuctive of fund manager Hermes. Many companies rely on international cop[arisons when setting bosses' pay -- last week telecomms groups Vodaphone cited the need to "retain and motivate" executives when giving out details of a multi-million pound package for its chief executive, Sir Christopher Gent. "We cannot ignore the societal impact of what seems to be unfair or disproportionate regards being received," the ICGN report says. It also says that transactional bonuses are no longer acceptable. They offer "perverse incentives" to executives. The IGCN, which is expected to approve the report at its annual summit in Milan next month, was formed in 1995 and is backed by some of the world's most influential and activist investors. These include institutional investors such as Calpers, Capital Group, Fidelity. Hermes Pensions Management, TIAA-CREF, and Barclays Global Investors. It also includes representative bodies such as the Association of British Insurers and the Council of Institutional Investors in the US. >>>> ---------------------------------------------------------------------------- ------------ Keith Hudson, General Editor, Handlo Music, http://www.handlo.com 6 Upper Camden Place, Bath BA1 5HX, England Tel: +44 1225 312622; Fax: +44 1225 447727; mailto:[EMAIL PROTECTED] ________________________________________________________________________
