– The author is a Reuters Breakingviews columnist. The opinions expressed are his own –
By Peter Thal Larsen
LONDON, March 25 (Reuters Breakingviews) – The British government may have stopped short of regulating bank pay. But it is sparing no effort in encouraging others to rein in excess bonuses. Non-executive directors have already been handed a checklist for scrutinising pay. Now ministers want shareholders to make their voices heard as well.
During the boom, investors occasionally grumbled about pay for executive directors. But they almost never worried about remuneration of bankers below board level. They were free to earn as much as they could get away with.
Ministers want those pay packages to become more controversial. Draft regulations published earlier in March will force banks to disclose the number of employees earning more than half a million pounds. These “executive remuneration reports” will be submitted to shareholders for approval.
Now Paul Myners, the UK’s City minister, has suggested giving shareholders the power to vote on pay packages before they are approved. This seems sensible: it would allow investors to influence bonuses before they were awarded, rather than registering an empty protest afterwards.