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BlackRock threatens votes against excessive executive pay

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BlackRock has threatened to veto board director re-appointments at companies where top executives received disproportionate pay packets.

BlackRock told MPs on the business, energy and industrial strategy committee yesterday that it will be sending a letter to 350 UK companies expressing its concerns over increasing salaries and pension contributions and how these are benchmarked.

BlackRock’s Emea Investment Stewardship head Amra Balic told the MPs, who are conducting an inquiry over when reforms to governance such as annual shareholder votes have had an impact: “We will be voting against [remuneration] committee chairmen if we think there is a disconnect between [executive] pay and performance.”

“We will hold chairmen of remuneration committees directly accountable for what happens with pay if we feel it is not linked to performance by voting against [them],” the Financial Times quotes.

While new governance reforms were put in place four years ago, the Government last week launched a green paper proposing making shareholder votes on pay legally binding and forcing firms to publish the pay differentials between their executives and average workers.

The chairman of advertising giant WPP’s remuneration committee John Hood was also forced to justify chief executive Martin Sorrell’s £70m remuneration.

Hood said that the incentives plan for Sorrell’s pay began before reforms to the company’s remuneration structure in 2012, and that these incentives had been limited on the back of shareholder dissent.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. At last. We need more of this from other fund managers. It is long past time a stand was taken against unscrupulous and, often, undeserving people who ride roughshod over workers interests and shareholders wishes.

  2. What a bunch of hypocrites. I wonder what their big bananas get in the USA?

    Anyway as the biggest promoter of trackers, firms that are in any index that they track can just put up two fingers. Black Rock trackers and iShares have no choice but to include them.

    (Another reason why trackers are naff)

    Far more important to judge these directors by the money they make over the long term and ignore short term manipulations.

  3. oh the irony given how much the blackrock managers siphon off in “fees” to reward themselves

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