Listed companies must prepare for changes to shareholder rights

LISTED companies in the Midlands need to plan ahead for proposed changes to shareholder voting rights and regulations providing increased transparency of their executive remuneration policies, business advisor PwC has said.
 
The Government recently carried out a consultation inviting comments on its proposal that a company must obtain a 75% vote in favour of its forward-looking remuneration policy.

Other proposals include the introduction of a binding vote on all exit payments that exceed one year’s salary. The changes are expected to come into force in 2013.
 
If the proposals go ahead, which PwC said was likely, then this may encourage companies to discuss their remuneration arrangements with shareholders in advance of them seeking formal approval from shareholders.
 
Andy Hammond, partner and listed company leader at PwC in the Midlands, said: “These proposals are expected to provide shareholders with the opportunity to influence future remuneration policy, including areas such as performance-related pay, and any discretionary payments. The move to introduce greater transparency is important and will boost shareholder and public confidence.”
 
Rupert Hutton, reward specialist, added: “Public and political concern on matters of executive remuneration is driving this agenda for change and shareholders may soon be given a more active and significant role in such decision-making.  Companies need to ready themselves and start thinking now about the future.”