At Jupiter this time. A 31.5% vote against is a pretty big deal, though it may look a bit tame compared to last year. It's a shame it's them in a way, as Jupiter are certainly amongst the better asset managers when it comes to tackling issues at investee companies. The Grauniad makes the link to Jupiter's opposition to a bonus cap (which they don't have).
Personally I think the most significant point is that it highlights that those that police executive pay at PLCs are quite well paid themselves and sometimes have worse practices. Jupiter isn't the first asset manager to feel the heat over exec pay - it has happened to Aberdeen and, I think, F&C too.
The other point broad I would make is that asset managers generally have views that are towards the extreme end of the range of views on executive pay. They are much more willing to think that in the "war for talent" you have to pay pretty much whatever the execs want in order to secure their services.
So executive pay is set by directors, who are highly paid and, broadly, consider that current levels of executive pay are acceptable. This is then overseen by (mainly) asset managers, who are highly paid and, broadly, consider that current levels of executive pay are acceptable.
There are very few voices suggesting that pay is too high (not just insufficiently linked to performance) either in the pay-setting process at the company, or the approval process amongst institutional shareholders. It's largely an echo chamber. Highly paid people who don't really see the problem talking to each other. And as we know from Cass Sunstein, when people of like minds talk to each other they push their views further to extreme.
Is it any surprise that our current corporate governance model produces the results it does?
No comments:
Post a Comment