Shareholder rebellion over pay having an effect

A survey published yesterday indicates that growing numbers of executives are willing to listen to shareholders.

However, the precise manner in which shareholders could flex their muscles remains uncert- ain.

Two-thirds (67 per cent) of business leaders around the world believe that shareholders should have greater involvement in establishing pay policy for bosses at large public companies, according to the study by professional services firm Grant Thornton.

The study of 2,800 businesses in 40 countries found that 66 per cent of respondents believed that senior executives are paid too much.

The research was conducted as part of the quarterly Grant Thornton International Business Report.

More than three-quarters (77 per cent) of respondents said that public companies should disclose the remuneration policy and individual remuneration of executive and non-executive directors.

Eighty per cent of those quizzed believe that the roles of chief executive and chairman of the board should be held by different people “to ensure greater oversight”.

Ninety per cent felt that executive remuneration at public companies should be closely linked to performance targets.

Leeds-based Peter Gomersall, of Grant Thornton, said yesterday: “These are turbulent times for senior executives within both public and private businesses.

“The call for more transparency about the amount and, possibly more importantly, who decides the remuneration of senior executives, is continuing to gain momentum.

“These results clearly shows that there is an increased appetite for shareholders to be involved in the determination of executive remuneration and reward, although it is very difficult to predict how this will evolve in practice.”