FIVE LARGE companies listed on the Irish Stock Exchange (ISE) are coming under pressure to justify to shareholders the salaries paid to top management, by giving shareholders an opportunity to vote on executive remuneration.
A leading international adviser to big institutional shareholders is seeking to table “say-on-pay” resolutions at the annual general meeting of five Irish companies which will be held in the coming weeks. The move comes against the backdrop of catastrophic losses incurred by investors.
The organisations cited by Manifest, which casts proxy votes for institutional clients, include the Bank of Ireland, beneficiary of a €3.5 billion recapitalisation by the State after a drop of more than 90 per cent in its share price.
The others are: drink business CC, whose shares are down 56 per cent in 12 months; and newspaper publisher Independent News Media (INM), whose shares are down 86 per cent in a year; drug company Elan, whose shares are down 71 per cent; and holding company DCC, whose shares are largely unchanged in a year.
Manifest said it was particularly important for the democratic process to do all it can to protect shareholder interests “in light of the considerable sums of Irish Government money being used to support Bank of Ireland”.
However, the agency’s research manager, Alan Brett, said the company’s decision to requisition the resolutions was not a matter of picking on any individual director or company or undertaking a name-and-shame exercise to say Irish executive pay was excessive.
“These were the next five agms on the calendar where we were in time to file resolutions and where we owned shares,” he said.
Although resolutions on executive pay are routine in Britain and Australia and common elsewhere, there is no obligation under Irish law or ISE rules on Irish-registered companies to seek shareholder approval for their top-level remuneration.
Bank of Ireland’s spokesman said the bank did not propose to have a separate vote on the remuneration report, published as part of its annual report, as there was no legal or regulatory obligation on it to do so. He also pointed out that the annual report and accounts were the subject of a shareholder vote.
“However, we do note the EU recommendation in this regard and we will be keeping developments under review.”
It is understood that DCC has written to Manifest to say that a resolution will be put to its shareholders at its agm this summer.
With preparations already in train for INM’s agm, it is believed that Manifest’s requisition to that company may not have been made in time for correspondence to shareholders. “It would be kept under review ahead of next year’s agm,” INM’s spokesman said.
Although CC declined to comment, shareholders approved the pay package for its management at an extraordinary general meeting last December. Elan’s London-based spokesman was not available for comment last night.
