LONDON Feb 27 One of Britain's most influential
fund managers Standard Life Investments has come out in support
of controversial plans to give shareholders greater powers to
block executive pay at UK companies.
Edinburgh-based SLI said on Wednesday it is supporting a
package of reforms first proposed in June that included making
shareholder votes on director pay binding after the government
persuaded it the plans would be flexible and workable.
"BIS (The Department for Business Innovation and Skills)...
developed proposals that are capable of practical implementation
and provide an appropriate blend of flexibility with
accountability," Guy Jubb, Standard Life's Global Head of
Governance and Stewardship said in an emailed response to
The investment manager had initially opposed the plan for
binding votes on remuneration, arguing they would be
The support of Standard Life is significant because with 163
billion pounds ($247 billion) under management it is one of the
UK's largest investors and holds significant stakes in many
European and British blue chip companies.
Its stance may also help convince other fund firms and
industry experts who fear the new rules risk excessive meddling
in management of companies by shareholders who may not have the
resources to fully understand each firm they invest in.
"We have been persuaded that, taken as a whole, the proposed
measures will serve to strengthen shareholders' ability to hold
boards to account," Standard Life said in a report on governance
released on Wednesday.
Shareholders currently only have an advisory, non-binding
vote on director pay. Government proposals to change this were
conceived in the midst of an investor backlash against board
room pay which had multiplied over a decade in which share
Last year saw a number of shareholders vote against pay
packages in what became known as Britain's "shareholder Spring".
In May, British insurer Aviva's chief executive
Andrew Moss and Sly Bailey, head of British newspaper group
Trinity Mirror, became high-profile casualties after
shareholders took issue with rebelled against large pay
packages, falling profits and poor share performances.
Investors also blocked in June a 6.8 million pounds pay
award for Martin Sorrell, head of the world's biggest
advertising agency WPP.
Among the examples highlighted by Standard Life of its
wrangles with companies over executive pay last year was its
opposition to bonuses paid to former Barclays CEO Bob
Diamond and Finance Director Chris Lucas.