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Tuesday, 22 January, 2002, 00:01 GMT
Directors' pay under shareholder scrutiny
protest against high executive pay
Shareholders don't always approve of high boardroom salaries
A record number of UK shareholders will be given the chance to vote on the pay of their firm's top executives this year.

Nearly 40% of the top 100 firms listed on the London Stock Exchange say they will put directors' pay to the vote at annual general meetings, up from only 13% in 2001.

The survey, compiled by consultancy Edis-Bates Associates, suggests that firms are also becoming more open about the performance criteria of their management teams. Just over 90% plan to publish them in their annual reports.

However, only 11% of firms in the FTSE 100 index are actually prepared to provide graphs showing the quality of executive performance.

Shareholders of Midlands Bank protesting at the AGM
Annual General Meetings sometimes take on a combative air
From 2003, new government regulations will require all companies to include such graphic evidence of management performance.

Listed companies will also be forced to put an advisory resolution on executive pay to their share holders.

The Trades Union Congress believes the survey shows firms are gearing up for the change.

TUC general secretary John Monks said: "This is to be welcomed, but the new system will only bite if shareholders and fund managers take an active role by casting their votes".

"A key test they should apply is whether company staff are represented on the remuneration committee", he added.

See also:

31 Oct 01 | Business
Boom time for bosses
19 Oct 01 | Business
New rules on 'fat cat' pay
29 Aug 01 | Business
Executive pay rises 28%
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