There's an interesting piece on Financial News here about shareholder voting intentions on pay at Barclays and other banks. The short version is that asset managers are going to vote in favour of bankers being able to receive bonuses of up to 200% of salary, essentially raising the bonus cap of 100% of salary.
There's not much surprising about this, or the arguments that are used to justify it (war for talent, cost flexibility). But it does illuminate a very important point that left-of-centre types interested in corporate governance should be aware of - shareholder oversight of pay is a very limited tool.
It's a huge mistake to assume that tooling up shareholders, or providing them with more information, will by itself make any real difference. All this can really do is to make pay more like what shareholders think it should be like. And, given that most asset owners delegate responsibility for this stuff along with investment management, in practice it means that whatever influence such reforms have will be in the direction of making pay more like what asset managers think pay should be like. Woo and indeed hoo.
In terms of the bonus cap, asset managers are essentially being asked whether they think banks should be allowed to pay bankers a lot of money, with a large variable element. It seems the answer they are going to give is Yes. There's this year's shareholder spring then - voting to liberate the bankers from the tyranny of the bonus cap.
Whilst asset managers control the votes we're not going to get much of a bang out of binding votes and similar reforms. Other approaches are needed.